The earnings you make on your Palmetto ABLESM account are not subject to federal or South Carolina state income taxes, so long as you spend the earnings on Qualified Disability Expenses.
Keep Your Public Benefits
One of the primary reasons that the federal ABLE Act was passed was to protect individuals with disabilities from losing certain benefits such as SSI or Medicaid.
With the exception of some special SSI rules (see below), your Palmetto ABLE account funds do not count against you for purposes of determining your eligibility for means-tested federal benefits programs. For example, if you have $5,000 in your Palmetto ABLE account, that $5,000 does not count as an asset when determining your eligibility for SSI or Medicaid.
In addition, your Palmetto ABLE account will not affect your eligibility for state-based means-tested benefits programs offered by South Carolina.
No Impact on Medicaid Benefits
The money in your Palmetto ABLE account will not affect your eligibility for Medicaid benefits. For more information, please see Medicaid's guidance on Palmetto ABLE accounts here.
Limited Impact on SSI Benefits
Using a Palmetto ABLE account will not make you ineligible for SSI. If, however, you have more than $100,000 in your account, your SSI benefits may be suspended.
Here's how this will work: any Palmetto ABLE account funds over $100,000 are treated as a countable resource for purposes of determining your SSI benefits. For example, if you have $101,000 in your Palmetto ABLE account, the Social Security Administration will ignore the first $100,000 but will count the next $1,000 as your resource. The good news is that if your Palmetto ABLE account balance causes you to exceed the normal SSI resource limits, your SSI benefits will be merely suspended - you will not become ineligible for SSI. Once your account balance drops, you can notify SSA to have your SSI benefits resume.
The STABLE Card is a loadable prepaid debit card that is available to everyone with a Palmetto ABLE account. The STABLE Card does not pull money directly out of your Palmetto ABLE account. Instead, you get to choose a specific amount of money to load onto your card. This way, you can better control budgets and plan for your Qualified Disability Expenses. If you are the Authorized Legal Representative for an individual with a disability, you will be issued the primary card, but can also obtain a companion card for the beneficiary. The STABLE Card's discrete loading feature allows you to limit how much money your loved one can access at any given time.
Only funds in your Palmetto ABLE account can be loaded onto your STABLE Card, to avoid commingling STABLE money with non-STABLE money. This allows for easier reporting of your withdrawals and expenditures.
You can use your STABLE Card to spend money anywhere Visa is accepted. Although it is a loadable card, it works just like a regular debit card. You will be able to set up a STABLE Card online account to view your spending history.