Meet Blake, who runs his own snow cone business in Texas. Blake has Down syndrome, and hasn’t let it slow him down one bit. After graduating from high school, he rolled up his sleeves and started a new business. It’s called Blake’s Snow Shack, a snow cone business. He’s living his dream and a reminder to all of us to focus on people’s abilities – not their disabilities. He’s one of the inspirations behind the ABLE provisions in the Tax Cuts & Jobs Act.
Kicking off #DownSyndromeAwarenessMonth with wise words from Dr. Seuss <3
“Today you are YOU, that is TRUER than true. There is NO ONE alive who is YOUER than YOU!” pic.twitter.com/c8iCMUS3j1
— Blake's Snow Shack (@Blakessnowshack) October 1, 2018
Thanks to these provisions in tax reform, Blake will be able to save more of his own money in order to live an independent and fuller life. Tax reform makes it easier for people with disabilities to explore the workforce and opens up the opportunities for everyone, no matter their background, to start their own businesses and invest in their communities. For people like Blake, this is why tax reform is so important.
Before Republicans updated the tax code for the first time since 1986, the disability community was worse-off under the old code. At the time, if you placed savings into a 529 account for your son’s or daughter’s college education, but they developed a disability that caused a change in plans, the tax code didn’t allow you to roll those savings over into Achieving a Better Life Experience (ABLE) accounts tax-free. ABLE accounts, you may remember, are designed to help families and individuals save money for expenses related to their disabilities.
Additionally, many individuals with disabilities want to work and earn a paycheck. Under the previous tax code, work was disincentivized.
These limitations were addressed in the Tax Cuts & Jobs Act, which included provisions known as ABLE 2.0.
With the ABLE Financial Planning Act, families who were saving for tuition in 529 plans can now roll over the amount to qualified ABLE accounts tax free.
With the ABLE to Work Act, an ABLE beneficiary who earns income for a job is able (pun intended) to save up to the Federal Poverty Level, which is currently $12,060, in addition to their annual contribution limit of $14,000. This will be really helpful for individuals with disabilities who want to work but cannot contribute to an employer retirement savings plan.
On top of this, the ABLE to Work Act makes ABLE account contributions eligible for what’s known as the “Saver’s Credit.” This little-known tax credit allows individuals to take a credit of up to $2,000, or $4,000 if filing jointly, to save more money. If you’re low income, the more you save, the more credit you claim.