In our earlier blog post, ABLE Accounts: What You Need to Know, we discussed what an ABLE Account is, who can contribute and some of the many benefits it can provide. Starting in the 2018 tax year, the Internal Revenue Service has increased the total annual contribution per ABLE Account from $14,000 to $15,000. By design, the ABLE Act ties directly to Section 2503 of the federal tax code to automatically adjust when there is a modification to the annual gift exclusion amount.
As a brief recap, only one ABLE account is permitted per designated beneficiary and any person, including the designated beneficiary may contribute to the account. Contributions to an account still need to be made in cash and distributions must be made for qualified disability expenses. If you have questions about setting up an ABLE account please contact us today.