The ABLE Act What it means for You and Your Family Achieve with us.

Background on ABLE The Achieving a Better Life Experience (ABLE) Act Achieve with us.

PA ABLE Accounts Pennsylvania signed ABLE legislation into law on April 18, 2016. Achieve with us.

Brief overview of ABLE accounts in PA This PowerPoint is a brief overview of PA ABLE accounts It does not take the place of contacting Dept. of Treasury for specific eligibility, tax exemptions and benefit counseling questions PA Treasury Department http://www.paable.gov/index.html 1-855-529-ABLE (2253) Email info@paable.gov

Do I qualify for an ABLE Account? Questionnaire to determine eligibility on http://www.paable.gov/index.html Individual’s disability must have occurred before age 26 Individual must essentially meet the Social Security definition of disability An individual who is receiving SSI or SSDI and whose disability occurred before age 26 automatically qualifies for an ABLE account Others should check with the Dept. of Treasury

How do I get an ABLE Account? The PA Treasury Department implements and oversees ABLE accounts in PA • website is http://www.paable.gov/index.html • 1-855-529-ABLE (2253) • Email info@paable.gov

What is the cost of opening an ABLE Account? There is no fee to open an account Account can be opened with initial contribution $25 or more Annual account maintenance fee annual fee is $60 taken from accounts quarterly ($15 per quarter). If you select electronic delivery of quarterly statements and account activity confirmations, account maintenance fee reduced to $45 ($11.25 per quarter)

Funds in ABLE Account are invested Similar to other investment funds (retirement, stock portfolios) Individual has choice of investment options (e.g. high, moderate, low risk)

ABLE Account fees There are investment and banking fees Asset-based fees deducted from your return ranging from 0.34% to 0.38% depending on investment option selected Checking account option provided through Fifth Third Bank monthly service fee $2.00, waived with e-delivery of account statements or with average monthly balance of at least $250 Other typical banking charges may apply e.g. fee for out-of-network ATMs

Will opening an ABLE Account hurt my Social Security or Medicaid services? ABLE account does not effect eligibility for Medicaid services or Social Security Disability (SSDI) The first $100,000 not counted against Supplemental Security Income (SSI) More than $100,000, SSI payments will be suspended; when your ABLE account balance falls back to $100,000 or below, your SSI payments would be reinstated

How much can I save in an ABLE account? Individual, families and friends can contribute up to a TOTAL of $14,000 each year (important to direct deposit into account) The account cap is $511,758 Once limit is reached, no additional contributions can be made while interest can still be earned

What can I spend my ABLE account on? Qualified Disability Expenses (are not taxed) http://www.paable.gov/faqs/#expenses Education Housing Transportation Employment Training/Support Assistive Technology/Personal Support Services Health Prevention/Wellness Financial Management/Administrative Legal Fees Expenses For Oversight/Monitoring Funeral/Burial Expenses

Documenting Qualified Disability Expenses Dept. of Treasury will not require documentation of how your ABLE account is used However, for tax purposes it is important that you keep records You may owe taxes on the earnings portion of the Non-Qualified Expense withdrawals Important to keep track of all Qualified Disability Expenses, if IRS audits your taxes, you may documentation of your Qualified Disability Expenses

Non-Qualified Disability Expenses Non-Qualified Disability Expenses are taxed The growth portion of any Non-Qualified Withdrawal is subject to federal/state income tax and additional 10% federal tax charged Taxes are on growth portion only not entire withdrawal Non-Qualified Withdrawal might impact your SSI or other federal and state needs-based benefits

How can I make withdrawals from my ABLE account? You will be able to make withdrawals anytime: online by phone Using Fifth Third Bank debit card or checks (if applicable) or with a Withdrawal Request form

What happens to the account when the person passes away? Account can be used for outstanding Qualified Disability Expenses incl. funeral and burial expenses Under proposed Internal Revenue Service (IRS) regulations, when Beneficiary dies, the ABLE account becomes part of Beneficiary’s estate States asked IRS to consider other options (PA law allows transfer to sibling, if eligible) When assets transfer to estate, any growth on contributions will be subject to income tax

Is there a Medical Assistance/Medicaid payback? Federal law allows states to file claims for Medical Assistance (Medicaid) provided during the time the beneficiary had an ABLE account In PA, DHS may seek repayment from the estate See Dept. of Treasury for conditions

Earnings are not taxed while growing in the account Tax Benefits Earnings are not taxed while growing in the account Earnings are not taxed when withdrawn and used for “qualified disability expenses”

Work/ABLE/SSI Work income is treated as income for some government benefits, including Supplemental Security Income (SSI), even if it is directly deposited into an ABLE account, and, therefore, may affect eligibility for those benefits.

Work/ABLE/SSI Resources for benefit counseling: People who use Social Security and Medicaid have to pay attention to income from work Resources for benefit counseling: AHEDD Disability Rights of Pennsylvania Goodwill

ABLE Accounts and Special Needs Trusts Special Needs Trust: holds money of parents/grandparents, for the benefit of a person with a disability Achieve with us.

ABLE Accounts and Special Needs Trusts Special Needs Trusts can be first-party or third-party; individual or pooled Achieve with us.

ABLE Accounts and Special Needs Trusts An individual trust is usually opened with help from a lawyer and managed by one or multiple trustees Achieve with us.

ABLE Accounts and Special Needs Trusts A pooled trust is managed by a non-profit organization Achieve with us.

ABLE Accounts and Special Needs Trusts Special needs trust are good for: People who have a large sum of money (like an inheritance) that needs to be deposited People who want someone else to navigate spending money People who are not as concerned with how much a special needs trust costs to open Achieve with us.

ABLE Accounts and Special Needs Trusts ABLE Accounts are the only account that does not tax earnings Achieve with us.

ABLE Accounts and Special Needs Trusts ABLE accounts are good for: People who want to save money they make from working People who want more control of their money People looking for a less expensive option than a special needs trust Achieve with us.

The Arc of Pennsylvania QUESTIONS? Maureen Cronin Executive Director The Arc of Pennsylvania mcronin@thearcpa.org 717-234-2621 Achieve with us.