NY ABLE Program Helps New Yorkers
New York state has a new savings plan, called the New York Achieving a Better Life Experience (NY ABLE) program, designed to help individuals with disabilities maintain their health, independence and quality of life. The program was modeled after the 529 College Savings Program. NY ABLE accounts are also known as 529A accounts. New York is one of 28 states in the country that offer this type of program.
NY ABLE ProgramThe NY ABLE program allows New Yorkers with disabilities to save money in their own names without risking their means-based benefits. NY ABLE accounts can be opened with a minimum contribution of $25.00. Contributions can be made by eligible individuals, family members or friends, but are not tax-deductible. The annual contribution is capped at $14,000.00 and the maximum account balance is $100,000.00. New York residency is required and only one account per eligible individual is permitted.
How to Open a NY ABLE AccountA NY ABLE Account can be opened by: The eligible individual; a parent or legal guardian of the eligible individual or a person granted power of attorney on behalf of the eligible individual.
Earnings and distributions from NY ABLE accounts are tax free provided the funds are used for qualified disability expenses. These include costs for education, health and wellness, transportation and housing, among other expenses. Users can access funds in several ways, including an optional checking account and debit card. On an annual basis, NY ABLE will report the total amount of the withdrawals to the IRS, as well as the date and amount of each withdrawal to the Social Security Administration. In the event that either entity wants to verify the purpose of the withdrawals, it is recommended that you keep detailed records.
Eligibility RequirementsTo be eligible, an individual must have a disability that was present before age 26. Participants must also be eligible for Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI), be blind, have a significant disability documented by a physician, or have a disability that is included on the Social Security Administration's Compassionate Allowances Conditions list.
It is advisable to consult with an attorney that specializes in estate and special needs planning to determine if a NY ABLE account is best for your situation. You do not want to do anything that could jeopardize your eligibility for the means-based benefits that maintain your health and quality of life.