The earnings you make on your STABLE Account are not subject to federal or Ohio state income taxes, so long as you spend the earnings on Qualified Disability Expenses. If you do not live in Ohio, check with your state taxation agency or financial planner to see if your state also provides an income tax exemption for STABLE Account earnings.
State Tax Deduction
If you are an Ohio resident or taxpayer, you can take a state income tax deduction of up to $2,000 per STABLE Account you contribute to, with unlimited carry forward. This means that if you contribute more than $2,000 to a STABLE Account in a calendar year, you can carry the remainder of your contributions forward to subsequent years, until your entire contribution has been fully deducted.
Other states may also offer income tax deductions or credits for STABLE Account contributions. Please check with your state taxation agency or financial planner for more information on your state tax benefits.
Keep Your Public Benefits
One of the primary reasons that the federal ABLE Act was passed was to protect individuals with disabilities from losing certain benefits such as SSI or Medicaid.
With the exception of some special SSI rules (see below), your STABLE Account funds do not count against you for purposes of determining your eligibility for means-tested federal benefits programs. For example, if you have $5,000 in your STABLE Account, that $5,000 does not count as an asset when determining your eligibility for SSI or Medicaid.
In addition, your STABLE Account will not affect your eligibility for state-based means-tested benefits programs offered by Ohio. Residents of other states should check with their state benefits agency to verify that a STABLE Account will not affect state-based benefits.
No Impact on Medicaid Benefits
The money in your STABLE Account will not affect your eligibility for Medicaid benefits.
Limited Impact on SSI Benefits
Using a STABLE Account will not make you ineligible for SSI. If, however, you have more than $100,000 in your account, your SSI benefits may be suspended.
Here's how this will work: any STABLE Account funds over $100,000 are treated as a countable resource for purposes of determining your SSI benefits. For example, if you have $101,000 in your STABLE Account, the Social Security Administration will ignore the first $100,000, but will count the next $1,000 as your resource. The good news is that if your STABLE Account balance causes you to exceed the normal SSI resource limits, your SSI benefits will be merely suspended - you will not become ineligible for SSI. This means that as soon as your account balance drops, your SSI benefits will resume.
Money you withdraw and use for housing expenses may also affect your SSI benefits if you do not spend the money right away. To avoid any impact to your SSI benefits, be sure to spend housing money within the same calendar month that you withdraw the money. For example, if you withdraw $800 from your STABLE Account on June 3rd for rent, you must pay that money to your landlord by June 30th. As long as you do not hold housing funds over from one calendar month to the next, the funds will not affect your SSI benefits. For more information on how the Social Security Administration will treat STABLE Accounts, see their recent guidance here.
The STABLE Card is a loadable prepaid debit card that is available to everyone with a STABLE Account. The STABLE Card does not pull money directly out of your STABLE Account. Instead, you get to choose a specific amount of money to load onto your card. This way, you can better control budgets and plan for your Qualified Disability Expenses. If you are a parent or other Authorized Legal Representative for a loved one's STABLE Account, you can also request a companion card for that individual. The STABLE Card's discrete loading feature allows you to limit how much money your loved one can access at any given time.
Only STABLE Account funds can be loaded onto your STABLE Card, to avoid commingling STABLE money with non-STABLE money. This allows for easier reporting of your withdrawals and expenditures.
You can use your STABLE Card to spend money anywhere MasterCard is accepted. Although it is a loadable card, it works just like a regular debit card. You will be able to set up a STABLE Card online account to view your spending history.