Mississippi ABLE Program Brings Independence

Mississippians with disabilities can now save money through the Mississippi ABLE Program without the fear of losing their public benefits.

In December of 2014, the United States Congress passed the Stephen Beck, Jr. Achieving a Better Life Experience (ABLE) Act which added Section 529A to the federal tax code. This enables eligible individuals with disabilities to save money in tax-advantaged accounts that may be used for qualified disability expenses while keeping their eligibility for federal public benefits.

On April 11, 2017, the Mississippi Legislature passed SB 2311, establishing Mississippi’s ABLE Act. The members of the Mississippi ABLE Board were appointed by Governor Phil Bryant and held their first meeting on May 8th, 2018. After much research and consideration, the Mississippi ABLE Board voted in October 2018 to join with the National ABLE Alliance.

“As the state agency dedicated to helping Mississippians with Disabilities, we are perfectly equipped and extremely honored to be working with the state’s ABLE Board to implement ABLE in our state,” said Chris Howard, executive director for the Mississippi Department of Rehabilitation Services and Vice-Chairman of the Mississippi ABLE Board. “We truly believe this program will help in providing financial freedom to so many we serve.”

Many individuals with disabilities and their families depend on public benefits. To be eligible for public benefits, you must not have savings of more than $2,000 (SSI) or $4,000 (Medicaid). The effort for ABLE accounts originated with a group of parents of children with disabilities who recognized the unfairness of not being able to save funds in their child’s name for fear of losing essential benefits that allow their child to live independently in the community.

“ABLE is a ground-breaking program for individuals with disabilities,” said Rick Courtney, chairman of the Mississippi ABLE Board. “Those who receive benefits have always been told that they couldn’t save money without jeopardizing their benefits. ABLE changes the rules. This is really significant n so many levels, but especially for capable adults with disabilities and parents of children with disabilities who want to save for their children’s future like other parents.”

An ABLE account is much easier and less expensive than establishing a special needs trust and is easier to maintain. A qualified ABLE account holder may also be the beneficiary of a special needs trust.

ABLE accounts are tax-advantaged savings accounts for individuals with disabilities. Income earned in the account is not taxed if spent on qualified disability-related expenses. Contributions can be made to an account by anyone and may qualify for a state tax deduction. The account can be used for daily transactions, as well as for long-term savings.

“ABLE Accounts are all about independence,” said Lynn Fitch, Mississippi State Treasurer and ABLE Board Member. “They promote saving for a life of independence that many people with disabilities and their families can’t afford. And that is good, not only for Mississippians with disabilities but, for all of Mississippi.”

An ABLE account may be opened by the disabled beneficiary who meets the eligibility requirements or by another person, including the guardian or conservator for the individual with a disability. For further details on eligibility, please see the applicable federal law.

The maximum yearly limit for contributions to an ABLE account is the annual gift tax exemption amount ($15,000 in 2019). An individual who is working may contribute an additional amount not exceeding their income or the federal poverty level, whichever is less. The maximum balance for an ABLE account is $235,000. Once an account goes over $100,000, SSI benefits will be suspended. Other benefits are not affected by any account total.

To qualify for the ABLE program, an individual must have acquired their disability before reaching the age of 26.  Contributions can be made to the account by anyone and may qualify for a state income tax deduction.  Income earned in the accounts is not taxed if spent on qualified disability-related expenses.  The accounts can be used for daily transactions or long-term savings.

The Mississippi ABLE Program is administered by the Mississippi Department of Rehabilitation Services.

To sign up or to find out more, visit www.mississippiable.com or call 888-609-3469.