About 5,000 Americans with disabilities have contributed a total of almost $20 million to a national savings program offered by the commonwealth of Virginia in the past two years since its inception, according to a growing tax-advantaged savings program.
Called ABLEnow, the plan is a savings program offered by Virginia and administered by Virginia529, which is also the country’s largest college savings plan in addition to having expanded to meet the savings needs of those with disabilities.
ABLEnow partners with American Funds, one of the oldest U.S. mutual fund companies.
These tax-advantaged accounts permit individuals with disabilities to save up to $15,000 a year with the savings plan without compromising their eligibility for other benefit programs they may be eligible for, such as Medicaid and Supplemental Security Income.
The 5,000 customers in ABLEnow represent all 50 states. These accounts are open to American citizens and legal residents, regardless of their state of residence. However, the individuals must have a disability that developed before they turned 26, according to the program requirements.
The act created Section 529A of the Internal Revenue Code, the federal legal framework with rules and eligibility requirements that also recognizes the added, significant costs of living with a disability despite receipt of benefits from other government programs.
In 2015, Virginia became the first U.S. jurisdiction to approve and pass its own legislation after passage of the December 2014 federal ABLE Act, which was originally conceived by a group of Virginia parents. ABLEnow launched in December 2016.
The act, formally known as the Stephen Beck Jr. Achieving a Better Life Experience Act, authorizes states to establish tax-advantaged savings programs for those with a disabilities.
“Our Virginia-sponsored ABLE program has become one of the country’s leading ABLE options,” said Mary Morris, CEO of Virginia529 in a statement Tuesday.
However, the program expressed concern that millions of those eligible may not know it exists. It has invited customers to help raise awareness by acting as ambassadors for the program.