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Sofie has funded an ABLE account for her niece,Isabelle,who is disabled and contributed $2,000 and Sofie...

Sofie has funded an ABLE account for her niece,Isabelle,who is disabled and contributed $2,000 and Sofie contributed $15,00. What is the taxable amount?

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Answer #1

Any person contributing to ABLE account for a beneficiary now can claim saver's credit upto a limit.people can receive a credit equivalent to 50, 20, or 10 percent of their annual contributions based on their gross income.

Assuming sofie is eligible for 50% credit hence half of her contribution i.e. 750 will be avalable as credit while she have to pay tax on remaining 750.

However person who is beneficiary is not allowed to take deduction of contribution.Investment income from contribution may be exempted. So isabelle has to pay tax on whole 2000.

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