ABLE Acoounts Act News:
AUTISM SPEAKS APPLAUDS THE INTRODUCTION OF THE ABLE ACCOUNTS ACT - S. 493
NEW YORK, NY (February 27, 2009) -- Autism Speaks, the nation’s largest autism science and advocacy organization, today applauded Senators Robert Casey (D-PA), Orrin Hatch (R-UT), and Christopher Dodd (D-CT) for introducing S. 493, the ABLE Accounts Act of 2009, which would encourage individuals with autism and other disabilities and their families to save, tax-free, for disability-related expenses. Senators Richard Burr (R-NC), Edward Kennedy (D-MA), and Sam Brownback (R-KS) are the bill’s original co-sponsors.
The ABLE Accounts Act of 2009 – or Achieving a Better Life Experience Act – would amend the IRS code to provide for the establishment of savings accounts “for the purpose of supporting individuals with disabilities to maintain health, independence, and quality of life.” Similar in many respects to existing 529 college savings plans, these accounts will be exempt from federal taxation, provided certain rules are met. The legislation’s intent is to supplement rather than to replace benefits provided by other sources, including Medicaid and private insurance... Read more
Summary of the ABLE Accounts ACT of 2009:
S. 493 - Sponsored by Senator Robert Casey (D-PA), Senator Orrin Hatch (R-UT, and Senator Christopher Dodd (D-CT)
H.R. 1205 - Sponsored by Congressman Ander Crenshaw (R-FL)
Original Cosponsors:
S. 493 - Senators Richard Burr (R-NC), Edward Kennedy (D-MA), and Sam Brownback (R-KS)
H.R. 1205 - Congressmen Patrick Kennedy (D-RI), Cathy McMorris Rodgers (R-WA), and Kendrick Meek (D-FL)
- The ABLE Account: An ABLE account is a trust created or organized in the United States exclusively for the purpose of paying qualified disability expenses of an individual with a disability who is the designated beneficiary of the trust. An ABLE account must be designated as an ABLE account at the time it is created or organized.
- Contributions: Contributions to an ABLE account must generally be in cash. Contributions cannot exceed $500,000 in the aggregate and cannot be made after the beneficiary turns 65.
- Qualified beneficiaries: There are two groups of qualified beneficiaries:
- (1) Individuals who are receiving supplemental security income (SSI) benefits due to blindness or disability, or those receiving Social Security disability (SSD) benefits; and
- (2) Individuals who would be eligible to receive SSI or SSD benefits if their income and assets and their ability to perform substantial gainful activity were not taken into account. These individuals need not have been determined blind or disabled by the Social Security Administration.
- Tax treatment of accounts: ABLE accounts are generally exempt from taxation. Also, up to $2,000 in contributions to an ABLE account may be deductible each year. Deductions can be claimed as follows:
- Joint return filers can claim a deduction only if their modified adjusted gross income is less than $70,000; the deduction begins to phase out at $60,000
- In the case of heads of household, the limits are $52,500 and $45,000
- In any other case, the limits are $35,000 and $30,000
- Beginning in 2011, all the amounts will be adjusted for inflation
- Allowable expenses: Qualified disability expenses are expenses (1) made for the benefit of an individual with a disability who is the designated beneficiary of the trust and (2) approved under regulations. These expenses include costs associated with education, housing, transportation, employment support, health, prevention and wellness, life necessities, assistive technology and personal support services.
- Effect on federal benefits: Account funds are disregarded for purposes of certain other means-tested federal programs, such as Medicaid, food stamps, and federal housing assistance.
- Upon the death of a qualified beneficiary, Medicaid will recover from unused account funds that are not placed in an ABLE account or special needs trust of another beneficiary an amount equal to the total medical assistance paid.
Download a PDF of this summary
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Bill History:
February 26, 2009: The ABLE Accounts Act, S. 493 and H.R. 1205, are introduced in the Senate and House. S. 493 is referred to the Senate Committee on Finance. H.R 1205 is referred to the House Ways & Means Committee and the House Energy & Commerce Committee.
Cosponsors:
Helpful Links:
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