The Internal Revenue Service recently issued a notice to people with disabilities who are employed that for the first time they can now deposit extra money into their ABLE accounts without losing Social Security, Medicaid, or other government benefits. Annual contributions to ABLE accounts are currently capped at $15,000 but under new legislation passed in late 2017 individuals with disabilities who are employed may now accrue at least some of their wages as well.
This year, Americans living in the lower 48 states may now deposit an additional $12,140 from their income which means workers with disabilities are allowed to save up to $27,140 in their ABLE account in 2018. Hawaii residents can save an additional $13,390 and Alaska residents can save an additional $15,180, according to the release put out by the IRS this month.
Additionally, the IRS has announced that workers with disabilities and an ABLE account may now qualify for a Saver’s Credit to help reduce their federal tax bill. Formerly known as the Retirement Savings Contributions Credit, the Saver’s Credit gives special tax breaks to low and moderate income taxpayers saving for retirement. The Saver’s Credit can be taken for contributions to a traditional or Roth IRA, a 401(k), SIMPLE IRA, SARSEP, 403(b), 501(c)(18) or governmental 457(b) plan.