What is the stimulus payment I am receiving?
With passage of the most recent federal stimulus package, many taxpayers and adult dependents may be eligible for a stimulus check. If you are already getting monthly Social Security benefits and are eligible for a stimulus payment, you will get the stimulus payment in the same manner that you are receiving your Social Security benefits. Unless deposited into an ABLE account, the stimulus payment MUST be spent within 12 months or any unspent portion will be counted as an asset in determining benefit eligibility for many federal and state benefits.
Beware of scams! The IRS will not call or email you about the stimulus payment. Do not share your personal information on the phone or over email.
Can I deposit the stimulus payment into an ABLE Account?
Yes! You can put all or part of your stimulus payment into an ABLE account such as the Texas ABLE® Program. That way, you don’t have to worry about spending all the money within 12 months if you don’t need to. Putting all or some of the payment in an ABLE account can give you flexibility. Plus, any amount of the stimulus payment deposited into an ABLE account will have the same benefits protection that the other money in your ABLE account has.
Remember, individuals can save up to $100,000 in their ABLE account without impacting SSI benefits or up to $500,000 without impacting other public benefits (annual contribution limits apply). Also, funds in an ABLE account may only be used for Qualified Disability Expenses. Withdrawals from an ABLE account that are not spent on Qualified Disability Expenses could be considered an asset for purposes of means-tested federal programs, and may be subject to federal income taxation, including a 10% tax penalty on earnings.
Why should I consider putting some, or all, of this payment into an ABLE account?
After 12 months, any unspent portion of your stimulus payment can be counted as an asset for many federal and state benefits.
If you don’t need to use the stimulus payment for things right now, you could use it to start saving. An ABLE account can help you save and pay for certain things that are not covered by benefits. You can save for whatever you need to be independent and participate in your community. That includes adaptive equipment, a vehicle, a home, assistive technology, personal support services, and many other expenses that would be a Qualified Disability Expense. You can also use an ABLE account to save for emergencies.
Do I have to use the stimulus payment the same way that I use my SSI benefit money?
No. The stimulus payment is NOT a payment from Social Security. You do not have to follow Social Security rules when you spend it. Your stimulus payment can be used in any way you choose. You could use your payment now. You could spend it within 12 months.
You could save it in an ABLE account to give you more time to spend it while preserving your benefits. Remember, funds in an ABLE account may only be used for Qualified Disability Expenses. Withdrawals from an ABLE account that are not spent on Qualified Disability Expenses could be considered an asset for purposes of means-tested federal programs, and may be subject to federal income taxation, including a 10% tax penalty on earnings.
Will the stimulus payment disqualify me from the benefits I need?
Not for 12 months. After a year, whatever is left will count toward your $2,000 SSI asset limit if you leave it in a regular account, but if you save it in an ABLE account, it won’t count toward your $2,000 asset limit.
How does an ABLE account help me keep from exceeding my $2,000 asset limit?
Funds in your ABLE account are not counted toward your $2,000 asset limit. You will not lose your benefits or lose eligibility for federal benefits like SSI, SSDI, Medicaid, and HUD by owning an ABLE account. You can save up to $100,000 in your ABLE account and still receive your monthly SSI benefits, or up to $500,000 without impacting other public benefits (annual contribution limits apply).
Can other people help me decide how to spend the money or set up an ABLE account?
Yes. However, it is your decision how to spend the stimulus payment. Making financial decisions is hard for many people. People you trust can help you decide what to do with your money. This includes family, caregivers and others. They might also be able to help you set up an ABLE account. Keep in mind that funds in an ABLE account may only be used for Qualified Disability Expenses. Withdrawals from an ABLE account that are not spent on Qualified Disability Expenses could be considered an asset for purposes of means-tested federal programs, and may be subject to federal income taxation, including a 10% tax penalty on earnings.
What should my family, rep payee, service provider, and other trusted supporters do to help me decide what to do with the stimulus payment?
People who help you with your money need to be sure they do not put their needs or wishes ahead of yours. That includes when they help you with decisions about the stimulus payment. They should talk with you about your options, your needs and your wishes. Some people and their supporters might choose to use something called ‘supported financial decision-making practices’. This may help them when talking about the stimulus payments and the 12-month spending timeline. Some people may choose to save some of the money for later. An ABLE account is a way to save and still protect your benefits.
Where can I get more information about Stimulus payments?
IRS: Economic Impact Payments
National Association of State Treasurers: COVID-19 Resource Center
Where can I find more information about ABLE Accounts?
The state of Texas offers the Texas ABLE Program. Learn more and enroll online at TexasABLE.org.
Where can I find more information about supported financial decision making?
Consumer Financial Protection Bureau: Your Money, Your Goals: Focus on People with Disabilities