How can my family save for disability expenses, tax free?
If, before the age of 26, you had an onset of significant disabilities and are currently receiving benefits under SSI and or SDI, then you are eligible to open an ABLE account.
Contributions to the ABLE account can be made by any person with after-tax dollars and are not tax deductible. If the distributions of investment income earned on assets held in the ABLE account are used for “qualified disability expenses” then no taxes will be payable on those expenses. Expenses like education, housing, transportation, employment training, assistive technology, personal support services, health care expenses, financial management and administrative expenses which improve the quality of life of the account holder will be exempt from taxes.
Beneficiaries are only allowed one account with an annual limit on all contributions of $14,000 per year.