Autism Speaks' Senior Policy Adviser and Counsel, Stuart Spielman, appeared in an interview in Kiplinger magazine to discuss ABLE (Achieving Better Life Experience), a law enacted in December that will allow the creation of tax-advantaged savings accounts for people with disabilities.
An excerpt of his interview below:
How will these ABLE accounts work? The structure will be similar to 529 college-savings plans. Anyone can establish an account for an eligible beneficiary. I could open one for my disabled son, for example, or a person with a disability could open one herself. A beneficiary can only have one ABLE account. Contributions to the account are after-tax, but earnings and distributions from the accounts for qualified expenses won't count as taxable income. Annual contributions can't exceed the federal gift-tax exemption, currently $14,000, and the total account can't exceed state-based limits for 529 accounts.
Who qualifies for an account? A beneficiary has to have a disability that is present before age 26. The statutory definition of disability is "marked and severe" functional limitations. People who've met the disability standard for Supplemental Security Income (SSI) will qualify. There will also be a certification process defined by law. We're talking about severe disabilities — conditions such as autism, Down syndrome or blindness — where future needs will be great.
To read the rest of Spielman's interview, pick up a copy of Kiplinger magazine.
To find out more about ABLE, go to the links below: