The Georgia Achieving a Better Life Experience (ABLE) Bill would allow people with disabilities to establish tax-free savings accounts to be used for a variety of essential expenses, including education, employment training, medical care, housing and transportation. The accounts would be similar to 529 accounts for college, and are also known as 529A Plans.
In 2014, Congress passed the federal ABLE Act, giving states the ability to create their own programs. Most states have introduced or signed legislation enabling the ABLE Act with Ohio, Florida, Virginia, and Nebraska launching their programs in the next few months. Recent federal legislation eliminated the state residency requirement, which allows individuals setting up ABLE accounts to choose any state program.
Georgia’s version of the ABLE Act allows total annual after-tax contributions of up to $14,000 from family, friends, or the beneficiary himself. The balances of an individual account cannot exceed $235,000. Once an account balance exceeds $100,000, Social Security income benefits are suspended, but Medicaid eligibility remains.
Before ABLE accounts, an individual with disabilities was only allowed personal liquid assets up to $2,000 before losing Medicaid benefits.
Eligibility for an ABLE account is limited to individuals whose disabilities occurred before age 26.
