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Indiana Treasurer of State

Indiana Treasurer of State

Treasurer > Treasury Notes (Newsletter) Treasury Notes (Newsletter)

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Senate Enrolled Act 11 (The ABLE Act) Summary

The ABLE Act was created to give individuals with disabilities and their families the opportunity to save for the future without limiting access to critical income, healthcare, food or housing assistance programs.  Currently, eligibility for these important programs requires individuals to meet certain requirements- including reporting no more than $2,000 in cash savings, retirement funds, or other items of significant value each month.

In response to the current financial eligibility requirements, which greatly limit the amount of savings to be amassed by disabled individuals and their families, the Indiana General Assembly passed Senate Enrolled Act 11 (The ABLE Act) which adopted federal legislation to allow states to create tax-free savings accounts for disability-related expenses which can exceed the restrictive $2,000 limitation.

With appropriations from the Indiana General Assembly, we hope to have the program up and running by the Fall of 2017.

Eligibility

  • Individuals who are entitled to Social Security Act benefits based on blindness or disability and
  • blindness or disability occurred prior to age 26

OR

  • Individuals who have filed a disability certification with the IRS for the tax year. The certification must state that:
    • Individual is blind or has a physical or mental impairment that results in severe functional limitations; and
    •  This impairment must have occurred before the age of 26 and;
    •  the impairment must be expected to last for at least twelve months.

Contributions

  • Anyone can contribute to an ABLE account
  • Contributions may not exceed the amount of the annual gift tax ($14,000 for 2016)
  • Accounts may not exceed a lifetime amount of $100,000 (without impacting benefits)

Allowable expenses

  • A qualified disability expense is defined as any expense related to the designated beneficiary as a result of living a life with disabilities. These may include education, housing, transportation, employment training and support, assistive technology, personal support services, health care expenses, financial management, and administrative services.