What is an ABLE account?
An Achieving a Better Life Experience (ABLE) account is a savings account allowing a person with disabilities to save money without jeopardizing his/her Supplemental Security Income (SSI) and Medicaid benefits. An eligible person is an individual who became disabled before his/her 26th birthday. An individual can have only one ABLE account. The owner of the account is the person with a disability, also known as the beneficiary of the assets in the account (cash, mutual fund, or other type of investment).
Who is eligible for a Montana ABLE account?
An individual must meet four requirements to be eligible for a Montana ABLE Account:
- The owner (beneficiary) must have medical documentation of the onset of a disability before the age of 26;
- The disability will last, or has lasted, at least a year;
- The owner/beneficiary lives in the state of Montana; and
- One of the following must exist for the owner/beneficiary with a disability:
- eligible for Supplemental Security Income (SSI) because of a disability;
- experiencing blindness as determined by the Social Security Administration; or
- can produce a signed diagnosis form (if requested) by a licensed physician reflecting the onset of a disability prior to age 26.
Proof of eligibility is not required to open an ABLE account. However, an individual should maintain a record of the diagnosis, benefits verification letter, and any other relevant document about his/her disability, should proof of eligibility be required at a later time.
What types of expenses can be paid from a Montana ABLE account?
Qualified disability expenses not covered by insurance or Medicaid that can be paid from an ABLE account include, but are not limited to:
- Education: Tuition for preschool through post-secondary education, including: higher education expenses, books, supplies, educational materials related to preschool/secondary education, tutor, and special education services.
- Housing: Purchase of a primary residence or an interest in a primary residence, mortgage payments, property taxes, home improvements and modifications, maintenance and repairs, rent, utility charges (heating fuel, gas, electricity, water, sewer, garbage removal), and homeowners and renter’s insurance.
- Transportation: Use of mass transit, the purchase or modification of vehicles, and moving expenses.
- Health and Wellness: Premiums for health insurance; mental health; medical, vision, and dental expenses; rehabilitation services; durable medical equipment; therapy; respite care; long-term services and supports; nutritional management; communication services and devices; and adaptive equipment.
- Financial Management, Administrative Services, and Legal Fees: Funeral and burial expenses, monthly fee for ABLE accounts, and legal fees related to disability.
- Employment Training and Support: Classes, books, and supplies.
- Assistive Technology: Adaptive computers, special wheelchair, and adaptive telephone.
- Personal Support Services: Personal assistance related to a disability and psychosocial counseling.
With a Montana ABLE account, a person with disabilities can save for qualified disability expenses without the loss of eligibility for certain assistance programs, such as SSI and Medicaid.
- The earnings on Montana ABLE account investments grow tax-free and withdrawals are tax-free, if used for qualified disability expenses.
- Montana allows for a reduction in income of up to $3,000 annually for the person with disabilities, his/her spouse, or his/her parents or step parents, who contribute to an ABLE account.
- The annual contribution limit in 2020 for an ABLE account is $15,000, adjusted periodically for inflation.
- Under the federal law, the person with a disability who establishes an ABLE account must have medical documentation by a licensed physician reflecting the onset of a disability prior to age 26.
Visit Montana Able to learn more information.