Annual Contribution Increases for ABLE Accounts Coming in 2018
The amount that can be deposited in an ABLE account each year without jeopardizing public benefits will rise from the current $14,000 to $15,000 starting in 2018. This increase is tied to the federal gift tax exclusion which is also rising from $14,000 to $15,000 due to inflation.
This increase makes ABLE accounts that much more attractive as a way for people with disabilities to shield gifts and income, or even use as an alternative to a special needs trust, but only in the right circumstances. You will need to check with your attorney to assess your specific situation.
Background on ABLE Accounts
The ABLE account option was modeled after popular 529 college savings accounts and was created by Congress via the passage of the Achieving a Better Life Experience (ABLE) Act in 2014
ABLE accounts allow people with disabilities and their families to save up to $100,000 in accounts for disability-related expenses without jeopardizing their eligibility for Medicaid, Supplemental Security Income (SSI), and other government benefits. Funds in the tax-free savings accounts can be used to pay for qualifying expenses such as the costs of disability treatments education, housing and health care, among other things. A key restriction to using an ABLE account is that the disability must have occurred before the person turns 26.
ABLE Program in Alabama
Similar to 529 savings plans, individual states set up their own ABLE programs, but so far, most state plans are welcome participants who are residents of any state.
For more information about Alabama’s ABLE program, visit: