NY starts new tax-free savings accounts for the disabled

Oct 12, 2017

Jim Vaccaro and his son Matthew join State Comptroller Tom DiNapoli to announce a new tax-free savings program for disabled New Yorkers
Credit Karen DeWitt

The state comptroller has announced that New York is joining 28 other states in offering a program that will help parents with disabled children save money for their future.

The program is modeled on the college savings program, which also is operated by the comptroller’s office. It allows an account to be set up in the name of any New Yorker who is diagnosed with a disability before the age of 26.

Friends and relatives can contribute up to $14,000 a year for a total of $100,000, and the money can be used tax-free to help pay for the disabled person’s education, housing, transportation and other expenses. 

State Comptroller Tom DiNapoli said the program is even more important now, with uncertainty over what President Donald Trump and Congress may do to repeal or change the Affordable Care Act.

“There’s so much anxiety because of the uncertainty at the federal level,” DiNapoli said. “Especially for those who depend on support from government.”

The comptroller said he hopes the program can help allay some of those fears.

Jim Vaccaro set up a fund for his 4-year-old son Matthew, who has Down syndrome. He said it’s a more realistic alternative than setting up a trust fund, which he says requires an upfront investment of at least $10,000, plus taxes. He said the savings account gives him “peace of mind.”

“Matthew will have more independence, greater financial security and a better quality of life,” Vaccaro said. “Something every parent wants for their child.”

The money in the savings account will not count against a person’s eligibility for supplemental security income. But the federal Medicare and Medicaid systems have not yet ruled on whether the savings account money might count against a person’s eligibility for government health care services.