Tax Benefits in 2015 for the Disabled

The final spending bill for next year will have a provision in it that is a tax break for disabled individuals.  It is similar to a 529 college savings plan that will be labeled as Tax-Free ABLE savings accounts.  States will be permitted to set up these programs to enable families to set-aside funds with the intention of providing for the long-term independence, quality of life and health for their family members that qualify.

Individuals must have become blind or disabled before age 26; contributions up to $14,000 are allowed.  There is a lifetime contribution cap that is the same as that for a 529 plan.  In addition.  The ABLE accounts would not affect individuals eligibility for Medicaid, and account balances of $100,000 or less won’t alter SSI benefits.

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