{"id":50719,"date":"2022-07-25T14:06:59","date_gmt":"2022-07-25T21:06:59","guid":{"rendered":"https:\/\/lapost.us\/?p=50719"},"modified":"2022-07-25T14:06:59","modified_gmt":"2022-07-25T21:06:59","slug":"able-accounts-can-help-people-with-disabilities-pay-for-disability-related-expenses","status":"publish","type":"post","link":"https:\/\/lapost.us\/?p=50719","title":{"rendered":"ABLE accounts can help people with disabilities pay for disability-related expenses"},"content":{"rendered":"<p>Tax Tip 2022-112<br \/>\nJuly 25, 2022<\/p>\n<p>&nbsp;<\/p>\n<p>People with disabilities can use an <a href=\"https:\/\/www.irs.gov\/government-entities\/federal-state-local-governments\/able-accounts-tax-benefit-for-people-with-disabilities\">Achieving a Better Life Experience or ABLE account<\/a>\u00a0to help pay qualified disability-related expenses. This tax-advantaged savings account doesn\u2019t affect their eligibility for government assistance programs.<\/p>\n<p>&nbsp;<\/p>\n<p>Here are some key things people should know about these accounts.<\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>Annual contribution limit<\/strong><\/p>\n<ul>\n<li>The 2022 limit is $16,000.<\/li>\n<li>Certain employed ABLE account beneficiaries may make an additional contribution up to the lesser of these amounts:\n<ul>\n<li>The designated beneficiary&#8217;s compensation for the tax year.<\/li>\n<li>The poverty line for a one-person household. For 2022, this amount is $12,880 in the continental U.S., $16,090 in Alaska and $14,820 in Hawaii.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>Saver&#8217;s credit<\/strong><\/p>\n<ul>\n<li>ABLE account designated beneficiaries may be eligible to claim the\u00a0<a href=\"https:\/\/www.irs.gov\/retirement-plans\/plan-participant-employee\/retirement-savings-contributions-savers-credit\">saver&#8217;s credit<\/a>for a percentage of their contributions.<\/li>\n<li>The beneficiary claims the credit on\u00a0<a href=\"https:\/\/www.irs.gov\/pub\/irs-pdf\/f8880.pdf\">Form 8880, Credit for Qualified Retirement Savings Contributions<\/a>. The saver&#8217;s credit is a non-refundable credit available to individuals who meet these three requirements:\n<ul>\n<li>Are at least 18 years old at the close of the taxable year<\/li>\n<li>Are not a dependent or a full-time student<\/li>\n<li>Meet the income requirements<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>Rollovers and transfers from section 529 plans<\/strong><\/p>\n<ul>\n<li>Families may roll over funds from a 529 plan to another family member&#8217;s ABLE account.<\/li>\n<li>The ABLE account must be for the same beneficiary as the 529 account or for a member of the same family as the 529 account holder. Rollovers from a section 529 plan count toward the annual contribution limit.\u00a0For example, the $16,000 annual contribution limit would be met by parents contributing $10,000 to their child&#8217;s ABLE account and rolling over $6,000 from a 529 plan to the same ABLE account.<\/li>\n<\/ul>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>Qualified disability expenses<\/strong><\/p>\n<ul>\n<li>States can offer ABLE accounts to help people who become disabled before age 26 or their families pay for disability-related expenses. These expenses include housing, education, transportation, health, prevention and wellness, employment training and support, assistive technology and personal support services.<\/li>\n<li>Though contributions aren&#8217;t deductible for federal tax purposes, distributions, including earnings, are tax-free to the beneficiary, if they are used to pay qualified disability expenses.<\/li>\n<\/ul>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>More Information:<\/strong><\/p>\n<p><a href=\"https:\/\/www.irs.gov\/government-entities\/federal-state-local-governments\/able-accounts-tax-benefit-for-people-with-disabilities\">ABLE Accounts &#8211; Tax Benefit for People with Disabilities<\/a><\/p>\n<p><a href=\"https:\/\/www.irs.gov\/forms-pubs\/about-publication-907\">Publication 907, Tax Highlights for Persons with Disabilities<\/a><\/p>\n<p><a href=\"https:\/\/www.irs.gov\/pub\/irs-pdf\/f1099qa.pdf\">Form 1099-QA, Distributions from ABLE Accounts\u00a0<\/a><\/p>\n<p><a href=\"https:\/\/www.irs.gov\/pub\/irs-pdf\/f5498qa.pdf\">Form 5498-QA, ABLE Account Contribution Information<\/a><\/p>\n<p><a href=\"https:\/\/www.irs.gov\/pub\/irs-pdf\/i1099qa.pdf\">Instructions for Forms 1099-QA and 5498-QA\u00a0<\/a><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Tax Tip 2022-112 July 25, 2022&#46;&#46;&#46;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-50719","post","type-post","status-publish","format-standard","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/lapost.us\/index.php?rest_route=\/wp\/v2\/posts\/50719","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lapost.us\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lapost.us\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lapost.us\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/lapost.us\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=50719"}],"version-history":[{"count":1,"href":"https:\/\/lapost.us\/index.php?rest_route=\/wp\/v2\/posts\/50719\/revisions"}],"predecessor-version":[{"id":50720,"href":"https:\/\/lapost.us\/index.php?rest_route=\/wp\/v2\/posts\/50719\/revisions\/50720"}],"wp:attachment":[{"href":"https:\/\/lapost.us\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=50719"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lapost.us\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=50719"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lapost.us\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=50719"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}