Tax Reform What is an Able Account? (Contributions & Rules Explained) Read the Article Open Share Drawer Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Pinterest (Opens in new window)Click to print (Opens in new window) Written by TurboTaxBlogTeam Published May 6, 2019 - [Updated Nov 17, 2020] 2 min read If you are disabled, and your disability occurred before you were 26 years old, you may be familiar with ABLE accounts that have been around since 2014. ABLE accounts allow people with disabilities and their families to save up to $15,000 for 2018 to use for disability-related expenses. These type of accounts can be a lifesaver. Many Federal and State programs, such as Supplemental Security Income (SSI) or Medicaid, disallow other kinds of savings accounts in excess of $2,000. Having an ABLE account would not jeopardize the eligibility of an individual or family to receive mandated benefits. Setting up an ABLE account for yourself or someone else can be done with a number of financial institutions. ABLE accounts work very much like 529 savings plans, meaning, the funds you contribute are not tax deductible, but the earnings on those funds are not taxed if used to pay for qualified disability expenses. However, an individual can be the beneficiary for only one ABLE account at a time, so you can’t open multiple accounts and make $15,000 contributions to each of them. Some significant changes have been made to the ABLE plan under tax reform. Here are a few key points: First, for 2018, up to $15,000 a year can be rolled from a family member’s 529 plan or disabled beneficiary’s 529 plan into an ABLE account. Rollovers from the previous plan count toward the annual $15,000 limit of the ABLE plan. Previously, funds in a 529 plan had to be used for education, but the new law recognizes that some disabled individuals may not be able to attend college or want to go. Another change is that 529 plan funds can be used to pay for private K through 12 education up to $10,000. Prior to the new legislation, plan funds could be used only for higher level continuing education. Next, a disabled person can contribute employment earnings to their Able account up to $12,140 in the U.S. and $13,960 in Hawaii, in addition to up to $15,000 contributed from other sources (including your family, friends, and benefits), if the disabled employee is not covered by a retirement plan funded in whole or in part by employer contributions. Lastly, you may be able to contribute up to $2,000 of contributions to an ABLE account and qualify for the Saver’s Credit up to $1,000 if your single, which can offset federal income taxes you could possibly owe overall. Don’t worry about knowing these tax laws. TurboTax will ask simple questions about you and give you the tax deductions and credits you are eligible for. If you have questions, you can connect live via one-way video to a TurboTax Live CPA or Enrolled Agent with an average of 15 years experience to get your tax questions answered. TurboTax Live CPAs or Enrolled Agents are available in English and Spanish and can also review, sign, and file your taxes. Previous Post TurboTax IRS 1040 Form and Schedules Interactive Tool Next Post Tax Reform 101: 5 Things To Do Now Written by TurboTaxBlogTeam More from TurboTaxBlogTeam Leave a ReplyCancel reply Browse Related Articles Tax News Intuit TurboTax April Report: A Look at Refunds and S… Tax Planning April 15 is the Tax Deadline: 6 Things You Need to Know… Tax Planning Unable to Pay Your Tax Bill? Here’s What To Do Tax Tips Tax Credits 101: What They Are & How They Work Business How to Know if You Should Invest in Business Insurance Tax Deductions and Credits What Is the Standard Tax Deduction for 2023 – 202… 401K, IRA, Stocks Should You Use Your 401(k) or Retirement to Pay Off Deb… Tax Planning What Happens If You Don’t Pay Taxes? Understanding Pe… Tax Deductions and Credits Family Taxes: Take Advantage of Tax Savings Taxes 101 How Much Do You Have to Make to File Taxes? Demystifyin…