Keep reading to learn the what, who, and how of ABLE accounts, as well as Wisconsin-specific guidelines.
WHAT are ABLE accounts?
ABLE accounts are tax-advantaged savings account like college or health savings accounts. People with disabilities and their families can use them to maintain the beneficiaries’ eligibility for SSI, Medicaid, and other public benefits while saving for the extra and significant costs of living with a disability.
Money saved in an ABLE account can be used to fund basic living expenses related to the account-holder’s disability, such as:
- Personal support services
- Assistive technology
- Education
- Housing
- Transportation
- Employment and training support
- Health care expenses
WHO can open an ABLE account?
Eligible people who were diagnosed with a disability prior to age 26 can open an ABLE account. An account can be opened at any age.
To be eligible, a person with a disability:
- must be receiving SSI or SSDI; or
- meet the Social Security definition and criteria regarding significant functional limitations and receive a letter of certification from a licensed physician.
HOW do I open an ABLE account?
You can open an ABLE account online through state ABLE websites. Currently, Wisconsin doesn’t have its own ABLE program, but Wisconsin residents can participate in any state that accepts outside residents into their program.
When deciding to open an ABLE account, consider:
- Accessibility of the funds, investment strategies, and fees. You may wish to consult a financial advisor, but enrollment is simple and can be done online with a small initial investment.
- ABLE funds act as an addition to a Trust fund, not a replacement. It can provide more choices for disbursements and the cost to set up is less.
Visit the ABLE National Resource Center to gain valuable information and tools to help you make decisions about opening an ABLE account, including information about ABLE programs in each state.
Wisconsin GUIDELINES for ABLE Accounts
Although Wisconsin doesn’t offer an ABLE program, it does offer tax advantages to ABLE account holders and their contributors. Remember, anyone can contribute to a person’s ABLE account, including the person with a disability, friends, family, and employers.
- If the account holder is unemployed, a maximum of $18,000 (2024) may be made by all contributors. This is the federal gift tax exclusion amount, a Federal limit that is required of all states and does not include additional ABLE to Work contributions.
- If employed, an additional $14,580 (2024) in Able to Work contributions may be made. This is allowed only if no contributions have been made to a defined contribution plan, annuity contract, or deferred compensation plan.
- Wisconsin allows a state income tax deduction for contributions to ABLE accounts opened in other states.
- The cumulative limit for an ABLE account is set by each state’s ABLE program; Wisconsin residents must adhere to the asset limit of the state program in which they open an account.
To get answers to frequently asked questions about ABLE accounts for Wisconsin residents, visit:
