The Tax Cuts and Jobs Act includes two provisions that boost Achieving a Better Life Experience (ABLE) accounts for those with disabilities. These are the ABLE Financial Planning Act and the ABLE to Work Act. The primary goal of the ABLE account legislation is to allow families who have children with a disabilities to have a savings ability, similar to people saving for college, without the account adversely affecting eligibility for means-tested benefits.
The Financial Planning Act allows a family to transfer funds from a 529 plan to an ABLE account as long as the beneficiary remains the same. This is important because families don’t always know when a child is born that there may be a disability, or disability may occur later on.
The ABLE to Work Act encourages employment among people with disabilities. Disabled account owners who are employed may be eligible to contribute above the 2018 $15,000 annual contribution limit, possibly up to an additional $12,060 depending on the gross income of the account owner. This promotes employment because there are many disabled individuals who want to work but have been unable to or limited in doing so because of loss of their Supplemental Security Income (SSI) or Medicaid benefits by working and earning too much.