What is an ABLE account?

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ABLE accounts let people who have disabilities that began before they turned 26 keep money in a special tax-advantaged account. The first $100,000 in an ABLE account does not count against the $2,000 Supplemental Security Income (SSI) resource limit, and none of the money in an ABLE account counts for Medi-Cal or CalFresh (formerly Food Stamps).

However, ABLE accounts have restrictions:

  • They can only be opened through specific programs or institutions.
  • You can only open one ABLE account.
  • You and the other people making contributions on your behalf have a limit on how much you can deposit each year. Combined, you cannot deposit more than $15,000 in 2019.
  • You can only use money in an ABLE account for specific things, such as:
    • Education
    • Housing
    • Transportation
    • Help getting and keeping work
    • Health care
    • Assistive technology, and
    • Other approved expenses.

Learn more about ABLE accounts.

What is an Individual Development Account (IDA)?

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An Individual Development Account, also known as an “IDA," is a savings account for low-income workers that can be used for small-business development, higher education, or the purchase of a first home.

Each time you make a deposit, the IDA program contributes an additional deposit called a match. Most IDA programs have a match of one to four times the size of the deposit you make. So for an IDA with a 2:1 match, each time you deposit $25, you get an additional $50 toward your savings goal.

Who can get an Individual Development Account (IDA)?

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Each IDA program may have slightly different eligibility requirements. Generally speaking though, the following will apply:
  • Your annual income must be within 200% of the Federal Poverty Level ($24,980 for an individual, $33,820 for a couple).

Many IDA programs also have asset and credit history limits. Once you’re enrolled in an IDA program, you must take free financial education training classes.

What can I use an Individual Development Account (IDA) for?

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IDAs that are funded by Temporary Assistance for Needy Families (TANF) or the Assets for Independence Act (AFIA) can be used for three purposes:
  • Developing a business
  • Investing in higher education, or
  • Purchasing a first home.

IDA programs that are funded by other sources may let you save for other purposes, like buying a car or computer. Check with the specific IDA program you want to participate in for more information.

How do I participate in an Individual Development Account (IDA) program?

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First, you need to decide whether you want to open an IDA and what your goal is. Then, you will need to find a program in your area. You can use the IDA directory to find one near you. Next, you will need to attend an orientation meeting to find out about the program and verify your eligibility.

Once accepted into the program, you will open a savings account at a bank that is tied to the IDA organization. When you have reached your savings goal, you’ll be allowed to start withdrawing money from the account to spend on your goal.

Are there any medical eligibility requirements to enroll in an Individual Development Account (IDA)?

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No. Disability status is not required to participate in an IDA program. IDAs are offered to anyone who can meet the eligibility requirements.

How do I find an Individual Development Account (IDA) program?

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To research and find an IDA program in California, check out the DB101 list of IDA resources and the Prosperity Now IDA directory.

Can I participate in a Plan to Achieve Self-Support (PASS) and an Individual Development Account (IDA) at the same time?

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Yes. An IDA can be a part of your PASS plan. The only requirement is that your goal for each program be the same.

If I’m getting Supplemental Security Income (SSI), do I need to tell Social Security about my Individual Development Account (IDA)?

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Yes. You should ask your IDA caseworker to write a letter stating that you can participate in the IDA program without losing your SSI benefits. The letter should specifically mention the “Exclusions under Other Federal Statutes” clause. You should take the letter to Social Security for documentation and keep a copy of it for yourself.

Can I qualify for an Individual Development Account (IDA) while I am eligible for Social Security Disability Insurance (SSDI)?

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Yes. There are no asset restrictions for people on SSDI who want to participate in IDA programs. However, your earned income is still subject to the SSDI work rules.

Is there a savings cap for Individual Development Accounts (IDA)?

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Yes. Most IDA programs only let you save a certain amount of money in your account—often $4,000 to $6,000. This includes the money you deposit as well as the matching funds. Once you reach the limit, you won’t be allowed to deposit any more money.

What is a Plan to Achieve Self-Support (PASS)?

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A PASS lets people on SSI to set aside money and resources for a specified work goal. The purpose of a PASS is to help you get items, services, or skills needed to reach your work goal.

The work goal that you choose should help you earn enough to lower or get rid of your need for SSDI and SSI benefits.

How can I get help when applying for a Plan to Achieve Self-Support (PASS)?

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Social Security's PASS Cadres are PASS experts. Their job is to help people come up with a plan and apply successfully for a PASS. To find a PASS Cadre, click here.

Why should I start a Plan to Achieve Self-Support (PASS)?

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Under Supplemental Security Income (SSI) rules, any income that you get will lower your SSI benefits. But, if you have an approved PASS, you can use that income to pay for the items needed to reach your work goal.

Social Security will not count the money that is set aside under a PASS plan when deciding your monthly SSI benefits. This means you will get a higher SSI payment. Getting a PASS can also let you get SSI benefits if your income or resources are currently above the limits.

Who is eligible for a Plan to Achieve Self-Support (PASS)?

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To be eligible to use a PASS you must:

SSI recipients who get benefits because they are above age 65 can only qualify for a PASS if they were getting SSI because of disability or blindness in the month before their 65th birthday.

What can I use a Plan to Achieve Self-Support (PASS) for?

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You can use a PASS to set aside income and resources to use for reaching a specific work goal. A PASS lets you buy equipment, services, or training. For example, a PASS can be used towards going to school for specialized training for a job. It can also be used towards starting your own business.

What will I have to do to participate in a Plan to Achieve Self-Support (PASS)?

