Want to save the $1400 stimulus payment? Consider an ABLE account.
The federal American Rescue Plan (ARP) passed in early March provides a third round of payments intended to stimulate the economy and provide financial relief to individuals during the COVID-19 public health emergency. Most people will receive $1,400 for both themselves and any dependent children. Because these payments are processed though the Internal Revenue Service (IRS), people who do not usually file taxes should do so this year. Most individuals with no earned income and no tax liability will still quality for this stimulus and other financial relief.
Like the previous two stimulus payments, the financial assistance provide by ARP is not taxable income and does not count as “income” towards eligibility for Medicaid or CHIP. The stimulus payments also do not count as a resource in determining Medicaid eligibility for the first 12 months after the payments are received. If a person still has their stimulus money after 12 months, it will count as a resource for those Medicaid categories that have resource limits. See this PHLP factsheet for a listing of which common Medicaid categories have resource limits.
Individuals with disabilities who want to save their stimulus payments (past the initial 12 months) and maintain eligibility for Medicaid should consider the PA ABLE Saving Programs. Available in Pennsylvania as of 2017, ABLE accounts provide people with a disability that started before age 26 the chance to save their money in tax-favored accounts without losing eligibility for government-funded assistance like Medicaid, SSI, and Home and Community Based Services (HCBS Waiver). ABLE accounts allow contributions of up to $15,000 per year (and significantly more for account owners with earned income). Funds deposited in an ABLE account do not count against the resource limits of Medicaid or other means-tested programs.
For more information about setting up an ABLE account, visit www.PAABLE.gov or call 1-855-529-ABLE (2253). You can set up an ABLE account online or by phone in a few simple steps.