Able Account Arizona: A Comprehensive Guide to Planning and Management

Able accounts in Arizona are a type of special needs trust that allows individuals with disabilities to save money without losing government benefits.

To be eligible for an able account in Arizona, you must be under the age of 65 and have a disability as defined by the Social Security Administration.

The annual contribution limit for able accounts in Arizona is $15,000, and the funds can be used to pay for a wide range of qualified expenses, including education, housing, and transportation.

Arizona able accounts are designed to be flexible and adaptable to the individual's changing needs, and can be used to support the person with a disability throughout their lifetime.

To be eligible for an ABLE account in Arizona, you must have a disability that meets Social Security’s standards, and the onset of your disability must have occurred before you turned 26.

Arizona has partnered with the Stable Account platform, operated by the State Treasurer of Ohio, to offer an ABLE account option to its residents.

You can self-certify your eligibility for an ABLE account, and if you already receive benefits under SSI or SSDI, you are automatically eligible to establish an ABLE account.

There is no government subsidy or state tax incentive for opening an AZ ABLE account, but earnings in the account grow tax-free.

Distributions from the account are also untaxed, so long as they are used for qualified disability expenses, such as housing, travel, therapy, and medical equipment.

Arizona residents have been able to open ABLE accounts in other states for about two years, but now they have a local option with AZ ABLE.

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Money saved in an AZ ABLE account does not affect SNAP benefits, nor does it affect Arizona Health Care Cost Containment System (AHCCCS) Medicaid.

The account is owned by the individual with the disability, providing them with financial freedom. This is a significant advantage, as individuals with disabilities could previously only save around $2,000 of their own money before risking loss of health care and other benefits.

There is an annual contribution limit for ABLE accounts, which aligns with the federal gift tax exclusion. This limit is currently $15,000, but will increase over time.

The ABLE beneficiary has to have been disabled before age 26 to be eligible for an account. This is an important rule to keep in mind.

Opening an account can bring a lot of benefits. Money saved in an ABLE account does not affect your eligibility for SNAP benefits.

You can breathe a sigh of relief knowing that your savings won't impact your health care. In Arizona, the AHCCCS Medicaid program is also exempt from being affected by your ABLE account balance.

However, it's worth noting that if your account balance exceeds $100,000, it may suspend your SSI benefits. This is something to keep in mind when managing your account.

Having an ABLE account can provide you with financial freedom, which is a huge advantage. This means you'll have more control over your finances and can make decisions that are best for you.

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The account is owned by the individual with the disability, giving them full control over their finances. This is a significant shift from the past, when individuals with disabilities were limited in their ability to save.

Before ABLE, individuals with disabilities could only save around $2,000 of their own money before risking loss of health care and other benefits. This is a stark contrast to the freedom that comes with an ABLE account.

ABLE accounts offer a new investment opportunity, allowing you to grow your savings over time. And the best part? Your earnings are tax-free, so you won't have to worry about losing money to taxes.

As an Arizona resident and taxpayer, you may be eligible to deduct the amount of your contributions to an ABLE account from your taxes. This can be a significant advantage, especially for married individuals filing a joint tax return.

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The basic rules of ABLE accounts in Arizona are governed by federal law, but there's an important exception: the maximum contribution to an account in any one year is $15,000.

This limit will increase over time, but it's worth noting that it will do so slowly. There's also an exception for some beneficiaries who qualify for an increased contribution.

One major limitation to keep in mind is that any money left in an ABLE account at the death of the beneficiary will be payable to the state Medicaid agency. For someone receiving benefits from the Arizona Health Care Cost Containment System, that means AHCCCS will get most or all of the balance in an ABLE account.

The ABLE beneficiary must have been disabled before age 26 to qualify for an ABLE account. This requirement helps keep costs lower, but it's worth noting that there's no particular logic behind it.

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To be eligible for an ABLE account in Arizona, you must have a disability that meets Social Security's standards.

The onset of your disability must have occurred before you turned 26, which is a key factor in determining eligibility.

If you already receive benefits under SSI or SSDI, you are automatically eligible to establish an ABLE account, making the process easier for those who are already receiving assistance.

You can self-certify your eligibility, which means you can confirm your own eligibility without needing to go through a lengthy application process.

