Living with a disability is often associated with significant amounts of extra costs. That’s why individuals and families can now contribute to ABLE accounts — tax-advantaged accounts that can fund disability expenses without impacting means-tested benefits eligibility.
What are ABLE Accounts?
ABLE accounts are tax-advantaged accounts for individuals with disabilities and their families. ABLE Programs were created as a result of the passage of the Stephen Beck Jr. Achieving a Better Life Experience Act of 2014, better known as the ABLE Act. The beneficiary of the account is the account owner, and income earned by the accounts will not be taxed if used to pay for Qualified Expenses. Contributions to the account can be made by any of the following: the account beneficiary, family, friends, Special Needs Trust, or Pooled Trust. Contributions are made using post-tax dollars and are not tax deductible for purposes of federal taxes.
The Maine ABLE program, ABLE ME, is established and maintained by the Maine State Treasurer and administered by Bangor Savings Bank under applicable law.
To learn about ABLE Programs, including rules regarding eligibility, potential tax benefits, SSI/SSDI considerations, Qualified Disability Expenses, and more, click here
How does the ABLE ME Program differ from other ABLE Programs?*
Recently modified IRS regulations regarding how the distribution of ABLE earnings must be handled aligns with the operating processes and systems of investment houses, not banks. As a result the ABLE ME Program cannot include earnings, and instead focuses on benefits such as protection of principal, easy access, and service charge free checking. ABLE ME focuses on a specific advantage of the ABLE act: being able to accumulate resources beyond means-tested benefit limits without jeopardizing eligibility for necessary public benefits. This is accomplished by providing an easy access, transactional, FDIC checking account as the sole account option. Unlike other Programs, ABLE ME:
- Does not offer market-driven investment options
- Is non-interest bearing
- Can only accept rollovers without earnings from another State's 529A Qualified ABLE Program or 529 Qualified Tuition Program
*The ABLE ME Program with Maine ABLE Benefit CheckingSM
is a great option for Mainers who want to minimize risk and fees while still enjoying the advantages of an ABLE Program. Other Qualified ABLE Programs can be reviewed and compared at https://www.ablenrc.org/select-a-state-program/.