Is Congress Working on a Way to Make ABLE Accounts More Beneficial?

We have blogged about the Achieving a Better Life Experience Act (ABLE Act) in the past, including in March when we discussed how ABLE accounts work to help people with disabilities avoid paying taxes on certain forms of income. Recently, Congress began considering ways to expand access for those seeking to acquire an ABLE account. If this ABLE account expansion legislation is passed, it could provide a way for more people with disabilities to use ABLE accounts to ease their financial burden.

How Is Congress Planning to Change ABLE Accounts?

Earlier this month, lawmakers from the US House of Representatives and Senate introduced three bills to Congress that would modify the ABLE Act:

  1. The first bill introduced would enable individuals with disabilities who are employed to save money with ABLE accounts. Currently, there is a $14,000 limit to annual deposits to ABLE accounts. Under this proposed law change, in addition the to the $14,000, individuals with disabilities who are employed can save extra amount equal to the federal poverty level, which as of this writing, sits at $11,770. This would raise the annual limit for ABLE account deposits for people with disabilities who are employed from $14,000 to over $25,000.
  2. The second bill would change the age limit to qualify for an ABLE account. Right now, an individual’s disability must have onset prior to age 26 for him or her to qualify for an ABLE account. This bill would make it so that individuals’ disabilities would have to onset before the age of 46 for them to qualify for an ABLE account.
  3. The third bill would enable families to rollover savings from an individual with disability’s 529 college savings account into an ABLE account.

In the video below, Tulsa Social Security disability lawyer Steve Troutman explains why other programs, such as ABLE accounts, are necessary, because Social Security disability insurance (SSDI) covers less than many people realize.

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