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To participate in a PASS you will need to have:
  • A written plan
  • A work goal
  • A reasonable time frame for meeting your work goal, and
  • An explanation of the expenses necessary to achieve the work goal.

If your PASS plan is for self-employment, you must supply a detailed business plan that gives a description of how you intend to make this business succeed.

Are there any medical eligibility requirements to enroll in a Plan to Achieve Self-Support (PASS)?

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Yes. To be able to use a PASS you must continue to meet Social Security’s requirements for disability or blindness. Social Security will also consider any medical conditions when they decide if you have a reasonable work goal. For example, they may ask you to revise your PASS if you have trouble standing for long periods of time and want to work as a traffic officer.

Does what I have in the bank and what I own affect my eligibility for a Plan to Achieve Self-Support (PASS)?

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Yes. To be eligible for a PASS, you must meet the resource requirements for Supplemental Security Income (SSI). You are allowed to have $2,000 in resources ($3,000 for a couple), one house that you live in, and one car.

If you have resources above the eligibility limits, you can set aside the extra resources as part of your PASS.

How do I prepare to apply for a Plan to Achieve Self-Support (PASS)?

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Creating a PASS requires that you have a work goal and an explanation of how you will be able to accomplish this goal. If you currently do not have a clear work goal or a clear way to achieve it, you may consider working with organizations like your state Department of Vocational Rehabilitation.

It can be very helpful to work with a local PASS expert when starting this process.

If your PASS plan is for self-employment, you must supply a detailed business plan that gives a description of how you intend to make this business succeed.

How does a Plan to Achieve Self-Support (PASS) work with an Individual Development Account (IDA)?

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If you are participating in a federally funded IDA program, you can save money and get a match without jeopardizing SSI or Medi-Cal benefits. If you have an IDA that gets federal funding from block grants under Temporary Assistance for Needy Families (TANF) or the Assets for Independence Act (AFIA), savings cannot be counted as assets.

IDA programs that are not federally funded can count as assets and affect your SSI eligibility, unless the IDA is approved as part of a PASS plan.

Is there somewhere I can look at an example of a successful Plan to Achieve Self-Support (PASS)?

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Yes. You can see a list of successful PASS plans at The University of Montana Rural Institute.

What is the Earned Income Tax Credit (EITC)?

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The Earned Income Tax Credit is a federal tax program that lowers the amount of income tax owed by low-to-moderate income workers. The credit ranges from $529 to $6,557 depending on your income and the number of qualifying children in your family.

How often can I claim an Earned Income Tax Credit (EITC)?

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You can claim an EITC every year that you qualify.

What are the eligibility requirements for an Earned Income Tax Credit (EITC)?

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To be eligible for the Earned Income Tax Credit (EITC) you must:
  • Have earned income from employment, self-employment, or employer-paid disability benefits you got before retirement
  • Meet adjusted gross income requirements
  • Have a Social Security Number valid for employment
  • File a joint tax return if married
  • Be a U.S. citizen or resident alien. If not, you must be married to a U.S. citizen or resident alien and filing a joint tax return
  • Live in the U.S. for more than half of the year
  • Be 25-64 years of age, if you aren’t claiming any qualifying children (if you are claiming qualifying children, you can be any age)

In addition, you cannot:

  • Claim foreign income using Form 2555
  • Have investment income that exceeds $3,600 for Tax Year 2019
  • Be the dependent of another person
  • Be the qualifying child of another person

How do I claim an Earned Income Tax Credit (EITC)?

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If you are eligible, you can claim an EITC while filing your annual federal tax return, IRS Form 1040. If you have a qualifying child, you will need to attach a Schedule EIC.

Does what I have in the bank and or what I own affect my eligibility for an Earned Income Tax Credit (EITC)?

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While there are no asset requirements to claim the EITC, you cannot have investment income that exceeds $3,600 in tax year 2019 (filing by April 2020).

How do I know how much my Earned Income Tax Credit (EITC) is worth?

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The value of your EITC is based on your adjusted gross income (AGI) and the number of qualifying children in your family. You can calculate your EITC yourself by using the Earned Income Credit Worksheet in Form 1040. Or you can ask the IRS to calculate it for you by noting an “EIC” in the Earned Income Credit line on your tax return.

When can I get benefits from the Earned Income Tax Credit (EITC)?

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You can claim your Earned Income Tax Credit while filing your annual federal tax return.

Is there someone who can help me with my taxes?

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If you are on a limited income, do not pay someone to do your taxes. Use a Volunteer Income Tax Assistance (VITA) Center to file. Most centers can e-file your return for free.

To find the nearest VITA site, visit this website, or call 1-800-906-9887.

What is a Special Needs Trust (SNT)?

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A Special Needs Trust (SNT) is a legal document with instructions about the management and distribution of the assets placed in the SNT. The person who benefits from the SNT is the “beneficiary.” The person or organization (such as a bank) that manages the SNT and distributes the funds for the beneficiary is the “trustee.” Special Needs Trusts are set up to protect public benefits. The assets are used for support and services, other than food and housing, for a person with a disability.

Why are Special Needs Trusts (SNTs) important?

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Special Needs Trusts (SNTs) are important because they protect your eligibility for public benefits. The SNT lets you have money available for things other than food and housing without the money counting towards your asset limits for Supplemental Security Income (SSI), Medi-Cal, and In-Home Supportive Services (IHSS).

SNTs also improve the quality of care that you can get; a well designed SNT can give you additional care options and opportunities for treatment and rehabilitation, housing, electronic equipment, computers, job training, vacations, etc.