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They’re Here…Florida ABLE Accounts
The Achieving Better Life Experience Act, or ABLE Act, was signed into law by President Obama in December 2014. ABLE updates the Internal Revenue Code to allow eligible individuals and their families to establish a tax-exempt savings account that allows for disbursements of income tax-free funds for “qualified disability expenses,” including education, transportation, housing, obtaining and maintaining employment, personal support services, assistive technology and health and wellness. Money contributed to an ABLE account is generally disregarded, or not countable, when determining eligibility for federal benefit programs, such as Supplemental Security Income (SSI) and Medicaid.
The Florida legislature passed the Florida Achieving a Better Life Experience Act, which was signed into law by Governor Rick Scott on May 21, 2015. This state law establishes ABLE United, to oversee the state of Florida’s qualified ABLE program. As of this month, July 2016, eligible Florida residents may establish ABLE accounts.
In order to establish an ABLE account, the individual with a disability must be a Florida resident. Further, the ABLE Act limits eligibility to individuals who have developed significant disabilities before turning 26 years old. You do not have to be under the age of 26 to qualify as long as you have documentation and/or medical records which prove the onset of the disability before age 26. If you meet the age of onset criteria and are receiving benefits under SSI and/or SSDI you are automatically eligible. Otherwise, you must have a condition listed in the “List of Compassionate Allowances Conditions” maintained by the Social Security Administration, certify blindness or have a medically determinable physical or mental impairment.
An individual may only have one ABLE account and the total annual contributions, by all contributing individuals, including family and friends, is $14,000. This amount will be adjusted annually for inflation. Under current tax law, $14,000 is the maximum amount individuals can gift to someone else and not pay taxes. For individuals with disabilities, who also receive SSI and/or Medicaid, there are further limitations. The first $100,000 in an ABLE account will be exempt from the SSI $2,000 individual resource limit. When an ABLE account exceeds $100,000, the beneficiary will be suspended from eligibility for SSI benefits and no longer receive that monthly income. However, the beneficiary will continue to be eligible for Medicaid, as there are no Medicaid limits for ABLE accounts.
If you would like more information about ABLE accounts please contact the Law Offices of Hoyt & Bryan at (407) 977-8080 or visit HoytBryan.com, for more information.