On December 22, 2014, President Obama signed the Achieving a Better Life Experience (ABLE) Act. The law established a new IRS 529A tax code section for ABLE accounts (modeled after Section 529 savings accounts) for individuals that are declared disabled prior to the age of 26. ABLE Act savings accounts create a valuable resource for families seeking to establish funds to protect loved ones with disabilities, without risking disqualification from the federal funding upon which these individuals otherwise depend.
Beginning in 2015, each State had the option to establish their own ABLE programs, under which eligible individuals have the opportunity to save for expenses related to the individual’s disability. Colorado legislators introduced the Colorado ABLE Act during their most recent session and it was signed into law on June 3, 2015 by Governor John Hickenlooper.
In December 2015, the PATH Act (Protecting Americans from Higher Taxes) removed the requirement that an individual could only open an ABLE account in the state where they reside. However, there are no states that currently have an active ABLE program.
There are other federal regulatory decisions that states have been waiting for until they can fully develop their own programs. In December 2015, the Social Security Administration released a new Program Operations Manual System (POMS) section governing the agency’s treatment of ABLE accounts for Supplemental Security Income (SSI) beneficiaries. However, the Internal Revenue Service has not issued final regulations regarding ABLE accounts.
The Colorado ABLE program is currently under development with a goal of opening for enrollments in 2017. Check this website periodically for more updates.