In June 2018, New Jersey announced the launch of a major new program to help individuals with disabilities become more independent and better thrive in their communities.
With the newly launched NJ ABLE program, individuals with disabilities can save tax-free for eligible expenses such as education, housing and transportation without losing eligibility for Medicaid and other benefits.
ABLE stands for Achieving a Better Life Experience. The tax-free NJ ABLE accounts will not be included as an asset or income when determining an individual’s eligibility for state assistance programs.
The NJ ABLE accounts can be used to pay for expenses incurred as a result of living with a disability. Qualified expenses include, but are not limited to, education, health and wellness, housing, transportation, legal fees, financial management, job training and support, assistive technology and personal support services.
The earnings on NJ ABLE investments are federally tax-deferred and tax-free, if used for qualified disability expenses. This can help savings compound.
The total annual contributions by all participating individuals, including family and friends, for a single tax year is $15,000. The amount may be adjusted periodically to account for inflation. The first $100,000 in ABLE accounts would be exempted from the SSI $2,000 individual resource limit. If and when an ABLE account exceeds $100,000, the beneficiary’s SSI cash benefit would be suspended until such time as the account falls back below $100,000. It is important to note that while the beneficiary’s eligibility for the SSI cash benefit is suspended, this has no effect on their ability to receive or be eligible to receive medical assistance through Medicaid.
Please contact our office should you have any questions on ABLE accounts.