The amount of money that people with disabilities can deposit in their ABLE accounts each year without jeopardizing eligibility for government benefits is about to increase.

IRS

The Internal Revenue Service said that the federal gift tax exclusion will climb from $14,000 to $15,000 in 2018 thanks to inflation. Since the annual deposit limit on ABLE accounts is directly tied to that benchmark, that cap will grow to $15,000 as well.


“Tying these sections together was done by design, so that periodic increases to the federal gift tax exclusion will automatically result in a greater annual contribution limit to ABLE accounts,” said Michael Morris of the National Disability Institute.


Money saved in ABLE accounts can be used to pay for qualified disability expenses including education, health care, transportation and housing. Interest earned is tax-free.


Individuals with disabilities that onset before the age of 26 can create an account through any state’s program no matter where they live.


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