FOR PEACE OF MIND , CONTACT ELIZABETH ANNE LEY , CPA .
INDUSTRY INSIGHT
LIFE INSURANCE
SPONSORED CONTENT
PENNSYLVANIA ABLE ACCOUNTS EXPANDING IN PA
Allowing qualified individuals with disabilities to save money in a tax-exempt account that may be used for qualified disability expenses .
Elizabeth Anne Ley
FOR PEACE OF MIND , CONTACT ELIZABETH ANNE LEY , CPA .
In December 2014 , Congress passed the Achieving a Better Life Experience ( ABLE ) Act , which added Section 529A to the federal tax code . The ABLE Act , considered by many to be one of the most significant pieces of legislation for the disability community since the Americans with Disabilities Act ( ADA ), had overwhelming bipartisan support in both the Senate and the House and was the result of a decade-long cross-disability grassroots effort . The effort originated with a group of parents of children with disabilities who recognized the unfairness of not being able to save funds in their children ’ s names for fear of losing essential benefits that allowed their children to live independently in the community . The ABLE accounts follow federal laws but are implemented at the state level and operate similarly to 529 educational accounts .
Some advantages of ABLE accounts are :
1 . There is little to no cost in establishing these accounts .
2 . Funds contained in these accounts are Non-Countable Resource Assets , meaning they are not counted for Social Security Income eligibility if the total account size doesn ’ t exceed $ 100,000 or for Medicaid purposes until the account exceeds the state maximum for 529 plans in PA in 2023 , which was $ 511,000 .
3 . The investment income earned on ABLE accounts is tax-free if it is distributed for the individuals ’ qualified expenses related to disability , health , education , housing , transportation , training , assistive technology , and personal support .
4 . The contributions are a nonrefundable tax credit on the donor ’ s Pennsylvania return .
Some disadvantages of the ABLE accounts are :
1 . ABLE accounts can only be established to benefit people who developed their disabilities before turning 26 years old . ( Note , however , that this age restriction is changing in 2026 , extending to disabilities developed before turning 46 years old . This will be especially important for veterans and others who develop disabilities later in life .)
2 . If funds remain in an ABLE account upon the death of the account beneficiary , funds must first be used to reimburse the government for Medicaid benefits received by the beneficiary . Then , the remaining funds must pass through probate ( an often-onerous court process ) to be transferred to the beneficiary ’ s heirs .
3 . Contributions to ABLE accounts are limited to $ 17,000 per year ( in 2023 ). They can hold up to $ 100,000 without hurting a Supplemental Security Income ( SSI ) beneficiary ’ s eligibility , whereas there is no limit on contributions to special needs trusts ( although gift taxes could apply ). However , if they do not have an employer-sponsored retirement plan , ABLE account owners who work may contribute up to an additional $ 13,590 ( in 2023 ) of their gross income into their ABLE account .
Interested in learning more about these alternatives to Special Needs Trusts ? Reach out to Elizabeth Ley , TurnKey Services , at cell 412.639.5533 or office 412.526.8450 . TurnKey Services , LLC ( TKS ) is located at 311 S . Central Avenue , Canonsburg , PA 15317 . Email to info @ tkstoday . net .
Elizabeth will be happy to meet with you at NO OBLIGATION to discuss your personal strategy .
View her website at www . tkstoday . net
TurnKey Services LLC ( TKS ) is located at 311 S . Central Avenue , Canonsburg , PA 15317
Please call Elizabeth at ( C ) 412-639-5533 or ( O ) 412-526-8450 . Email at info @ tkstoday . net
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