What is the ABLE Act?

The ABLE Act amends Section 529 of the Internal Revenue Service Code of 1986 to create tax-free savings accounts for individuals with disabilities. By making tax-free savings accounts available to cover qualified disability-related expenses (including education, housing & transportation), this law aims to ease the financial strains faced by individuals with disabilities. Additionally, the funds contributed into these accounts will not negatively impact the person's eligibility for public benefits, such as Medicaid.

Source: ABLE National Resource Center

Why should I consider an ABLE account for my loved one?

The costs associated with living with a disability, or caring for a family member with one, can be incredibly costly. In addition, most individuals will require ongoing supports throughout his or her life that are funded through Medicaid. Current low does not allow for an individual to receive Medicaid benefits who have assets in excess of $2000. ABLE accounts are tax-advantaged savings accounts that in most cases will not impact an individual's Medicaid and Social Security benefits. 

Why should I consider an ABLE account for my loved one?

ABLE accounts can be used for "Qualified Disability Expenses", or QDE. A QDE is an expense related to a person's disability that will assist him or her at increasing their independence, health and quality of life. Some examples include: 

  • Education; 

  • Housing; 

  • Transportation; 

  • Health care expenses; 

  • Personal assistance; 

  • Assistive technology; 

  • Training; and

  • More

Who is eligible for an ABLE account?

The ABLE Act limits eligibility to individuals with significant disabilities with an age of onset of disability before turning 26 years of age.

If your loved one meets this age criterion and are also already receiving benefits under SSI and/or SSDI, he or she is automatically eligible to establish an ABLE account. If your loved one is not a recipient of SSI and/or SSDI, but still meet the age of onset disability requirement, he or she could still be eligible to open an ABLE account if he or she meets Social Security's definition and criteria regarding significant functional limitations and receive a letter of certification from a licensed physician. Your loved one does not have to be under the age of 26 to be eligible for an ABLE account. You can be over the age of 26, but the disabling condition must have occurred before your 26th birthday.

Source: ABLE Now National Resource Center

Is there a limit to how much I can place in an ABLE account? Is there a maximum amount allowed by law?

The total annual contributions by all participating individuals, including family and friends, for a single tax year is $15,000. The amount may be adjusted periodically to account for inflation. Under current tax law, $15,000 is the maximum amount that individuals can make as a gift to someone else and not report the gift to the IRS (gift tax exclusion).

Source: ABLE Now National Resource Center

Do you need to use your home state's ABLE program?

No. You may use any state's ABLE program as long as it accepts out of state residents.

Source: ABLE Now National Resource Center

Tell me more about Virginia's ABLE program!

ABLEnow is a national ABLE savings program offered by the Commonwealth of Virginia. The program

Source: ABLE Now National Resource Center

Where can I get national resources?

Additional resources

The Arc of Northern Shenandoah Valley

PO Box 124

Middletown, VA 22645

P: 540.692.9650

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