To qualify, your disability must meet Social Security's standards, which are the same standards used for SSI and SSDI.

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Contributing to an ABLE account can be done after post-tax income, and for the tax year 2024, the annual contribution limit from all sources is $18,000.

You can also make an additional contribution up to the lesser of your annual income or $14,580 if you're employed.

Contributions to an ABLE account grow tax-free as long as they're used for qualified disability expenses.

In Arizona, you can deduct contributions up to $2,000 on your income tax return, benefiting both you and the account beneficiaries.

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You can contribute to your ABLE account after post-tax income, and for the tax year 2024, the annual contribution limit from all sources is $18,000.

Contributions to an ABLE account can come from various sources, including employment, and if you're employed, you can make an additional contribution up to the lesser of your annual income or $14,580.

As contributions grow tax-free, you don't have to worry about taxes on the growth of your ABLE account as long as the funds are used for qualified disability expenses.

In Arizona, contributing to an ABLE account can also provide a state income tax deduction, allowing you to deduct contributions up to $2,000 on your income tax return.

The beneficiary owns the ABLE Act account, but a guardian, parent, or agent on a power of attorney can open and manage the account.

Most people will easily figure out how to open the account and who can handle it.

A beneficiary can select among several investment options to grow the money over time.

In some cases, the account might help pay monthly expenses without affecting eligibility.

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Fees for maintaining a STABLE account through AZ ABLE are minimal, with a monthly fee of $2.25 that's charged quarterly, totaling $27 annually.

There's also a small asset-based fee of between 0.19% and 0.33%, depending on your chosen investment options. This fee can impact the overall balance of your account.

Other administrative fees, such as a return check fee, may apply depending on your account activity. More information on these fees can be found in the AZ ABLE Fees FAQ.

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ABLE accounts offer significant tax advantages that can enhance your estate planning strategy. Contributions to an ABLE account are made after post-tax income, but the good news is that contributions grow tax-free as long as they are used for qualified disability expenses.

In Arizona, you can deduct contributions up to $2,000 on your income tax return, benefiting both you and the account beneficiaries. This can be a huge advantage for those who contribute to an ABLE account.

The annual contribution limit from all sources is $18,000 for the tax year 2024. If you are employed, you can make an additional contribution up to the lesser of your annual income or $14,580.

Arizona residents and taxpayers may deduct the amount of their contributions to an ABLE Account, up to $2,000 per participating taxpayer, and up to $4,000 for married individuals filing a joint tax return.

Here are some key tax implications to keep in mind:

Arizona residents pay $2.25 per month to maintain a STABLE account, which equals $27.00 annually when charged quarterly.

These monthly fees are a small price to pay for the benefits of a STABLE account, which can help you save for disability-related expenses.

The asset-based fee for a STABLE account ranges from 0.19% to 0.33%, depending on your chosen investment options.

This fee is a small percentage of your account balance, but it's essential to understand how it works to make informed decisions about your money.

Incorporating an ABLE account into your estate planning in Arizona can be a strategic choice for providing continued support to a beneficiary with special needs while preserving their eligibility for government benefits.

You can specify in your will that a portion of your estate be directed to fund an ABLE account, ensuring the assets earmarked for a person with disabilities are managed appropriately.

In Arizona, the contribution limits for an ABLE account align with the Federal gift tax exclusion, currently $18,000 annually.

Including clear instructions on how the funds should be deposited into the ABLE account is crucial to ensure compliance with contribution limits and the intended purpose of the account.

By making such a designation, you can ensure your loved one with special needs receives the support they need while maintaining their eligibility for government benefits.

Understanding the legal landscape governing ABLE accounts in Arizona is crucial for making informed decisions. ABLE accounts offer you the opportunity to save for disability-related expenses without losing eligibility for certain assistance programs.

Compliance with Arizona laws is essential to maintain the intended benefits of your ABLE account. Your account must comply with state-imposed contribution limits.

The annual contribution limit in Arizona is a maximum of $18,000, which indexes with inflation. This means that the limit may increase over time to keep pace with inflation.

The lifetime contribution limit in Arizona is capped at $550,000. It's your responsibility to ensure your account does not exceed these limits.

To maintain compliance, it's essential to track your balance carefully.