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MO ABLE Accounts
- 1. moable.com
- 2. What is ABLE? Creates tax-advantaged investment accounts for individuals with disabilities Assets in your account do not affect eligibility for federal means-tested benefits programs like SSI or Medicaid Hybrid of 529 college savings account + checking account + Special Needs Trust
- 3. Benefits of MO ABLE Provides financial independence for people with disabilities Account is owned by the individual with the disability Dramatically increases ability to save Before ABLE , individuals could only save around $2,000 of their own money before risking loss of health care and other benefits Tax free earnings – federal and state
- 4. Missouri’s Tax Deduction Missouri has the highest tax deductions in the nation Anyone who contributes to an account can receive a state income tax deduction for their own contributions of up to $8,000 ($16,000 if filing jointly). $- $4,000 $8,000 $12,000 $16,000 State Tax Deductions Single Jointly
- 5. Who Can Use MO ABLE? Eligibility Quiz at moable.com Individuals with disabilities that occurred prior to age 26 Must also have a disability.
- 6. Enrollment Online Enrollment Takes approx. 15 minutes $50.00 minimum deposit to open account Can be done by individual with disability (“Beneficiary”) or an Authorized Legal Representative (ALR) ALR = parent, guardian, power of attorney
- 7. Funding Your Account Contributions $15,000 annual limit $462,000 lifetime limit Anyone can contribute to an ABLE account Gifting Create an eGift Event (birthday, holiday, etc.) ~ system will send out an email to friends and family System tracks contributors for sending thank-you notes/replies
- 8. How Can You Spend MO ABLE funds? Withdrawals must be used on “Qualified Disability Expenses” Anything that (1) relates to your disability and (2) helps to maintain or improve your health, independence, or quality of life
- 9. Loadable debit card Does not pull from account Online spending records + notate expenses Protection – limiting of merchants, no cash access, no overdraft
- 10. Account Cost Monthly Maintenance Fees $3.50 ($42.00 Annually) Annual Asset-based Fees Between 0.19% and 0.33% The Lowest Cost Plan in the Nation!
- 11. How is MO ABLE doing? Hundreds of families are using MO ABLE to financially empower those with disabilities MO ABLE has one of the highest enrollments in the nation, even though it is only open to MO residents Missouri has 2 percent of the nation’s population, yet currently MO ABLE has 4 percent of ABLE accounts nationwide.
- 12. Find us on Twitter: @MissouriABLE Find us on Facebook: @MOABLE Go on Twitter now and Retweet our Pinned Tweet to promote the MO ABLE program! Spread the Message
- 13. Helpful Resources Customer Service team@stableaccount.com 1-800-439-1653 Mon-Fri 9a-6p EST moable.com
Editor's Notes
- ABLE Accounts are a “game changer” for people with disabilities Previous rules have kept people with disabilities impoverished and, subsequently, unable to invest This is perhaps the biggest advancement for people with disabilities since ADA (passed in 1990… 27 years ago)
- B4: ABLE Accounts are structurally like 529 accounts, in terms of tax advantages, online use, and investment options, but they have the transactional capabilities of a checking account, and the benefits protections of a Special Needs Trust.
- Eligibility Quiz is a quick series of Yes or No questions that will tell you if you are eligible to open an account. Age 26 cut-off: This means that the disability had to have begun before age 26. You do not have to have been formally diagnosed before age 26. You also do not have to open the account before age 26. You could have someone who developed a mental illness at 25, was not diagnosed until 30, and did not open their STABLE Account until 35. Age 26 cut-off was set by Congress due to the score of the ABLE Act. It is an arbitrary age that was set to keep the “cost” of the bill (in terms of lost tax revenue, since this allows tax-free savings) below $2B. SSI = The Supplemental Security Income (SSI) program pays benefits to disabled adults and children who have limited income and resources. SSI benefits also are payable to people 65 and older without disabilities who meet the financial limits. SSDI = Social Security Disability Insurance (SSDI) pays benefits to you and certain members of your family if you are "insured," meaning that you worked long enough and paid Social Security taxes. The “1 Account” limit is a national limit (a beneficiary cannot have an account in MO plus an account in Michigan, nor can you have 2 accounts in MO) Paths to eligibility: #1-2 means that there is some definitive determination from the federal government that you have disability that qualifies. If you don’t fall into that category, it’s OK! You do not have to be receiving SSI or SSDI benefits to be eligible for a STABLE Account. You can still “Self-Certify” that you have a disability. The List of Compassionate Allowances Conditions is a list of types of terminal illnesses and other conditions (i.e. cancers, etc.). (Google it to view.)
- B1: Even though it is offered online, a paper copy of the enrollment form can be requested, however, there is a $50.00 processing fee and all fund management (withdrawals, changing investment options, etc.) can only be done electronically (online) B2: A YouTube video has been created with a resident in California with CP enrolling in 19 minutes using only 1 finger to type. However, even if they do need to stop the application process to get more information or clarification the STABLE Account Plan system will save where they are in the process so they do not have to start over. They just use the same login and password they created when starting the application. The login and password are what they will also use to maintain the account. B4: ALR – cannot be Representative Payees or Trustees of a Special Needs Trust, unless those people are also parent, guardian or power of attorney. [Representative Payees are SSA representatives whose job it is to accept and spend SSI monies for folks who cannot manage their own finances. See https://www.ssa.gov/payee/ for more info.] Rep payees often express frustration that the IRS regulations do not allow them to be an ALR for a STABLE Account. This rule may change when the IRS issues final regulations, but it is currently the law. This is NOT a our own internal STABLE policy, it is federal law, so we cannot change it. Families can call IRS contact Taina Edlund 202-317-4818 if they would like to comment on the regulations.
