Read about a new savings vehicle for persons with a disability soon to be available in New York
It is difficult for your child with a disability to accumulate resources for future discretionary spending or to purchase a “big ticket” item. Your child is limited to meager savings if he or she is means tested government benefits. Recognizing this difficulty, Federal Law authorized States to establish ABLE programs to offer a tax favored vehicle for savings.
Learn what other States currently offer as ABLE Accounts and what may be offered in New York
At least three States have rolled out ABLE Accounts for use by individuals with a disability. My survey of the offerings of these three States is not rigorous, instead it is a description of features which they offer and which might be built into an ABLE Account sponsored by New York
Section 529A of the Internal Revenue Code allows the creation of a qualified ABLE program by a State (or agency or instrumentality thereof) under which a separate ABLE account may be established for a disabled individual who is the designated beneficiary and owner of that account. Contributions to an ABLE account are subject to both an annual and a cumulative limit; and, when made by a person other than the designated beneficiary, are treated as non-taxable gifts to the designated beneficiary. Distributions made from an ABLE account for “qualified disability expenses” of the designated beneficiary are not included in the designated beneficiary’s gross income. Most importantly, amounts in the ABLE Account are not considered an available resource for purposes of means tested government benefits, such as SSI and Medicaid.