When a sensible bill like the Achieving a Better Life Experience (ABLE) Act that has a long list of benefits, solves a pressing problem, and has bipartisan support, yet for seven years has not been passed, Congressional gridlock is to blame.
What is a 529-ABLE Plan?
The purpose of the 529-ABLE Act is to provide a tax‐deferred savings vehicle for persons with disabilities. It would help those with disabilities and their parents and caregivers, allowing them to put money into tax-deferred savings plans like the 529 plans that parents use to save for college. 529-ABLE accounts would be especially helpful for parents who have a child with disabilities that require intensive, expensive forms of care and wonder what will happen after they die.
Who Qualifies for a 529-ABLE Plan?
529-ABLE Plans would be easier and less expensive to set up and maintain than a trust fund, and would be available to anyone at any age with a medically determined physical or mental impairment which results in marked limitation or can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months or to anyone who is blind.
Are Assets in a 529-ABLE Account Taxed?
Assets in a 529-ABLE account could be accumulated, invested, grown and distributed free from federal taxes, as long as they are used to pay qualified expenses, such as:
- Employment Support
- Health Prevention and Wellness
- Assistive Technology and Personal Support
Can a Disabled Person Have a 529-ABLE Plan and Work?
An individual with a disability can work and maintain a 529-ABLE Plan as long as the individual meets the definition of disability and is engaged in substantial gainful activity.
Can an Individual Have More Than One 529-ABLE Plan?
There are no limits on the number of 529-ABLE Plans per beneficiary.
Would a 529-ABLE Plan Effect an Individual’s SSI or Medicaid Benefits?
There is no impact on a beneficiary’s federal benefits, including SSI and Medicaid, if he/she is the beneficiary of a 529-ABLE account, until his/her total combined assets, including funds in that person’s 529-ABLE account, exceed $102,000.
Can a 529-ABLE Account of a Deceased Beneficiary be Transferred to Another Beneficiary?
Upon the death of a 529-ABLE beneficiary, the account could be rolled over to another beneficiary without a taxable event if the beneficiary is the spouse or another qualified individual.
At last count, the bill had 342 co-sponsors in the House and 66 in the Senate, and now needs a vote.