The Tax Cuts and Jobs Act made several changes to ABLE accounts. ABLE accounts are authorized tax-advantaged accounts to help disabled people pay for qualified disability-related expenses.
Here are changes that will affect people who have an ABLE account:
Annual Contribution limit increase
The limit for 2018 is $15,000
Certain employed ABLE account beneficiaries may make an additional contribution up to the lesser of the following:
*The designated beneficiary’s compensation for the tax year
* The poverty line for a one-person household. For 2018, this amount is $12,140 in the continental U.S., $13,960 in Hawaii and $15,180 in Alaska
ABLE designated beneficiaries may now be eligible to claim the Saver's Credit for a percentage of their contributions.
The credit is claimed on Form 8880, Credit for Qualified Retirement Savings Contributions. The Saver’s Credit is a non-refundable credit available to individuals who meet these three requirements:
* Are at least 18 years old at the close of the taxable year
* Are not a dependent or a full-time student
* Meet the income requirements
Rollovers and transfers from section 529 plans