ABLE accounts are tax-advantaged savings accounts for individuals with disabilities and their families. Eligible individuals and their families may establish an ABLE savings account, and these savings are protected and will not affect eligibility for most means-tested benefits such as Supplemental Security Income (SSI), Medicaid and food stamps (SNAP).
Tax-time is an ideal opportunity to introduce ABLE accounts for qualified individuals with disabilities. Oftentimes, individuals with disabilities are hesitant to claim certain tax credits or maximize their tax refund for fear of resource limits attached to some public benefit programs. An individual has 12 months to spend down their refund without the refund impacting their eligibility for needs-based benefits. If a refund is deposited within an ABLE account, the refund will not impact eligibility for most federally-funded, means-tested benefits while saved within the account or when those funds are spent on Qualified Disability Expenses (QDEs). The savings may also serve as a means to save for retirement for many who have a disability, but do not receive public benefits and do not have an employer-sponsored retirement fund.