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Program will offer tax-free savings accounts for people with disabilities

People with disabilities will be able to open new, tax-free savings accounts under at least one program offered nationally this summer.

The state-sponsored accounts are known as 529 ABLE, or 529A, accounts. Authorized in 2014 by the Achieving a Better Life Experience Act, or ABLE Act, the accounts are modeled loosely on 529 college savings accounts.

The main benefit of the new accounts is that they allow disabled people to accumulate significant savings without jeopardizing their eligibility for need-based government help such as Supplemental Security Income or Medicaid. Disabled people, their families and friends can contribute as much as $14,000 a year without putting federal benefits at risk.

Florida expects to start an ABLE program by July 1, but will restrict enrollment to state residents, according to the program's website.

Families should consider any fees associated with the accounts when making a choice. The website for Ohio's program, called Stable, for instance, says state residents will pay $2.50 a month to maintain an account, plus fees based on a percentage of their assets, depending on which type of investment they choose. Residents of other states may pay more.

Advocates continue to work to enhance the accounts. Currently, for instance, ABLE accounts are available to those who became disabled before age 26. But In March, the sponsors of the original law proposed legislation to expand eligibility to those disabled before age 46.

The ABLE Age Adjustment Act is pending in committee, according to


Where can I learn more about 529 ABLE accounts? The Able National Resource Center has a website,, with information about the accounts.

How does a 529 ABLE account differ from a special needs trust? A special needs trust can be used to shelter a disabled person's assets, but can be expensive to establish and maintain. ABLE accounts are intended to offer a simpler, less costly option, advocates for the disabled said. But they have this drawback: Unlike funds in properly structured trust, funds in an ABLE account may be tapped to help repay state Medicaid costs after a beneficiary's death.

May I have more than one ABLE account? No. Unlike 529 college savings accounts, you may have just one ABLE account.

Can Florida residents get one of these accounts? Florida expects to start an ABLE program by July 1, but will restrict enrollment to state residents, according to the program's website.

Program will offer tax-free savings accounts for people with disabilities 05/29/16 [Last modified: Sunday, May 29, 2016 6:43pm]
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