Achieving long-term financial security can be much more difficult for a person with a disability. This is perpetuated by the barriers that people with disabilities face when trying to secure employment or if disabilities are severe enough to make working not an option.
If you have intellectual, developmental or physical disabilities, or you’re the parent or guardian of a child with intellectual, developmental or physical disabilities, you may be able to save for the future with a tax-advantaged savings program known as ABLE.
What is ABLE?
Known as ABLE, the Achieving a Better Life Experience Act, was put in place to try to reduce issues with procuring long term financial security for people with disabilities. Under the ABLE Act, bank accounts known as ABLE accounts were set up to provide a tax-free means of saving up for individuals with disabilities and their family members.
Before ABLE, there were only general federal and state financial aid programs such as Supplemental Nutrition Assistance Program (SNAP), Supplemental Security Income (SSI), and Medicaid available. The problem with these is that they were designed as catchall programs with distinct rules, so there is no room for gray areas. If for some reason you have different circumstances to those set out in the original requirements for these programs, you will need to jump through extra hoops just to get qualified in the first place.
Also, one glitch in the system can easily put your benefits on hold for a long time while waiting for your case to be reviewed. One of the major restrictions of these benefits is that they only allow the beneficiary to hold a maximum of $2,000 if unmarried or less than $3,000 if married in assets at any given time. This means that an individual on any of these programs would be unable to accumulate more than $2,000 in savings–which poses many risks for the future of that individual.
Tax-Advantaged Savings
With the ABLE Act, the fear of not meeting the eligibility criteria for SSI benefits has been diminished. In 2014, the ABLE Act changed parts of the federal tax code, allowing states to establish tax-advantaged savings programs for individuals with disabilities and their families. Savings in an ABLE account can be used toward housing, education, transportation, employment training and support, assistive technology and personal support services, health, prevention and wellness, financial management and administrative services, legal fees, expenses for oversight and monitoring, funeral and burial expenses, and some other expenses related to care for the beneficiary.
Assets in an ABLE savings account do not count against the $2,000 resource limit for SSI until they’re over $100,000. This means that any income earned through an ABLE account, or any contribution made to an ABLE account (whether by a family member or beneficiary) will not be subject to federal taxes up to the yearly deposit limit of $15,000.
Who is Eligible for an ABLE Account?
In order to open an ABLE account, the beneficiary must meet certain eligibility criteria:
- Their disability must have been diagnosed before the age of 26
- Their disability is expected to last a minimum of 12 consecutive months
- They must be a U.S. citizen and confirm one of the following:
- They are eligible for SSI or SSDI because of a disability;
- Experience blindness as determined by the Social Security Act; or
- Can produce a signed diagnosis form by a licensed physician if requested.
What Changes Have Been Made to ABLE Accounts Recently?
In 2019, certain amendments were passed regarding ABLE accounts. These changes are as follows:
- Contributions to the ABLE account can include any from a section 529 program and be should be under the $15,000 federally-mandated limit.
- The upper limit for income contribution to an ABLE account by a beneficiary is now $12,140 per year, so long as their employer does not contribute to their retirement program.
Which States Have the ABLE Program?
Check to see if your state has enacted the ABLE program. If not, you can still signup for an account in another state because the ABLE Act is federal law.
Alabama
- Eligibility: Nationwide
- Minimum to Open: $50, waived if you sign up for automatic payroll deductions of $25 or more
- Annual Fee: $45
- Investment Options: 3 investment options with funds from Vanguard, plus bank savings and checking accounts
- Tax Benefits to State Residents: None
- Program Website: Enable Savings Plan Alabama
Alaska
- Eligibility: Nationwide
- Minimum to Open: $25
- Annual Fee: $40 (plus an extra $15 if you want paper statements and confirmations)
- Investment Options: 6 portfolio options with funds from BlackRock, Schwab, and Vanguard; plus an integrated checking/debit account
- Tax Benefits to State Residents: None
- Special Features: A member of the National ABLE Alliance, a group of 13 states that have pooled resources in order to offer state ABLE programs, and one of the first to go live
- Program Website: Alaska ABLE Plan
Florida
- Eligibility: State residents only
- Minimum to Open: $0
- Annual Fee: $0
- Investment Options: 3 portfolio options with funds from Vanguard, Florida PRIME, and BlackRock.
