$15,000 … or maybe more

The deadline for making a 2018 contribution to someone’s ABLE Account is fast approaching: Monday, December 31, 2018.

In case you don’t already know, an ABLE Account can be a very useful supplement, or in some cases alternative, to a self-settled Medicaid payback trust (a “d4A Trust”). A person who presently meets the definition of Social Security disabled, and also met that definition prior to attaining age 26, is eligible. A person does not have to have been determined disabled by the Social Security Administration; in that case, other documentation can suffice.

The contribution limit to an ABLE Account per calendar year from all sources (both the disabled account beneficiary and all others) is the same as the gift tax annual exclusion amount, currently $15,000.

But the Tax Act in December 2017 changed that, so that the working disabled can contribute more per year … up to $27,060 depending on that person’s income from employment.

Massachusetts ABLE Accounts are administered by Fidelity. You can learn more, or open a Fidelity ABLE Account, here. (Special Needs Law Group of Massachusetts has no financial affiliation with Fidelity.) However, many states have ABLE Accounts that are open to residents of other states. You can learn more about all states’ ABLE Accounts, and compare them, here.


Learn more about Special Needs Law Group of Massachusetts here.

This blog post does not constitute legal or tax advice, even if you are presently a client of Special Needs Law Group of Massachusetts, PC, nor is an attorney-client relationship created by reading it. If you want legal or tax advice, you should retain a licensed attorney or tax advisor for that purpose.