The December issue of our AchievABLE Newsletter contains stories on the following:
- New Webinar: Celebrating the Fifth Anniversary of ABLE with ABLE JeoPARODY
- End-of-Year ABLE NRC Ambassador Videos
- Top Three Questions: December
- ABLE National Resource Center: Worth the Investment
- New IRS Tax Tip ABLE Account Video
- IRS Comment Period
- State ABLE Program News
New Webinar: Celebrating the Fifth Anniversary of ABLE with ABLE JeoPARODY
December 19, 2019 – 2:00 – 3:00 p.m. ET
December 19 will be the fifth anniversary of the passage of the Achieving a Better Life Experience (ABLE) Act into law. The ABLE National Resource Center (ABLE NRC) invites you to join us as we celebrate this momentous occasion by sharing important ABLE facts and updates in a fun and festive way through our ABLE JeoPARODY Game Show. This fresh take on Jeopardy will feature three working-age ABLE account owners competing for cash prizes into their ABLE accounts using what they know (or think they know) about ABLE. They will be competing to win. We hope you will join us to cheer them on and to celebrate and solidify your own knowledge around how to increase your financial stability through ABLE.
Our JeoPARODY Game Show host will be Michael Morris, founder of National Disability Institute. ABLE account contestants will include:
- Taylor Carty, a student with Cerebral Palsy who is using ABLE to support her goal of becoming a pediatric physician and for other big-ticket items and future expenses.
- Emily Munson, a disability rights attorney with Spinal Muscular Atrophy who is using her ABLE account to support accommodations needed for international travel and to save for a down payment on a wheelchair-accessible home.
- Hector Ramirez, an individual with Autism and Bipolar disorder who serves as a board member on national disability rights networks and state-level behavioral health councils. Ze is also a Latino Chiricahua Apache member of the LGBTQ community who battled homelessness for decades. Hector is using hir ABLE account towards stable housing.
End-of-Year ABLE NRC Ambassador Videos
In recognition of the fifth anniversary of ABLE, the ABLE NRC invited our Ambassadors and Ambassador Alumni to participate in an internal video contest. In the winning videos, our ABLE NRC Ambassadors share their personal ABLE story to showcase for others the benefit of opening an ABLE account and starting on the road to a better financial future. Here are the winners! You can also visit our website to learn more about all of our ABLE NRC Ambassadors and Ambassador Alumni.
First Place: Edward Mitchell (2018 ABLE NRC Ambassador Alumni)
Second Place: Miles Lessen (2019 ABLE NRC Ambassador)
Third Place: Nathaniel Dykstra (2019 ABLE NRC Ambassador)
Top Three Questions: December
1. The fifth anniversary of the ABLE Act is this month. Is there any hope that the age limit of eligibility for an ABLE account will be raised? My disability began after age 26, and I am a wounded warrior.
The ABLE Age Adjustment Act (S. 651/H.R. 1814) was introduced on March 5, 2019, and is in the first stage of the legislative process. It would amend Section 529A(e) of the Internal Revenue Code to increase the eligibility threshold for ABLE accounts for onset of disability from prior to age 26 to prior to age 46.
S. 651 is currently pending with the Committee on Finance and H.R. 1614 was referred to the Ways & Means Committee. In order to become law, either bill must be passed by both branches of Congress and then signed by the President. If and when the ABLE Age Adjustment Act is passed, the ABLE NRC will announce it in the AchievABLE newsletter and through social media.
Read more about the ABLE Adjustment Act.
2. How has ABLE changed since the ABLE Act was passed into law?
There have been quite a few changes affecting ABLE accounts in the last five years. Here are a few:
- The annual contribution limit was raised to its current limit of $15,000 per calendar year (to adjust for inflation). The contribution limit has remained at $15,000 for 2020.
- Employed individuals can contribute their earnings into their ABLE account up to $12,140 ($15,180 for Alaska and $13,960 for Hawaii residents) each year so long as they do not have a retirement plan available to which they or their employer contributes. This is in addition to the annual contribution limit of $15,000.
