New Missouri MOABLE Program Introduces Disability Savings Accounts

Missouri has implemented a new financial program to help disabled persons and their families achieve financial stability. Missouri Achieving a Better Life Experience (MOABLE) accounts will operate similarly to 529 education savings plans: Qualifying individuals may deposit money and withdraw tax-free as long as the money is used for disability-related expenses.

MOABLE was passed in December of 2014. In April of 2017 the inaugural MOABLE account was opened by Senator Eric Schmitt. Schmitt opened the account for his disabled son, who was his inspiration for creating the program.

Who is eligible for MOABLE?

In order to be eligible for a MOABLE account, the qualifying individual must have developed their disability before the age of 26, and the disability must have lasted or be expected to last a minimum of one year. Disabilities can be either mental or physical. A list of qualifying conditions can be found in the Social Security Administrations Disability Blue Book. Currently, taxpayers from any tax bracket are eligible for MOABLE accounts; there is no income limitation.

What disability expenses qualify?

Funds in a MOABLE account can be used for Qualified Disability Expenses. An expense is ‘qualified’ if it relates to the individual’s disability or helps them maintain quality of life. The most common examples of Qualified Disability Expenses are tuition, housing, transportation expenses and employment support. Funds in a MOABLE account can be used for non-qualifying expenses, but they will be subject to regular income taxes, plus a 10% additional tax on the withdrawn funds.

Are there contribution limitations?

The maximum yearly contribution an individual can make to a MOABLE savings account is $14,000. Contributions are tax deductible to a certain amount based on filing status. Single taxpayers may deduct up to $8,000 in contributions, and joint taxpayers may deduct up to $16,000 of contributions. There is also an account balance limit of $445,000. Once the account balance reaches this limit, no additional contributions are allowed until the balance drops below $445,000.

Will this affect my other benefits?

MOABLE funds generally do not count against an individual in determining eligibility for federal benefit programs. Money in an account will not affect an individual’s eligibility for Medicaid, SSI, or SNAP benefits, but SSI benefits may be suspended if the individual’s MOABLE account balance reaches or exceeds $100,000.

MOABLE accounts are a new avenue to financial stability that will help many qualifying families.  If you believe you or a loved one qualify for a MOABLE account, please contact an Anders advisor for assistance.