An ABLE account is a state-run savings program for qualified people with disabilities. The ABLE program was a result of the federal Achieving a Better Life Experience Act passed in 2014. ABLE accounts are similar to College 529 savings accounts. Funds put into an ABLE account are exempt from the SSI and Medicaid asset limits. So, people with disabilities can have more than $2,000 in their ABLE account and not worry about losing benefits. The idea is to build more financial independence while keeping important financial supports. Earnings on the account are not federally taxed. Funds in an ABLE account have to be used for qualified disability expenses; however, these are very broad. Although reporting is not required, it is always a good idea to keep good financial records. If you are a fiscal conservator, it is a requirement.
At this time, to open an ABLE account, the individual’s disability had to develop before age 26. You can open an ABLE account in any state that has a program, regardless of where the person lives but there can be only one account per beneficiary. Virginia has one of the largest programs in the country called ABLE-now. Click here to get more information on Virginia’s program and how it operates.