November/December 2020 AchievABLE™ Newsletter: Anniversary Edition

This December, the ABLE Act celebrates its sixth birthday! The Stephen Beck Jr. Achieving a Better Life Experience Act (ABLE Act) was signed into law on December 19, 2014.

The November/December issue of our AchievABLE™ Newsletter contains stories on the following:

IRS Publishes ABLE Final Rules

On November 19, 2020, the Internal Revenue Service (IRS) published the final regulations for the ABLE Act in the federal register under Section 529a, of the IRS code. The regulations provide guidance to states in their management of ABLE plans as tax-favored savings and investment accounts and defines qualified disability expenses (QDEs). The IRS regulations, which were effective November 19, 2020, provide a transition period of at least two years for ABLE plans to implement these rules which gives the IRS an opportunity to address concerns and issues through notices or other guidance. Certain select provisions from the final regulations are summarized in the ABLE NRC’s Highlights and Key Takeaways document.


ABLE NRC Announces Launch of Service Provider Toolkit

The recently launched ABLE NRC Service Provider Toolkit provides strategies, tools and resources that are intended to help service providers, case managers and advocates introduce and explain basic information about ABLE accounts to customers and families. Strategies include how to save in an ABLE 529A tax-advantaged savings and/or investment account and inform customers about ABLE accounts as a protected savings and investment option that does not impact most federal benefits. Toolkit materials may be shared at the time of intake, during presentations, within service plan or integrated resource team meetings, within Individual Education Plans and Individual Employment Plans and when providing transitional services. To learn more, visit the ABLE Service Provider Toolkit webpage.


ABLE NRC Webinars

Upcoming Webinar

January’s ABLE Program Spotlight on New York ABLE will be held on Thursday, January 28, 2021 from 3:00 -4:00 p.m. ET.

The NY ABLE Program is a tax-advantaged savings program for individuals with disabilities and their families to save for their current or long-term needs while maintaining their ability to benefit from federal benefits programs such as Supplemental Security Income (SSI), Social Security Disability Insurance (SSDI) and Medicaid. Its program offers multiple investment options including a checking account and debit card option allowing individuals with disabilities to maintain their independence and have quick and easy access to their own money. The NY ABLE team from OSC and Ascensus will be discussing program highlights such as:

  • Who is eligible for NY ABLE?
  • How you can save and grow or grow your money with a NY ABLE account?
  • What are qualified disability expenses?
  • How to sign up for a NY ABLE account

Presenting for NY ABLE will be:

  • Jenna McClosky, Outreach Coordinator for NY ABLE at OSC
  • Grisel Davis, Senior Program Officer for NY ABLE at OSC
  • Paul Souppa, ChFC, Sr. Investment Analyst, Investment Management, Ascensus Government Savings

Register for the Webinar

Webinar Archive

November’s Texas ABLE Spotlight Webinar: This webinar highlighted the basics of the federal ABLE Act and takes you on a deeper dive into the features of the Texas ABLE Program.

View the archive

Ambassador Highlight: Jessica Sahlman

Jessica baking cupcakesJessica Sahlman is a 23-year-old who is back working two days a week at her beloved job at Beanz and Company with new safety protocols in place, after being off work during the spring due to COVID-19. She is a self-advocate who strongly believes that ABLE accounts are a great tool for her community of people with intellectual and developmental disabilities (I/DD). She believes this so strongly that she testified twice to the Connecticut State Legislature, asking them to open an ABLE program in her home state. She was invited to participate in the CT ABLE Program launch two months ago in October 2020. Her photo with Connecticut State Treasurer, Shawn Wooden is highlighted below.

Jessica, who has Down syndrome, did not want to wait for Connecticut to open their program before she could start planning and saving for her dream life, and she didn’t have to. Two years ago, she opened her ABLE account with one of the ABLE programs available to out-of-state residents, the Ohio STABLE Program. After the first year, she transferred her account to the PA ABLE Savings Program. Her ABLE account has allowed her to save her money rather than needing to “spend it down.” Like many other young adults, Jessica had been living with her parents and was excited to move into the next more independent phase of her life. She is making that dream happen with the help of a system of supports, including her ABLE account.

Jessica’s case manager, Erik Madsen, with the Connecticut Department of Developmental Services (DDS), introduced Jessica and her parents to the ABLE account. One condition for eligibility to receive DSS services is that the person receives a Social Security benefit. When he’s speaking with his clients about benefits, Erik tells them that, “Setting up an ABLE account is a great way to not lose benefits, but still be able to put money aside to pay for wanted or needed items.”

Jessica is doing just that! She is moving out of her parents’ home and into a new state-of-the-art supported living apartment complex, fitted out with assistive technology, in early January. Instead of living with her parents, she will be living 10 minutes away from them with a roommate and getting 20 hours of support services a week. Jessica’s long-term goal for her ABLE account is to save enough to purchase a driverless vehicle, once they are offered to the public, to build even more independence into her life.

