Tuesday, January 13, 2015

ABLE Act is Now Law

On Friday, December 19, 2014, President Obama signed the ABLE Act into law. It was part of a larger bill of end of year tax provisions approved by Congress.

The Arc, the nation’s largest organization for people with intellectual and developmental disabilities (I/DD), released the following statement after the Achieving a Better Life Act (ABLE Act) was approved.

“While the legislation was narrowed due to the constraints from the cost analysis, the approved bill will provide a vehicle for some families and people with intellectual and developmental disabilities to save for the future, depending on their own circumstances.  The Arc will continue to work with the leadership and chief sponsors in Congress to expand this program in the future to ensure that everyone in need can get the maximum benefit from this legislation. We remain disappointed that certain pay-fors remain in the bill,” said Peter V. Berns, CEO of The Arc.

The ABLE Act changes the tax code to allow for tax advantaged savings accounts for individuals with disabilities for certain expenses, like education, housing, and transportation.  Similar to existing “Section 529” education savings accounts, ABLE accounts let families save for disability-related expenses on behalf of qualified beneficiaries with disabilities that will supplement, but not replace, benefits provided through the Medicaid program, the Supplemental Security Income program, the beneficiary’s employment, and other sources. 

If properly managed, funds in the ABLE accounts will not jeopardize eligibility for critical federal benefits. With full understanding of its features, individuals and families could use the ABLE accounts as another tool in planning for the lifetime needs of an individual with long term disabilities. The version of the bill that was signed into law includes age limitations and a cap on contributions, added in July by the Committee on Ways and Means to reduce the costs of the bill. 

10 Things You Need to Know About the ABLE Act

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