Food as a Qualified Expense for IAble Account Owners
DES MOINES, IA –The Social Security Administration (SSA) has clarified food is a qualified disability related expense for Achieving a Better Life Experience (ABLE) account owners. State Treasurer Michael Fitzgerald, who administers Iowa’s ABLE program (IAble), is eager to get the word out. “With the recent clarification from the SSA, IAble account owners can feel confident using their savings for food expenses,” Fitzgerald said. “This could be a game changer for many account owners, including those struggling financially from the effects of the COVID-19 pandemic.”
IAble allows eligible individuals with disabilities and their families to save money in checking and investment options without the risk of losing federal benefits such as Supplemental Security Income (SSI) and Medicaid. These savings offer tax incentives, including a state tax deduction for Iowans. For 2020, anyone contributing to an IAble account, not just the account owner, can deduct up to $3,439 from their 2020 state taxes.* The savings can be used for disability related expenses such as housing, assistive technology, legal fees, transportation and more.**
“The needs and costs of living with a disability range drastically from each individual’s unique situation,” said Fitzgerald. “Adding food to the list of qualified expenses gives account owners peace of mind they can utilize their savings to achieve their better life experience, whatever that may be for them.”
For more information about IAble, visit IAble.gov or call (888) 609-8910. You can keep up with all of the treasurer’s programs on Facebook and Twitter. For more information on food as a qualified expense, visit the SSA’s website (SSA.gov) and view section B(9) of the updated ABLE Program Operations Manual System (POMS).
*The Federal Annual Contribution Limit is $15,000. If withdrawals are not qualified, the deductions must be added back to Iowa taxable income. Adjusted annually for inflation.
**Earnings on non-qualified withdrawals may be subject to federal income tax and a 10% federal penalty tax, as well as applicable state and local income taxes.