Strategically, Jessica has a monthly transfer of funds from her regular bank account to her ABLE account so she can save regularly while staying within benefit resource limits. Her father, John, is helping Jessica keep her focus on long-term investments and earnings within her ABLE account to meet her goals for increasing independence. Now that Jessica’s father has retired, Jessica receives additional SSDI income, based upon his earnings record, which she can deposit into her ABLE account. Jessica’s case manager, Erik, continues to help by evaluating and layering in additional work supports such as the Medicaid Buy-in Program that allows for greater earnings and resources while retaining Medicaid coverage. All of these resources help Jessica to earn and save more within her ABLE account, helping her achieve a better life now and into the future.

Visit Jessica’s Ambassador Profile


AchievABLE™ Top 3 Questions: November/December 2020

Question: When were the ABLE “Final Regulations” released by the IRS and what major changes are being made?

Answer: The ABLE final regulations were pre-released by the IRS on October 1, 2020. The final regulations were then published in the Federal Register on November 19, 2020, and that is the effective date. The “Guidance Under Section 529A: Qualified ABLE Programs” published in the federal register is the official document.

The “Guidance Under Section 529A: Qualified ABLE Programs” combines two previously issued sets of proposed regulations. The IRS published the first set of proposed regulations in 2015 following passage of the ABLE Act. They published the second set in 2019 after enactment of the Tax Cuts and Jobs Act of 2017 and the Protecting Americans from Tax Hikes Act of 2015, both which made significant changes to ABLE accounts. The IRS final regulations provide a transition period of at least two years for ABLE plans to implement the rules which gives the IRS an opportunity to address concerns that may be further addressed through notices or other guidance. Certain select provisions from the final regulations are summarized in the ABLE NRC’s Highlights and Key Takeaways document.

Question: What is the contribution limit to an ABLE account and how much money can I have in the account?

Answer: Annual contributions to an ABLE account are limited to $15,000 in 2020. This amount remains unchanged for 2021. An employed individual may contribute more under the ABLE to Work Act. Using Social Security work supports like the “Student Earned Income Exclusion” can help a person keep more of their Supplemental Security Income and earnings to save and/or invest within their ABLE account.

The ABLE account may be established in any state (including the District of Columbia) that has a program, so long as the eligible individual meets the residence requirement, if there is one. The ABLE account is a “529 plan,” similar to a college savings plan, and both share the same cumulative contribution limit, which is different in each state. Over the lifetime of making contributions and distributions, the ABLE account balance may not exceed the balance limit, which ranges from $235,000 to $529,000, based upon the ABLE plan state limit.

For individuals who receive Supplemental Security Income benefits, there is another important limit to know. The resource limit for an individual is $2,000, but savings in an ABLE account of up to $100,000 are not counted. Amounts over $100,000 in the ABLE account are counted towards the SSI resource limit along with other non-ABLE resources and may cause the SSI benefit to be suspended until the balance is reduced by spending down. This suspension applies to SSI. Any amount of ABLE savings is not a countable resource for any type of Medicaid, Medicare, FAFSA, HUD, SNAP or SSDI benefit.

Question: Are ABLE distributions taxable?

Answer: In most instances, no. When an ABLE distribution is used to pay for qualified disability expenses, it is not taxable. If ABLE funds are not spent on QDEs, the interest earnings portion of the distribution is countable income and is subject to tax and a 10 percent penalty, which may impact means-tested benefits. Therefore, it is important to withdraw only what is needed to pay for qualified disability expenses, keep receipts for each calendar year and monitor your account balance.

A person may pay for QDEs up to 60 days, following the end of the calendar year, for tax purposes.

You can deposit up to an additional $12,490 of your earnings into your ABLE plan if you live in the continental U.S. The amounts are higher for Alaska or Hawaii residents, $14,380 or $15,600, respectively. Just remember that you may need to register with your ABLE plan to save the additional ABLE to Work Act earnings and, if you are no longer employed or if you move to a state where the ABLE to Work limits are different, you need to let your ABLE plan know. The ABLE to Work Act amount limit may change each year.


State ABLE Program News

  • Texas ABLE Program Prepaid Card: On November 30, 2020 Texas Comptroller Glenn Hegar announced the launch of the U.S. Bank® Focus Card — a new prepaid debit card for Texas ABLE® Program account owners. With the Focus Card, Texas ABLE account owners can pay for qualified disability expenses on the go or online — anywhere nationwide that accepts Visa® debit cards. For more information, visit the Texas Comptroller webpage.
  • ABLEnow App: The ABLEnow mobile app is available for iOS and Android devices. ABLEnow, the national ABLE program administered by the Commonwealth of Virginia, is the first ABLE program to offer an app. Visit the ABLEnow webpage to learn more.
  • STABLE Account Direct Deposit of Earnings: Several cities and counties and private sector employers in Ohio partnered with the State Treasurer’s office to provide an option for employees and their families to direct deposit earnings into the STABLE account for themselves or a family member. Read about this partnership or a new partnership announced last week in Ashtabula County.

(ABLE NRC Note: Keep in mind that earned income is subject to Supplemental Security Income and Social Security Disability Insurance earned income rules. The use of SSA work supports may reduce countable earned income. It is important that SSI and SSDI recipients contact a free benefits counselor to learn what work supports for which they are specifically eligible. ABLE contributions from an employer, even when directly deposited into an ABLE account, are taxable unearned income for the ABLE account owner and may impact means-tested benefits such as SSI and Medicaid. Visit the ABLE Employer Toolkit webpage for related resources.)