Individuals with disabilities and their family members now have a new way to save and plan for future expenses. New Yorkers can now open a tax-deferred 529 Achieving a Better Life Experience (ABLE) account. The accounts are a savings option for families and money earned through the fund is tax exempt if it is spent on qualified expenses. Similar to the 529 College Savings accounts, contributions to the account may be made by anyone.

The NY ABLE Act follows the federal ABLE Act known as the Stephen Beck Jr. Achieving a Better Life Experience Act. This federal act amended the tax code in 2014 and enabled states to create the tax-free savings accounts for individuals with disabilities. According to federal law, each state must pass its own legislation to establish their plan. In 2015, the New York state legislature unanimously passed a bill that authorized the State Comptroller to create the ABLE accounts in New York. The enacting legislation requires the State Comptroller to establish the new savings account plan in consultation with the Office for People with Developmental Disabilities, Office of Mental Health, Department of Health and Office of Temporary and Disability Assistance.

Funds from the account can be applied to any qualified expense related to an individual’s disability. Such expenses include those related to education, housing, transportation, employment training and support, assistive technology and personal support services, health, financial management, legal fees, funeral and burial expenses and other expenses approve by U.S. Treasury. Those who qualify for a 529 ABLE account will be able to open an account with a participating financial organization, similar to how the college savings program is operated.

An account may be opened by a beneficiary or the beneficiary’s parent or legal guardian. Once enrolled, individuals or families can contribute up to the federal gift-tax exclusion amount which is $14,000 for 2017. With the ABLE accounts, the first $100,000 saved is not treated as a personal asset which means the savings will not affect the qualified beneficiary’s eligibility for government-funded assistance. Specifically, the funds in the ABLE account do not count toward the $2,000 cap on assets required to remain eligible for government assistance. Having access to this savings will help those with disabilities achieve a better quality of life. It will provide more independence for those with disabilities because they can save and pay for expenses which invariably arise without having to be concerned with losing Medicaid coverage or Social Security Supplemental Income. For parents who have a child with a disability, saving for that child's future care will enable them to rest easy knowing their child will be cared for during adulthood.

To learn more, visit the State Comptroller’s site at https://www.osc.state.ny.us/savings/able.htm or call 1-855-5NY-ABLE (1.855.569.2253). If you have any questions or comments on this or any other state issue, or if you would like to be added to my mailing list or receive my newsletter, please contact my office. My office can be reached by mail at 200 North Second Street, Fulton, New York 13069, by e-mail at barclaw@nyassembly.gov or by calling (315) 598-5185.