As previously reported, on December 3rd the House of Representatives passed the Achieving a Better Life Experience (ABLE) Act under Division B of H.R. 5771, commonly referred to as the “tax extenders” package. On Tuesday December 16th the Senate passed the bill by a vote of 76 to 16 (with 8 Senators not voting). The bill is expected to be signed into law by the President within ten days.
The ABLE Act will change the tax code to allow for tax advantaged savings accounts for qualified individuals with disabilities to save for certain expenses, such as education and transportation. Similar to existing “Section 529” education savings accounts, ABLE accounts will allow individuals and families to save for disability-related expenses to supplement, but not replace, benefits provided through Medicaid, Supplemental Security Income, the beneficiary’s employment, and other sources. If properly managed, funds in an ABLE account will not jeopardize eligibility for critical federal benefits. With a full understanding of account features, individuals and families can use ABLE accounts as another tool in planning for the lifetime needs of an individual with long term disabilities.
This bill includes age limitations and a cap on contributions, added in July by the House Committee on Ways and Means to reduce the costs of the bill. The Arc will issue a fact sheet reflecting the details of the bill as it has changed through the legislative process. Further details will come through the regulatory process as implementation occurs. Read The Arc’s statement on Senate passage of the ABLE Act.