ABLE Account Decision Guide Series

ABLE Accounts and Working People with Disabilities

Using a Federal Tax Refund, Including the Earned Income Tax Credit and Saver’s Credit to Generate Potential ABLE Account Contributions

Some ABLE account owners who work potentially have an annual source of money in the form of a federal and/or state income tax refund. Two key federal tax credits that may generate a tax refund and should be explored are the Earned Income Tax Credit (EITC) and the Saver’s Credit. See the IRS’s EITC information site, https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit and its Saver’s Credit information site, https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-savings-contributions-savers-credit.

The person should consider using a free VITA tax site or other source of free tax filing help to ensure they benefit from any available federal and state tax deductions and credits. See https://www.irs.gov/individuals/free-tax-return-preparation-for-you-by-volunteers.

There is the possibility of additional state tax credits or deductions for those who contribute to an ABLE account. Please see the ABLE NRC State Comparison by Features Tool: https://www.ablenrc.org/state-plan-search/.

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Note: Our ABLE Decision Guide Series is designed as an aid to decision making as it relates to establishing and using an ABLE account. This document does not cover every possible issue related to the topic and is not a substitute to more in-depth analysis that may be required in some cases.