- Tax Benefits to State Residents: None
- Program Website: Florida ABLE United
Illinois
- Eligibility: Nationwide
- Minimum to Open: $25
- Annual Fee: $45 (plus an extra $15 if you want paper statements and confirmations)
- Investment Options: 6 portfolio options with funds from Blackrock, Charles Schwab, and Vanguard, plus a high-yield savings with Sallie Mae and an integrated checking/debit account
- Tax Benefits to State Residents: None
- Special Features: A member of the National ABLE Alliance, a group of states that have pooled resources in order to offer state ABLE programs
- Program Website: Illinois ABLE
Iowa
- Eligibility: Nationwide
- Minimum to Open: $25
- Annual Fee: $45 (plus an extra $15 if you want paper statements and confirmation)
- Investment Options: 6 portfolio options with funds from BlackRock, Charles Schwab, and Vanguard; plus an integrated checking/debit account
- Tax Benefits to State Residents: Up to a $3,128 of contributions are deductible for individual state income taxes
- Special Features: A member of the National ABLE Alliance, a group of states that have pooled resources in order to offer state ABLE programs
- Program Website: IAble
Kansas
- Eligibility: Nationwide
- Minimum to Open: $25
- Annual Fee: $45 (plus an extra $15 if you want paper statements and confirmation)
- Investment Options: 6 portfolio options with funds from BlackRock, Charles Schwab, and Vanguard; plus an integrated checking/debit account
- Tax Benefits to State Residents: None
- Special Features: A member of the National ABLE Alliance, a group of states that have pooled resources in order to offer state ABLE programs
- Program Website: Kansas ABLE Savings Plan
Kentucky
- Eligibility: State residents only
- Minimum to Open: $5
- Annual Fee: $60
- Investment Options: 5 portfolio options with funds from Vanguard
- Tax Benefits to State Residents: None
- Special Features: Free debit card option to help access funds
- Program Website: STABLE Kentucky
Massachusetts
- Eligibility: Nationwide
- Minimum to Open: $50
- Annual Fee: $30
- Investment Options: 8 risk-based Fidelity portfolio options, ranging from a money market option to an aggressive growth option
- Tax Benefits to State Residents: None
- Special Features: Free debit card and ATM-fee reimbursement for account holders who link their Fidelity Cash Management Account to their ABLE account.
- Program Website: The Attainable Savings Plan
Michigan
- Eligibility: Nationwide
- Minimum to Open: $25
- Annual Fee: $45
- Investment Options: 4 portfolio options with funds from Vanguard and Dimensional Fund Advisors and a FDIC-insured savings account.
- Tax Benefits to State Residents: Up to a $10,000 deduction for joint filers and $5,000 for single filers for contributions made to the accounts
- Special Features: Debit card option available starting in 2017
- Program Website: MiABLE
Minnesota
- Eligibility: Nationwide
- Minimum to Open: $25
- Annual Fee: $45 (plus an extra $15 if you want paper statements and confirmation
- Investment Options: 6 portfolio options with funds from BlackRock, Charles Schwab, and Vanguard, plus an integrated checking/debit account
- Tax Benefits to State Residents: None
- Special Features: A member of the National ABLE Alliance, a group of states that have pooled resources in order to offer state ABLE programs
- Program Website: Minnesota ABLE Plan
Missouri
- Eligibility: State residents only.
- Minimum to Open: $50
- Annual Fee: $42
- Investment Options: 5 portfolio options with funds from Vanguard, plus savings account.
