When it comes to handling finances, we see many families that want to organize their funds in the most beneficial way possible, especially those planning for disability expenses.
In December, 2014, the Achieving a Better Life Experience Act, or ABLE Act, became a federal law in order to improve the lives of people with disabilities.
The program is designed to assist those disabled before age 26 with financial difficulties by meeting their particular needs.
The beneficiary, or anyone else who wishes to contribute, can add up to $14,000 per year to their ABLE savings account. These funds remain tax-free as long as they are being used for qualified disability expenses, which we believe is crucial for smarter saving and spending.
Since the bill became a law last year, many states have begun enacting their own versions of the program. In April of this year, Ohio joined preceding states by introducing the Disability Expense Savings Account bill, or the Ohio ABLE Act. This was a great achievement for our community, helping us to assist those in need with better financial spending.
What advantages does the program offer?
- Significant help with qualified expenses such as housing, education, and transportation by creating tax-free savings accounts for earned income
- Orientation and assessment for educational needs in local classes at flexible locations, dates, and times
- Free assistance with skills to succeed in post-secondary education, training, and employment
What if I already receive benefits elsewhere?
- If you are already receiving Supplemental Security Income, or SSI, you can continue to take advantage of both programs until your ABLE account balance surpasses $100,000, suspending SSI funds until the balance is again within eligible parameters.
- If you are also receiving Medicaid in addition to ABLE benefits, you will continue to be eligible for Medicaid until your account balance goes beyond the Ohio ABLE Act’s limit. This cap is based on Ohio’s set restrictions for certain higher education savings accounts, which in 2015 was a significant $414,000.
At H&J CPAs, we know how important it is to set up your finances in a way that best fits your particular lifestyle. We have a passion for helping our neighbors achieve the best benefits that can be offered, and we are proud to assist your family.