Here is some important information for those with disabilities or those who care for someone with disabilities:

The ABLE Act was passed into law one year ago. But, the ABLE Act included a “residency requirement” meaning that a qualified individual could only open an ABLE account in the state where he or she resides and could not “shop around” to other state ABLE programs. This turned out to be an unjust penalty for Pennsylvania and New Jersey residents whose state governments failed to pass the state version of the ABLE Act (33 states passed it but PA and NJ failed to do so).

This “residency requirement” restriction was stricken from the ABLE law when President Obama signed the Tax Extenders bill. Now PA and NJ residents can move forward to set up an ABLE Act account through another state.

The ABLE Act amends Section 529 of the Internal Revenue Service Code of 1986 to create tax-free savings accounts for individuals with disabilities. The bill aims to ease financial strains faced by individuals with disabilities by making tax-free savings accounts available to cover qualified expenses such as education, housing and transportation. The bill supplements, but does not supplant, benefits provided through private insurances, the Medicaid program, the supplemental security income program, the beneficiary’s employment and other sources. Click here to see more info.

Many financial planning professionals feel the ABLE Act has the potential to be a significant financial planning tool for those with disabilities. Feel free to contact us if you have any further questions.