- Tax Benefits to State Residents: None
- Special Features: Free, reloadable prepaid debit card option available
- Program Website: MO ABLE
Nebraska
- Eligibility: Nationwide
- Minimum to Open: $50, or $25 if signed up for monthly payroll deduction
- Annual Fee: $45
- Investment Options: 4 portfolio options with funds from Vanguard, plus an integrated checking/debit account
- Tax Benefits to State Residents: Up to a $10,000 deduction for joint filers and $5,000 for single filers for contributions made to the accounts
- Program Website: Nebraska Enable Savings Plan
Nevada
- Eligibility: Nationwide
- Minimum to Open: $25
- Annual Fee: $45 (plus an extra $15 if you want paper statements and confirmation)
- Investment Options: 6 portfolio options with funds from BlackRock, Charles Schwab, and Vanguard, plus a high-yield savings account with Sallie Mae and an integrated checking/debit account
- Tax Benefits to State Residents: None
- Special Features: A member of the National ABLE Alliance, a group of states that have pooled resources in order to offer state ABLE programs
- Program Website: ABLE NOW
North Carolina
- Eligibility: Nationwide
- Minimum to Open: $25
- Annual Fee: $45 (plus an extra $15 if you want paper statements and confirmation)
- Investment Options: 6 portfolio options with funds from BlackRock, Charles Schwab, and Vanguard; plus an integrated checking/debit account
- Tax Benefits to State Residents: None
- Special Features: A member of the National ABLE Alliance, a group of states that have pooled resources in order to offer state ABLE programs
- Program Website: NC ABLE
Ohio
- Eligibility: Nationwide
- Minimum to Open: $50
- Annual Fee: $30 for state residents, $60 for out-of-state participants
- Investment Options: 5 portfolio options with funds from Vanguard
- Tax Benefits to State Residents: $2,000 per contributor
- Special Features: Free debit card option available
- Program Website: Ohio STABLE Accounts
Oregon
- Eligibility: Oregon ABLE Savings Plan is open to in-state residents; ABLE for ALL savings plan is open to participants nationwide
- Minimum to Open: $25
- Annual Fee: $45 for state residents (half off through 2017), $55 for out-of-state participants
- Investment Options: 3 portfolio options with funds from Vanguard and Dimensional Fund Advisors and an FDIC-insured savings account
- Tax Benefits to State Residents: Up to a $4,620 deduction for joint filers and $2,310 for single filers for contributions made to benefit account holders who are under age 21
- Special Features: Reloadable prepaid card available for $1.50 annual fee
- Program Website: Oregon ABLE Savings Plan
- At Stephen's Place, we work with Palladio Group to provide educational events for families who are looking to set up an ABLE savings account in Oregon. Click here if you need help setting up your ABLE Savings account in Oregon.
Pennsylvania
- Eligibility: Nationwide
- Minimum to Open: $25
- Annual Fee: $40 (plus an extra $15 if you want paper statements and confirmations)
- Investment Options: 6 portfolio options with funds from Blackrock, Charles Schwab and Vanguard; plus a high-yield savings account with Sallie Mae and an integrated checking/debit account
- Tax Benefits to State Residents: None
- Special Features: A member of the National ABLE Alliance, a group of states that have pooled resources in order to offer state ABLE programs
- Program Website: PA ABLE
Rhode Island
- Eligibility: Nationwide
- Minimum to Open: $25
- Annual Fee: $40 (plus an extra $15 if you want paper statements and confirmations)
- Investment Options: 6 portfolio options with funds from BlackRock, Schwab, and Vanguard; plus an integrated checking/debit account
- Tax Benefits to State Residents: None
- Special Features: A member of the National ABLE Alliance, a group of 13 states that have pooled resources in order to offer state ABLE programs, and one of the first to go live
- Program Website: RI’s ABLE
Tennessee
- Eligibility: Nationwide
- Minimum to Open: $25
- Annual Fee: $0
- Investment Options: 14 portfolio options with funds from Vanguard and Dimensional Fund Advisors
- Tax Benefits to State Residents: None
- Program Website: ABLE TN
Vermont
- Eligibility: State residents only.
- Minimum to Open: $50
- Annual Fee: $42 starting April 2017
- Investment Options: 5 portfolio options with funds from Vanguard and an FDIC-insured savings account.
- Tax Benefits to State Residents: None
- Special Features: Free, reloadable prepaid debit card option available
- Program Website: VermontABLE
Virginia
- Eligibility: Nationwide
- Minimum to Open: $0
- Annual Fee: $39, but waived if you maintain $10,000 daily average
- Investment Options: 6 portfolio options with funds from Vanguard and Fidelity
- Tax Benefits to State Residents: $2,000 per contributor
- Special Features: Free debit card option available
- Program Website: ABLEnow
At Stephen’s Place, we work with Palladio Group to provide educational events for ABLE accounts and other financial planning for individuals with intellectual and developmental disabilities.
About Stephen’s Place
Stephen’s Place is an independent apartment community for adults with developmental and intellectual disabilities, located in Vancouver, WA (7 minutes from Portland, OR).
If you have a loved one with developmental or intellectual disabilities, who is looking for a community to live in, please contact us for more information.
Stephen’s Place is a private-pay apartment community due to our state-of-the-art amenities and programs. We are a nonprofit and do not profit from our community. We are private pay because we spend more than some housing communities to ensure that our residents are comfortable and can safely live their lives with independence and dignity.