Tax-Free Savings Accounts for People With Disabilities Launching This Summer
Several states will begin offering tax-free savings accounts for people with disabilities as early as this summer.
The new accounts, modeled after 529 college plans, will allow people with disabilities to save up to $100,000 without endangering their eligibility for Social Security and other government-provided benefits — and keep their Medicaid, to boot.
The result of the Achieving a Better Life Experience (ABLE) Act, which President Obama signed in December 2014, the accounts will feature tax-free interest. People who incurred their medical condition before the age of 26 will be able to use ABLE funds toward expenses such as education, healthcare, transportation and housing.
The first state to announce a launch date for its ABLE program is Nebraska — which will begin offering accounts June 30 — but some say Ohio could open its accounts prior to that. Both Ohio and Nebraska’s programs will be available to people with disabilities nationwide.
“It’s exciting that after working on this legislation for 10 years that individuals with Down syndrome and other disabilities will be able to open accounts as soon as next month,” Sara Hart Weir, president of the National Down Syndrome Society, told DisabilityScoop.