UPDATE: Congress Passes ABLE Act

Update on the ABLE Act:

From the National Academy of Elder Law Lawyers:

Congress passed the ABLE Act on this week, which creates tax-favored accounts for children and adults whose disability occurred before age 26.

The ABLE Act allows these tax-favored accounts to receive up to the annual gift tax exemption (currently $14,000 per year). Beneficiaries are restricted to one account, but anyone could contribute to their account. Modeled after 529 college savings accounts, ABLE account programs will need to be implemented by the states.

According to the Congressional Budget Office, “assets in an ABLE account and distributions from the account for qualified disability expenses would be disregarded when determining the qualified beneficiary’s eligibility for most federal means-tested benefits. For SSI [Supplemental Security Income], only the first $100,000 in each ABLE account would be disregarded.”

The Senate passed the ABLE Act as part of the Tax Increase Prevention Act of 2014, also known as “tax-extenders,” a bill that includes a variety of extensions for temporary tax provisions. The House passed the ABLE Act overwhelmingly 404-17 on December 3, 2014, and engrossed it into the “tax-extender” bill before sending it to the Senate last week.

The President is expected to sign this legislation.

IRS 2015 Gift and Estate Tax Exemption Amounts

The IRS announced the 2015 Gift and Estate Tax Exemption Amounts, along with other tax changes, here.  For persons dying in 2015, the Federal Estate Tax exemption amount has increased to to $5,430,000, up from the 2014 exclusion amount of $5,340,000.  This means that, collectively,  in 2015 a married couple can exclude $10,860,000 from Federal Estate Tax.  The gift tax annual exclusion amount remains $14,000 in 2015.  This means that in 2015, as in 2014, you can transfer up to $14,000 per individual without the necessity of filing a Gift Tax Return.

Advocacy Alert – Sharing Post from NAELA

The National Academy of Elder Law Attorneys asked its members to share this post:

“This Week: House Could Vote on Tax-Favored Accounts
for Some Persons with Disabilities

The House may potentially vote on a bill this week that would create tax-favored accounts for children and adults whose disability occurred before age 26.

The most recent version of the bill, known as the ABLE Act, would allow these tax-favored accounts to receive up to the annual gift tax exemption (currently $14,000 per year). Beneficiaries are restricted to one account, but anyone could contribute to their account.

According to the Congressional Budget Office, “assets in an ABLE account and distributions from the account for qualified disability expenses would be disregarded when determining the qualified beneficiary’s eligibility for most federal means-tested benefits. For SSI [Supplemental Security Income], only the first $100,000 in each ABLE account would be disregarded.”

The news came as part of the House Majority Leader Kevin McCarthy’s (R-CA) floor schedule for the week. Congress hopes to finish up its lame-duck session in the next two weeks.

The Senate would still need to pass the Act before going to the President’s desk for signature. The original version, which was substantially larger in scope, had 74 co-sponsors in the Senate and 380 in the House.

NAELA will continue to monitor this legislation as it develops.”

Source: http://www.naela.org, December 1, 2014