For those with disabilities, a Maryland ABLE account provides tax advantages and does not violate the income restrictions of government aid like Supplemental Social Security (SSI). It affords many of the same protections of a special needs trust. The Stephen Beck Jr. Achieving a Better Life Experience (ABLE) Act and was signed into law by President Obama in 2014.
To be eligible for a Maryland ABLE account, you must have a disability, the onset of which occurred prior to turning twenty-six years of age. Friends and family can deposit up to $15,000 per year into the account and the account owner can use the money for qualified disability expenses such as basic living expenses, healthcare, transportation and education. The owner may save up to $100,000 before SSI will be impacted.
The account’s growth is tax-free and contributions could qualify for an income deduction on your Maryland state taxes. You may also choose one of three investment portfolios based on risk tolerance from conservative to aggressive growth plans.
These accounts are not always the best fit for every situation and sometimes the disabled individual is better served by a special needs trust. To determine what works best for your situation, please set up a consultation with Stouffer Legal at 443-470-3599 in the Greater Baltimore area.