 Internal Revenue Service IRS Tax News Able accounts can help people with disabilities pay for disability related expenses but first, an attempt at a joke, I apologize in advance. The idea that we're saving the world from global warming Thanks for saving the world! by stifling the production of American energy forcing us to beg for oil from untrustworthy and unenvironmentally friendly places And beg me Clark, beg me! Making our global warming efforts futile is something that But it's futile, these lightweights aren't for- really makes my blood boil and my nose hairs stand on end Including nose hair That's when you know I'm really pissed off when my blood's boiling and my nose hairs are on end When this guy sneezes he looks like a party favor It's kind of like with dogs who have their back hairs stand on end except I don't have any back hair so my nose hairs stand on end which is a huge evolutionary advantage It's an evolutionary advantage because when things get difficult it makes us look tough I like it, makes you look tough IRS Tax Tip 2022-112 July 25th 2022 people with disabilities can use and achieving a better life experience or ABLE A-B-L-E account there's a link to that here to help pay qualified disability related expenses This tax advantage savings account doesn't affect their eligibility for government assistance programs so obviously whenever we're thinking about different kinds of benefits programs some of those benefit programs are going to be dependent upon say income level for example so we always have to be careful and think about okay what's going to be the impact of this benefit program possibly on another benefit programs qualifications related to income levels and so on and so forth so in any case once again this tax advantage savings account doesn't affect their eligibility for government assistance programs here are some key things people should know about these accounts annual contributions limits the 2022 limit is $16,000 certain employed ABLE account beneficiaries may make an additional contribution up to the lesser of these amounts the designated beneficiaries compensation for the tax year the poverty line for a one person household for 2022 this amount is $12,880 in the Continental US $16,090 in Alaska and $14,820 in Hawaii savers credit ABLE account designated beneficiaries may be able to claim the savers credit there's a link to that here for percentage of their contributions the beneficiary claims the credit on form 8800 credit for qualified retirement saving contributions there's a link to that here the savers 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 transforms transfers from section 529 plans families may roll over funds from a 529 plan to another family member's ABLE account the ABLE account must be for the same beneficiary as the 529 account or for a member of the same family as the 529 account holder rollovers from a section 529 plan count toward the annual contribution limit for example the 16,000 annual contribution limit would be met by parents contributing 10,000 to their child's ABLE account and rolling over 6,000 from a 529 plan to the same ABLE account qualify disability expenses states can offer ABLE accounts to help people who become disabled before age 26 or their families pay for disability related expenses these expenses include housing, education, transportation, health, prevention and wellness employment training and support assistive technology and personal support services though contributions aren't deductible for federal tax purposes distributions including earnings are tax-free to the beneficiary if they are used to pay qualified disability expenses more information can be found below at the links you got the ABLE accounts tax benefits for people with disabilities publication 907 tax highlights for person with disabilities form 1099 QA distributions from ABLE account form 5498 QA ABLE account contribution information instructions for form 1099 QA and 5498 QA there's links to all that stuff here and there'll be a link to this in the description