ABLE Act Update

Achieving a Better Life Experience (ABLE) Act of 2014

ABLE ActOn December 19, 2014, President Obama signed into law the Achieving a Better Life Experience (ABLE) Act of 2014. This Act establishes tax treatments of ABLE accounts under state programs for the care of family members with disabilities.  The purpose of the Act is to encourage and assist individuals and families in saving private funds to support individuals with disabilities to maintain health, independence, and quality of life. The ACT is effective for tax years after Dec 31, 2014 and repeals, amends, or references the Internal Revenue Code of 1986.  For more information on the ABLE Act of 2014, please refer to our March 15, 2015 article, “Achieving a Better Life Experience – What is the ABLE Act?

Pennsylvania ABLE Act, 2016 Act 17

On April 18, 2016, the Pennsylvania legislature enacted the Pennsylvania ABLE Act, 2016 Act 17.  The Act provides for the Pennsylvania Department of the Treasury to establish a savings program to encourage the opening of savings accounts for individuals with disabilities.  The Department must maintain the savings program in a manner to ensure the program’s status as a qualified ABLE program.

An eligible individual or a fiduciary for the disabled person can open a PA ABLE account.  The funds in the ABLE account can be used to pay for qualified expenses related to the eligible person’s disability.  Eligible expenses may include education, housing, transportation, employment training and support, assistive technology and personal support services, health, prevention and wellness, financial management and administrative services, legal fees, and expenses for oversight and monitoring.  Anyone can deposit funds into the ABLE account and gifts may not reduce the beneficiary’s Supplemental Security Income SSI benefits.  SSI benefits may be impacted in certain situations.  The ABLE account will not impact any state needs based benefits for health, disability or education.  Although other states may offer ABLE accounts, there may be additional benefits if accounts are opened in Pennsylvania rather than in other states.  For example, HB1319 would allow ABLE contributions to be deducted from Pennsylvania income taxes.  This bill is currently working through the legislature.

The Department of Treasury anticipates PA Able accounts will be available by the end of 2016.  The Department of Treasury has developed a pre-launch brochure, PA ABLE Brochure, to highlight some of the features and benefits of PA ABLE.  Before making any decisions about participating in the program, you should read the disclosure statement from the Treasury Department when the PA ABLE accounts are available.

Questions? Contact Hoffmeyer & Semmelman

The estate planning attorneys with Hoffmeyer & Semmelman, LLP would be happy to meet with you to establish an individualized estate plan for an individual with disabilities. Contact us today for assistance.

 

By:  Valerie Haight, Support Professional 

Reviewed by: William F. Hoffmeyer, Esquire

© Copyright by Hoffmeyer & Semmelman LLP,   November  2016