ABLE Act Facts

Posted by Reeve Staff in Daily Dose on July 03, 2015 # Advocacy and Policy

We have received many questions at the Paralysis Resource Center about the ABLE Act and what it means for people with paralysis today.

Here are the facts:

The President signed the ABLE Act into law in December of 2014. The law allows people with disabilities to establish tax-preferred savings accounts to save for qualified disability-related expenses, much like Section 529 college savings accounts.

To qualify for accounts, individuals must have a significant disability acquired before the age of 26. Eligible expenses include disability-related costs for health care, education, transportation, employment and training, and personal assistant services. In addition to being untaxed, funds in the account will not count toward personal income or asset limits in determining eligibility for Supplemental Security Income or Medicaid.

Now that the ABLE Act is law, each state must establish ABLE accounts as part of their state-regulated 529 plans. For a list of pending and passed state legislation, see this page from the National Down Syndrome Society. The US Treasury Department is also issuing guidance and regulations to states about how ABLE accounts should function.

Until the Treasury Department and states issue their final rules, you may not be able to set up an account. To learn more about setting up an account in your state, visit your state’s 529 plan agency.

For more information on the ABLE Act and other policies affecting financial security for people with disabilities, visit the National Disability Institute.