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Reporting Income for Achieving a Better Life Experience Act (ABLE) Accounts

1/20/2017 11:51:39 AM

To comply with state law, the state of Minnesota will establish Achieving a Better Life Experience Act (ABLE) accounts in 2017. ABLE accounts are tax-free savings accounts for people with disabilities that can be used for certain qualified expenses, such as education, housing and transportation. A person’s ABLE account is excluded from income and assets when determining eligibility for federal and state programs, such as Medical Assistance, the Supplemental Security Income (SSI) program, the Supplemental Nutrition Assistance Program (SNAP), the Minnesota Family Investment Program (MFIP), and others.

Michigan, Ohio, Tennessee and Nebraska have already established ABLE accounts that are being offered nationally. Minnesotans who meet the requirements to establish an ABLE account can establish one in any one of those states or in Minnesota (when the accounts become available here).

Regardless of where an ABLE account was opened, treat the account and deposits to the account as follows for Minnesota Health Care Programs (MHCP):

  • Do not exclude income because it is directly deposited into an ABLE account when determining MHCP eligibility. Follow applicable MHCP policies regarding treatment of the income.
  • Do not count deposits into an ABLE account by a third party as income to the ABLE account beneficiary.
  • Do not count an ABLE account as an asset when an enrollee is subject to an asset limit.
  • Do not count money withdrawn from an ABLE account as income.
  • Do not count money withdrawn from an ABLE account as an asset as long as the money is used for a qualified disability expense (QDE).

Qualified Health Plan (QHP), Qualified Dental Plan (QDP), advanced premium tax credit (APTC) and cost sharing reductions (CSR) policy regarding ABLE Accounts:

  • Projected annual income (PAI) includes taxable income the taxpayer expects to report on their federal tax return. Applicants who are beneficiaries of an ABLE account should report as PAI the taxable portion of any distribution that is not used for a qualified disability expense (QDE).


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