Do ABLE Accounts Count as Income?
OHFA has received an increase in inquiries concerning Achieving Better Life Experience Act (ABLE) accounts, also known as STABLE accounts, and if they are treated as income. The Act allows contributions to a tax-advantaged ABLE savings account to provide for the qualified disability expenses of the designated beneficiary of the account. The designated beneficiary must be a person with disabilities whose disability began prior to his/her 26th birthday. Per the mandate of the ABLE Act, for the purpose of determining eligibility and continued occupancy, housing providers should disregard amounts in the designated beneficiary’s ABLE account. See The U.S. Department of Housing and Urban Development's (HUD) notice for further information:
NOTICE PIH 2019-09 NOTICE H-2019-06 Public Housing.
The notice makes it clear that if someone other than the designated beneficiary contributes directly to an ABLE account, that contribution will not be counted as income to the designated beneficiary. The notice contains the following example:
- “If a relative provides a recurring gift of $100 per month directly to the beneficiary, the recurring gift would be counted as income. If a relative deposits the $100 recurring monthly gift directly into the ABLE account, then it will not be counted as income.”
- Note: This does not apply if the designated beneficiary is the person depositing the funds directly into the ABLE account.
With the notice, HUD wanted to ensure that housing providers understand that while wages must be included in income even if the wages are direct deposited into an ABLE account, wages that are subsequently deposited by the beneficiary into the ABLE account must not be counted as income again when a tenant makes a withdrawal from the account. For example:
- A tenant receives $1,000 monthly in wages. Each month the tenant deposits $500 in his/her own ABLE account. The tenant then takes a $400 monthly distribution from the ABLE account. In this scenario, the housing provider should include the $1,000 in monthly wages but must not also count the $400 monthly distribution as income.
This does not mean that amounts from an includable income source that are subsequently deposited by the beneficiary into their ABLE account are to be subtracted from the total amount received from the source when determining annual income. For instance:
- A tenant receives $1,000 monthly in Supplemental Security Income (SSI). Each month the tenant deposits $500 of his/her benefit amount in an ABLE account. In this case, the housing provider must include the entire $1,000 monthly benefit. The monthly benefit amount is not reduced by the amount of the funds the beneficiary deposited into the ABLE account.
It’s important to remember that interest on the ABLE account balance will not be counted as income, whether actual income or imputed asset income. HUD also clarified that distributions from the ABLE account are also not considered income.
