Gift Cards: A New Way to Contribute to ABLE Accounts
People wishing to help someone with special needs save for their future without jeopardizing the recipient's public benefits can now do so using a Gift of Independence gift card.
Funds in these gift cards can be placed directly into a person’s ABLE account, which is a relatively new and growing savings tool for people with disabilities. “ABLE” stands for the Achieving a Better Life Experience Act, which Congress enacted in 2014 and patterned after college savings (“529”) accounts. Funds deposited in ABLE accounts can be used for a wide range of disability related expenses, including expenses related to education, housing, transportation, employment training and support, and assistive technology.
ABLE account funds spent in these ways do not affect eligibility for government benefit programs like Medicaid and Supplemental Security Income. ABLE accounts, however, are limited to people whose disability began before the person turned 26, effectively excluding many people with chronic conditions and later-onset disabilities.
In total, ABLE accounts can hold up to $100,000 (without affecting SSI benefits - it can hold even more money, but SSI payments will be suspended), with annual contributions capped at $15,000 (which limit indexes up with the annual gift tax exclusion).
A Gift of Independence card can be a way to celebrate or reward a family member or anyone else with special needs who has opened an ABLE account. The cards are offered in denominations from $25 to $200 and can be purchased here. There is no expiration date for redeeming the funds.
Additionally, under the Saver’s Credit certain contributors may also be able to deduct the first $2,000 in contributions to ABLE accounts, and $4,000 if the contributor is married and filing jointly.
Fact sheets, videos and other information on ABLE accounts are available from the ABLE National Resource Center.
To learn more about ABLE accounts and whether they are a worthwhile option for you or a loved one, contact your special needs planner.