- Owners of both an ABLE account and a 529 College Savings account (or a family member is the 529 College Savings account beneficiary as defined by the law), may transfer funds from the 529 College Savings account to an ABLE account without incurring tax or penalty. However, the funds transferred from the 529 College Savings account count toward your annual contribution limit of $15,000 for the tax year.
Contributions to an ABLE account are included in the IRS Retirement Savings Contributions Tax Credit (i.e., Saver’s Credit). For low to moderate-income wage earners, contributions to an ABLE account may qualify the individual for a tax credit of up to $2,000. There are additional requirements that must be met to be eligible for this non-refundable credit. Visit the IRS website to find a free tax preparer.
For more information, visit Changes to ABLE Summary.
3. Does the Social Security Administration accepted date of when my disability began (i.e., disability onset date) determine whether or not my disability started before the age of 26 and whether or not I can open an ABLE account?
Not exactly. If the Social Security Administration (SSA) determines that your disability began before age 26 and awards you a disability-based benefit, then you are in luck and can open an ABLE account.
If SSA determines that your disability began after the age of 26, you may still be able to open an ABLE account. Your physician will need to give you a disability certification stating that your disability began before age 26 and that you meet the SSA definition and criteria regarding significant functional limitations.
With Social Security, various technical factors, such as substantial gainful activity (work), insured status or even a parent’s earnings can result in SSA establishing a disability onset date much later than when the onset of the disability occurred.
SSA staff are not responsible for determining when the disability began for an ABLE account. SSA headquarters told the ABLE NRC that SSA staff are to direct ABLE eligibility inquiries to the state.
Visit our website to find all federal guidance on ABLE accounts, including information from the SSA and the Treasury/IRS.
ABLE National Resource Center: Worth the Investment
The ABLE National Resource Center (ABLE NRC) has become the leading information resource on ABLE, with more than 3.5 million visitors to our website, participants in our monthly webinars and individuals downloading materials. We are thankful to play a vital role in helping you become a more informed decision maker about ABLE.
We recently updated our ablenrc.org website with new materials and continue to update and enhance our state ABLE comparison tools so that they are accurate and responsive to your questions.
This holiday season, we need your support more than ever. We ask that you consider making a contribution to continue the education activities of the ABLE National Resource Center. We receive no public funding and depend on you to keep the ABLE NRC going strong so that we can continue to provide objective, independent information about ABLE programs and activities, including guidance on tax-advantaged ABLE savings accounts.
New IRS Tax Tip ABLE Account Video
Check out the new video the Internal Revenue Service (IRS) released on tax tips for ABLE accounts.
IRS Tax Tip ABLE Account Video: English Spanish ASL
IRS Comment Period
A proposed rule by Internal Revenue Code (Code) relating to contribution limits applicable to ABLE accounts has been posted on the Federal Register. The posted document contains proposed regulations related to the Internal Revenue Code (Code), which allows a State (or its agency or instrumentality) to establish and maintain a tax-advantaged savings program under which contributions may be made to an ABLE account for the purpose of paying for the qualified disability expenses of the designated beneficiary of the account. The affected Code section was amended by the Tax Cuts and Jobs Act, signed into law on December 22, 2017. The Tax Cuts and Jobs Act allows certain designated beneficiaries to contribute a limited amount of compensation income to their own ABLE accounts.
The ABLE NRC encourages you to read the proposed regulation and submit a comment. The comment period is open until January 8, 2020.
Access the Federal Register document and submit a comment
ABLE Program News
- For calendar year 2020, the first $15,000 of gifts to any person (other than gifts of future interests in property) are not included in the total amount of taxable gifts under $2503 made during that year. 2020 IRS Annual Exclusion for Gifts
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In November, the Cincinnati City Council voted to provide the option for city employees to set up recurring direct-deposits from their paychecks into STABLE accounts. Read the full story.