- $14,000 and $426,000 are contribution limits, so your balance can grow higher than these numbers. The annual limit is a hard stop - once you’ve put in $14K, you’re done for the year, and cannot contributed any more, even if you spend down your balance to below $14K. Note that the $14K limit is tied to the gift tax limit, so it typically is adjusted every two years. For example, it will likely increase to $15K in 2018. The lifetime limit is a little more flexible. You can hit the limit, spend down, and then replenish with more contributions. For instance, once your balance hits $426,000, you can no longer make any new contributions to the program (although your earnings can continue to accrue). BUT if you spend your balance down to less than $426,000, you can resume making contributions. This is meant to be a lifetime product. Different states have different lifetime limits. A state’s lifetime limit is tied to the state’s 529 college savings plan limit. STABLE Accounts are subject to Ohio’s lifetime limit (one of the highest in the country). This limit also adjusts periodically, so will increase from time to time. MO’s current 529 limit is $325,000, but by partnering with Ohio, Missourians gain the benefit of being subject to Ohio’s higher limit and can actually save more money (up to the $426,000). System rejects excesses – you don’t have to keep track of your own contributions! We do it for you…if you try to contribute too much, we will kick it out. (i.e. if grandma sends in a check for $20,000, we will take $14,000 and apply it to your account and send grandma a refund check for the other $6,000 excess.) Gifting – You upload email addresses for family and friends. The system will generate a email with a special link that allow family/friends direct access to contribute to your account. System also keeps track of who contributed so you can send a thank you message.
- Very broad range of qualified expenses; Most frequent category is basic living expenses (food, gas, groceries, etc.). Second most frequent category after that is at pharmacies. Trust Attorneys (Trustees) appreciate this because the STABLE Account has more broad spending ability than a trust We (the State/the STABLE program) do not make the final determination of whether a particular expense is/is not “Qualified.” The IRS does that. (You will get a LOT of questions along the lines of … “Is XYZ a qualified expense?”) The IRS regulations give us a non-exhaustive list (some of which is included on this slide, but the entirety of which is on our website). If something is not included in that list, all we can do is give our best guess as to how the IRS would answer the question of whether something is a QDE or not. At the end of the day, if the account holder is audited, they will have to explain to the IRS how expense XYZ met the 2-part test outlined on this slide. We do not expect the IRS to be draconian in its determinations – it is not in the business of determining what is necessary or unnecessary for any particular disability, so expect a generous interpretation, but always be prepared to defend your expenses. For example, we are frequently asked if a vacation is a QDE. The best we can answer is that it MAY be considered a QDE, but all expenses are justified using IRS’ standard against the definition provided Specific questions regarding an IRS’ stance on an expense could be directed to the IRS
- The STABLE card is for the spenders Can be used anyplace MasterCard is accepted. Card is free for all account holders to get – but you do have to request it (it’s not automatically sent out). You can request it online during your account enrollment or later on at card.stableaccount.com/enroll Card is also nearly fee-free to use – the only usage fee occurs if you use your PIN number to make a purchase – then there is a 49 cent charge. You can avoid this entirely; if you simply sign for your purchase rather than put in your PIN number, transactions are free! What does “loadable” mean? It’s a prepaid card, similar even to a reloadable gift card. You log in to your STABLE Account, ask for a withdrawal of, say, $100, and then select that you want the $100 loaded onto your STABLE Card. Then when you go to CVS to use the Card, there is only $100 on it to spend. The loadable spending portion helps protect against fraud, and is an added protection for people who may be vulnerable. This way, you don’t have to worry about your loved one having access to all of the funds in the account at once. So if there is $10,000 in your account, there is no danger of your loved one being taken advantage of or accidentally spending all $10,000 at once. If spending vulnerabilities are not a concern for you, then use the card however you want – you can load up to $15,000 onto it at any one time. Online spending records also help in case of audit. You can set up an online account (similar to your regular online banking portals) for your card. It tracks every expense you make, allows you to write personal notes (e.g. “This $10 at CVS was used to purchase a prescription that I use to treat my condition”) on every single transaction line, and allows you to categorize every expense line as either a QDE or a non-QDE. This makes recordkeeping and reporting really easy. You can print off your entire history and hand it over to an auditor or benefits agency if necessary. We wanted it to be loadable because parents and guardians wanted to give their children financial independence, but not too much access (where they could use too much money at once or be open to being taken advantage of, etc.). This is similar to putting a set “allowance” on the card for them and very useful for “money management skill development” The only way you can load money onto the card is from your STABLE Account. This is great for recordkeeping and for accounting to benefits agencies, because they know that the only money on this card is STABLE money. If you are withdrawing money to an external bank account, it’s much harder to track because it sits in the bank account along with other variety of monies. We’ve also limited the types of merchants that you can use the card at, for extra protection. The card will not work at online gambling establishments or adult entertainment establishments. You cannot withdraw cash with the card. We did this intentionally, since cash makes people more vulnerable and makes recordkeeping difficult. Of course, account holders can always request a check withdrawal from their account, or a transfer to an external checking account, if they need cash. You cannot overdraft with this card (no extra fees!!). If there is not enough money on the card to complete a purchase, the card simply will decline. Again, extra protection for PWD.
- A dedicated group of staff exist to simply answer the questions you may have when you leave this presentation and throughout the lifetime of your STABLE Account This contact information is also on our webpage If possible, it is good to offer to stick around after a presentation to answer specific/personal questions people may have about their life situation and how STABLE may work for them