ABLE ACCOUNTS

ABLE account

If you or a loved one have special needs, an ABLE account offers a great way to save for future disability-related expenses.  In Alabama, an ABLE account is also known as EnAble Savings Plans.  ABLE stands for Achieving a Better Life Experience.

The ABLE account offers certain disabled individuals a savings account with earnings that are tax-exempt.  Money in the account can be used for disability-related expenses, without affecting your eligibility for means tested government benefits such as SSDI.  Typically, to be eligible for means tested benefits, a person can have no more than $2,000 in assets.  However, the ABLE account allows you to accumulate up to $100,000 in the account to enhance your quality of life.

Qualified Disability Expenses:

Withdrawals from the account are also tax free if used to pay for qualified disability expenses.  Those expenses include:

• Education (including tuition for preschool through post-secondary schools);
• Housing;
• Transportation;
• Employment training and support;
• Assistive technology and related services;
• Personal support services;
• Health, prevention and wellness;
• Financial management and administrative services;
• Legal fees;
• Expenses for oversight and monitoring;
• Funeral and burial expenses, and
• Other expenses to enhance the account owner’s quality of life.

How an Able Account Works:

An eligible person or their legal representative opens an ABLE  account by completing a form online or mailing a paper enrollment form to the address noted on the form. The initial deposit is $50 unless the owner chooses to use Automated Investment Plan or payroll deduction.
Contributions can be made by:

• Any person or entity may contribute to the account.  Additionally, others can contribute up to gift tax exclusion limit ($15,000) “per calendar year per account owner.”
• Payroll deductions
• Automated Investment Plan (“AIP”)
• Note that subsequent contributions must be at least $25 unless AIP or payroll deduction. Also, annual maximum contribution is $15,000.

The disabled person or their legal representative is the owner of the ABLE account. As mentioned, money deposited to the account is tax-exempt, as well as the money withdrawn for eligible expenses. Even the interest earned on the account is tax exempt.

ABLE account owners must be:

• A child, transition-aged youth, or adult with an eligible disability.
• Disabled at the time the account is opened.
• Disabled prior to individual’s 26th birthday.
• Diagnosed with other qualifying conditions as listed at Social Security Administration
• Compassionate Allowances Conditions.

Find Out More About ABLE Accounts.

As with any program, restrictions and limitations apply. If you are interested in setting up an ABLE account for yourself or a loved one, please call us at 256-472-1900 or use our Contact Form to let us know you’re ready to talk.