As many of you know, the ABLE Act has been a hot topic across not only our state but the nation. People are desperately seeking answers to questions that still remain open-ended. Although Congress and the Iowa legislature have passed the ABLE Act, the Iowa State Treasurer is currently working on how this act will be implemented in Iowa. Therefore, no Iowan with a disability can establish an ABLE account yet. Iowa WIPA has spoken with the Treasurer’s Office and is staying up to date on the implementation process.
As rules and regulations are hammered out, we will be sharing with you accordingly. In the meantime, check out some ABLE account basics:
How Does an ABLE account impact benefits?
The President signed the ABLE Act into law in December 2014, in order to allow “qualified individuals with disabilities” the opportunity to establish a tax-free, savings account to pay for disability-related expenses.
A “qualified individual with a disability” is a person whose onset of disability occurred before the age of 26. The individual need not receive benefits based on disability but must establish that the disability began before age 26. The individual with a disability or someone else, such as a family member, can establish an account. If someone other than the beneficiary contributes to the account, the tax-free contribution is limited to $14,000 annually. The beneficiary can also contribute to their own account.
As the creation of the ABLE account was to offset some disability-related costs of living, the ABLE account can be used for a broad variety of reasons related to disability: transportation, home modification, education, medical & dental care, wellness, respite care, personal assistance and financial management services.
The ABLE account will NOT impact eligibility for means-tested, federally-funded benefits such as Medicaid and SNAP, but there are two exceptions for SSI:
- The balance in the account above $100,000 is a countable resource.
- The amount withdrawn from the ABLE account for a housing-related expense that is retained into the following month will become a countable resource.
SI 01130.740 Achieving a Better Life Experience (ABLE) Accounts