(Jefferson City) -- The state manages about 1,100 accounts for Missourians with disabilities and their families to save money and invest, tax-free.
The MO ABLE program is one of the largest of its kind in the country. State Treasurer Scott Fitzpatrick’s office oversees the program, which allow users to save without fear of losing their federal needs-based benefits like Medicaid and Supplemental Security Income.
Fitzpatrick tells Missourinet MO ABLE works like a college savings account or a 401K. He says says Missourians with disabilities can be very valuable in the workplace.
“ABLE is kind of a financial tool that allows some people that may not work because of fear of having assets and those assets causing them to lose access to benefits like Medicaid and SSI. ABLE is a program that lets people establish an account to save for the future and the money that goes into that account is not part of the asset test that is done to determine whether or not somebody is eligible for those federal benefits,” says Fitzpatrick.
He says the government-sanctioned accounts can be used for saving but it also can be used like a checking account. A loadable debit card can be attached to the account. Qualified expenses must improve the quality of life, independence or help to provide care for the individual with a disability.
“I mean it can be used on housing. It can be used on transportation. It can be used on education. It can be used on personal care assistance,” says Fitzpatrick. “It can be used on just a huge variety of things. The things we use as an example of like what is not a qualified expense would be like going to the casino and gambling with it or going to the liquor store and buying alcohol.”
The program gives account holders a tax deduction when money is deposited – up to $15,000.
“Those contributions, for whoever contributed to them, would reduce their Missouri taxable income up to that 15,000 dollars that they put into that account,” he says. “So, it would reduce their tax bill basically by their marginal rate times the contribution.”
Fitzpatrick, who previously served as the Missouri House Budget Committee Chairman, is also encouraging Missouri businesses to add payroll deductions for MO ABLE accounts to company benefits packages.
To learn more about MO ABLE, click here.