Des Moines, Iowa – State Treasurer Michael L. Fitzgerald is excited to start the year by sharing several new updates to IAble, Iowa’s Achieving a Better Life Experience (ABLE) plan. “One major update is the annual contribution limit has been raised,” announced Fitzgerald. “Now, account owners and their families can contribute up to $16,000 a year in their IAble account. That’s an additional $1,000!”*
IAble, a program administered by Fitzgerald, provides individuals with disabilities and their support systems a way to save for disability-related expenses while still maintaining their eligibility for federal means-tested programs such as Supplemental Security Income (SSI) and Medicaid. Prior to ABLE plans, resource limits were capped at $2,000 if persons with disabilities wanted to qualify for monthly benefits. Money contributed to an IAble account can be used to pay for assistive technology, support services, basic living expenses, medical bills and more.**
In addition to the increase for the annual contribution limit, there was also an increase to the state tax deduction. “For 2022, Iowa taxpayers who contribute to an IAble account – not just the account owner – can deduct up to $3,522 from their state income taxes,” said Fitzgerald. “When you help someone with a disability save for their version of a better life experience, you also get an added bonus of saving on taxes.”***
Since its launch, the plan has accumulated 1,430 accounts totaling over $12.8 million in assets. “I am proud to administer a plan that helps persons with disabilities and their families save for necessary expenses that help to improve quality of life, health and independence,” added Fitzgerald. “Providing them with tax advantages is just another added perk of IAble.”
*The Federal Annual Contribution Limit is $16,000. However, IAble account owners who earn income may contribute additional funds beyond the annual contribution limit.
**Earnings on non-qualified withdrawals may be subject to federal income tax and a 10% federal penalty tax, as well as applicable state and local income taxes.
***Adjusted annually for inflation. If withdrawals are not qualified, the deductions must be added back by the Account Owner to Iowa taxable income.