On April 11, Governor Phil Bryant signed into law S.B. 2311 creating the Mississippi Achieving a Better Life Experience (ABLE) Act. Pictured in the photo to the right are: Rep. Cory Wilson, a sponsor of the ABLE legislation in the House; Governor Phil Bryant; State Treasurer Lynn Fitch; and Richard Courtney, a member of the ABLE Act Task Force.
In December 2014, President Barack Obama signed the federal ABLE Act into law. This Act is codified as Section 529A of the Internal Revenue Code. It permits states to establish personal savings accounts for persons with disabilities that will not be considered countable resources for Medicaid and SSI eligibility. SSI, or Supplemental Security Income, is the Social Security program that provides a monthly payment of up to $735 to disabled persons or persons over age 65 whose income is less than that amount and whose countable resources (assets) do not exceed $2,000.
The disabled individual (or the guardian or conservator for an incapacitated beneficiary) has ownership and control over the distributions from an ABLE account. Payments from the account for what are defined as “qualified disability expenses” will not be taxable income; however, payments for things other than the qualified expenses will be subject to income tax and a 10% tax penalty. Qualified disability expenses are defined as: “education, housing, transportation, employment training and support, assistive technology and personal support services, health, prevention and wellness, financial management and administrative services, legal fees, expenses for oversight and monitoring, funeral and burial expenses”.
An individual may have only one ABLE account, and it may be created and/or funded by anyone. A person who contributes to an ABLE account may deduct that contribution from their Mississippi income tax. The maximum that can be contributed to any ABLE account is $14,000 per year (subject to future increases by Congress).
Under the new Mississippi ABLE Act, an implementation plan is to be developed by October 1, 2017, and accounts are to be available to residents by July 1, 2018. Currently, Mississippi residents may open ABLE accounts in another state’s plan, and we can provide help and advice about this. The ABLE Act provides a new tool for financial independence for persons with disabilities, and we are glad to have been a part of the process.
Contact Us for more information and concerns on Mississippi ABLE Act. Call us at 601-987-3000.