July 5, 2018
The following article,
from the office of Texas Comptroller of Public Accounts, describes a savings
plan for Texans with disabilities. The goal: to help them plan for
disability-related expenses.
Effective May 1, 2018,
Texans with disabilities have a new option to save and plan for their financial
futures. It’s called the Texas Achieving a Better Life Experience (Texas
ABLE®) Program. Texas ABLE, based on federal and state legislation, provides
Texans with disabilities and their families the opportunity to save money for
disability-related expenses in a tax-advantaged account without losing their
eligibility for certain means-tested federal programs including Supplemental
Security Income (SSI), Social Security Disability Insurance (SSDI) and
Medicaid.
Eligible Texas residents who experience the onset of a disability before the age of 26 and meet program eligibility requirements, or their parent, legal guardian or other fiduciary (such as an agent acting under a power of attorney), can establish a Texas ABLE account and save up to $15,000 per year (or even more if exceptions in the Tax Cuts and Jobs Act of 2017 apply). Under current federal law, individuals with disabilities cannot have more than $2,000 in countable resources without losing eligibility for important federal benefits. ABLE provides an exception to this requirement by generally disregarding ABLE account funds up to $100,000 for purposes of determining eligibility to receive government assistance or benefits.
Withdrawals from an ABLE account, including any earnings, are not subject to federal income tax if used for qualified disability expenses related to maintaining or improving the health, independence or quality of life of the eligible individual. Qualified disability expenses include: education, housing1, transportation, employment training and support, assistive technology and personal support services, health, prevention and wellness, financial management and administrative services, legal fees, oversight and monitoring, funeral and burial and other expenses that may be identified from time to time by the IRS.
The minimum initial contribution to open a Texas ABLE account is $50, and there is a minimum of $25 for subsequent contributions. There is no enrollment fee. Anyone can contribute to an account, including the eligible individual, family, friends, businesses and trusts. An online gifting tool makes it easy for others to contribute to an eligible individual’s account.
The Texas ABLE Program is established and maintained by the Texas Prepaid Higher Education Tuition Board with assistance from the Texas Comptroller’s office. For more information on the program, visit TexasABLE.org, email us at customerservice@TexasABLE.org or call us (844) 489-2253.
Other than FDIC insurance for the Bank Savings Account Option, accounts are not insured or guaranteed and could lose money (including the principal invested). Before investing in the Program, investors should carefully consider the federal and state tax consequences, possible negative effects on eligibility for federal or state benefits, and possible Medicaid recapture, investment objectives, risks, administrative fees, service and other charges and expenses associated with the Program. The Program Disclosure Statement and Participation Agreement contains this and other information about the Program, and is available at www.TexasABLE.org or by calling 844-4TX-ABLE (844-489-2253). Investors should read the Program Disclosure Statement and Participation Agreement carefully before investing.
Comments or complaints may be forwarded to the Prepaid Higher Education Tuition Program, Office of the Comptroller of Public Accounts, P.O. Box 13407, Austin, Texas 78711-3407. (512) 936-2064.
1. The withdrawal for housing expense is disregarded for means-tested benefits only if the withdrawal from the ABLE account and payment occur in the same month.
Eligible Texas residents who experience the onset of a disability before the age of 26 and meet program eligibility requirements, or their parent, legal guardian or other fiduciary (such as an agent acting under a power of attorney), can establish a Texas ABLE account and save up to $15,000 per year (or even more if exceptions in the Tax Cuts and Jobs Act of 2017 apply). Under current federal law, individuals with disabilities cannot have more than $2,000 in countable resources without losing eligibility for important federal benefits. ABLE provides an exception to this requirement by generally disregarding ABLE account funds up to $100,000 for purposes of determining eligibility to receive government assistance or benefits.
Withdrawals from an ABLE account, including any earnings, are not subject to federal income tax if used for qualified disability expenses related to maintaining or improving the health, independence or quality of life of the eligible individual. Qualified disability expenses include: education, housing1, transportation, employment training and support, assistive technology and personal support services, health, prevention and wellness, financial management and administrative services, legal fees, oversight and monitoring, funeral and burial and other expenses that may be identified from time to time by the IRS.
The minimum initial contribution to open a Texas ABLE account is $50, and there is a minimum of $25 for subsequent contributions. There is no enrollment fee. Anyone can contribute to an account, including the eligible individual, family, friends, businesses and trusts. An online gifting tool makes it easy for others to contribute to an eligible individual’s account.
The Texas ABLE Program is established and maintained by the Texas Prepaid Higher Education Tuition Board with assistance from the Texas Comptroller’s office. For more information on the program, visit TexasABLE.org, email us at customerservice@TexasABLE.org or call us (844) 489-2253.
Other than FDIC insurance for the Bank Savings Account Option, accounts are not insured or guaranteed and could lose money (including the principal invested). Before investing in the Program, investors should carefully consider the federal and state tax consequences, possible negative effects on eligibility for federal or state benefits, and possible Medicaid recapture, investment objectives, risks, administrative fees, service and other charges and expenses associated with the Program. The Program Disclosure Statement and Participation Agreement contains this and other information about the Program, and is available at www.TexasABLE.org or by calling 844-4TX-ABLE (844-489-2253). Investors should read the Program Disclosure Statement and Participation Agreement carefully before investing.
Comments or complaints may be forwarded to the Prepaid Higher Education Tuition Program, Office of the Comptroller of Public Accounts, P.O. Box 13407, Austin, Texas 78711-3407. (512) 936-2064.
1. The withdrawal for housing expense is disregarded for means-tested benefits only if the withdrawal from the ABLE account and payment occur in the same month.
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