The Tax Cuts and Jobs Act includes two provisions that enhance ABLE accounts for the disabled, which were set up under the Achieving a Better Life Experience Act of 2014 — the ABLE to Work Act and the ABLE Financial Planning Act.
Natasha Hickman, a senior advisor to Sen. Richard Burr, R-N.C., told state treasurers at their legislative conference in Washington on Feb. 12 that Burr, who introduced the two Acts a couple of years ago, “was able to get these provisions” into the Tax Cuts and Jobs Act.
Getting the ABLE Act passed was an eight-year process, Hickman said, “and evolved over time, but the key goal was to allow families who have a child with a disability to have a savings ability, like folks who were saving for college.”
“We’re now three years out from the passage of the ABLE Act; we’re seeing it implemented, and it’s something we’re very excited about.”
Since its passage in 2014, the Act has been updated three times, Hickman added, with the most recent changes in the tax law that passed in December.
The Financial Planning Act “allows families to roll over funds that they may have saved in a 529 [plan] to an ABLE account,” Hickman said, provided that the beneficiary is the same individual on both accounts. “Families don’t always know when children are born that there may be a disability or one may occur later on,” she said. “We were hearing a lot from the autism community that this is something they really wanted.”
ABLE to Work encourages “employment among folks with disabilities,” Hickman continued. Account owners who have employment may be eligible to contribute above the $15,000 annual contribution limit (possibly up to an additional $12,060 depending on the gross income of the account owner). “There are many in the disability community who want to work but are told to stay home because [they’d] those their [Supplemental Security Income or Medicaid] benefits by working and earning too much.”
Mike Frerichs, Illinois state treasurer, said at the event that state treasurers would continue to work with lawmakers “to get more enhancements” to ABLE accounts. “We know this is an election year, [but] we want to lay the groundwork.”
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