The Delaware Achieving a Better Life Experience (ABLE) Act allows individuals with disabilities to save and invest in a 529a account for qualified medical expenses. On December 19, 2014, the ABLE Act was signed into federal law by President Barack Obama. In June of 2015, Delaware’s ABLE Act or “Kayla’s Bill” was signed into Delaware law.Up to $14,000 can be saved per year without endangering benefits from federal means-tested programs.
These plans allow employees to set aside payroll-deducted contributions on a pre or after-tax basis. Pre or after-tax contributions may be invested in fixed and variable accounts under this plan
Who is eligible to be an ABLE account beneficiary?
To be eligible, individuals can provide a “disability certification”, including a physician’s diagnosis, that the individual meets criteria to be further established in regulations (essentially equal to Social Security level of disability), OR meet the following two requirements:
What may funds from an ABLE account be used for?
Distributions from an ABLE account may be made for qualified disability expenses, related to the individual’s disability or blindness and made for his/her benefit, including:
Expenditures for non-qualified expenditures will be penalized (tax and potential SSI penalties).