Frequently Asked Questions

ABLE Accounts differ from Special Needs Trusts in various ways. For example, ABLE Accounts have an annual contribution limit while Special Needs Trusts do not. ABLE Accounts can be managed by the Account Owner, not a trustee like Special Needs Trusts. ABLE Accounts allow for direct access to and control over one’s money as compared to a trustee overseeing a Special Needs Trust. Funds in an ABLE Account can be used to cover housing expenses without affecting SSI, if distribution and payment for housing expenses occur within the same month. If funds from a Special Needs Trust are used for housing, it could impact SSI benefits. ABLE Accounts are generally lower in cost to open and manage than a Special Needs Trust.

The earnings on your investments are federally tax-advantaged, if used for Qualified Disability Expenses. They are also federally tax-deferred, allowing you to maximize your returns. Withdrawals are tax-free at the federal level if used for qualified disability expenses. However, if the funds are not used for these expenses, they may be subject to federal income tax and a 10% federal penalty tax, along with any applicable state or local income taxes.

No. An Account Owner is limited to one ABLE Account, except in the case of an Indirect Rollover or a Direct Rollover from another ABLE account.

In the case of Indirect Rollovers and Direct Rollovers to and from the same ABLE Account Owner, the entire balance of the ABLE account must be transferred. For Indirect Rollovers, the ABLE account from which the funds are withdrawn must be closed within 60 days of the withdrawal and for Direct Rollovers, the ABLE account from which the funds are withdrawn must be closed upon completion of the Direct Rollover.

• SSI disregards ABLE Account balances when determining benefits, except in 2 situations:

1. When ABLE Account balances exceed $100,000; and
2. When you withdraw funds for housing expenses and the funds are not used in the same calendar month as the withdrawal and/or Non-Qualified Withdrawals.

• Medicaid disregards ABLE Account balances when determining Medical Assistance (Medicaid) eligibility.
• SNAP (Supplemental Nutrition Assistance Program) disregards ABLE Account balances when determining SNAP eligibility.
• HUD (US Department of Housing and Urban Development) for the purpose of determining eligibility and continued occupancy, HUD will disregard amounts in the ABLE Account.
• ABLE accounts also allow individuals with disabilities who work to save money while still maintaining eligibility for SSDI benefits or other work incentives. This can help individuals become more financially independent without losing access to important benefits.

Yes. Eligibility is determined by the age of onset.

No. However you must meet the ABLE eligibility requirements (refer to, “Who is eligible to own an ABLE Account”, above).

No. However, you should have a record of the doctor’s signed diagnosis, benefits verification letter from the Social Security Administration, or other relevant documentation for Account verification in case it is requested by the ABLE plan or the governing bodies of ABLE: SSA or the IRS.

In the Account enrollment process, you will be asked to certify that if your condition ever changes so that you would no longer be eligible for an Account that you will notify the ABLE Plan. Based on that certification, the ABLE Plan will assume your eligibility continues until you notify the ABLE Plan of any change.

You can keep your ABLE Account open in case your disability later worsens, and you become eligible again. However, additional contributions cannot be made to your Account and any withdrawals you make while you are ineligible will be considered Non-Qualified Withdrawals.

There is no fee to open an Account, and it can be opened with an initial contribution of just $25.

An Account is charged an Annual Account Maintenance Fee of $56 ($14 withdrawn quarterly). This can be lowered to $31 ($7.75 withdrawn quarterly) if electronic delivery is selected.

If the Checking Account Option is selected, there is a $2.00 monthly fee, which is waived if Electronic Delivery of monthly checking account statement notification is selected OR with an average monthly Account balance of at least $250 in the checking account.

The Annual Asset-Based Fee per Investment Option on assets per Investment Option range from 0.30% to 0.36%, depending on which Investment Option(s) are selected. The Checking Account Option is not subject to the Annual Asset-Based Fee.

If a withdrawal is not used for a Qualified Disability Expense, the earnings portion of the withdrawal is subject to income tax and the Federal Penalty Tax (an additional 10 percent penalty on the earnings portion of the withdrawal). Withdrawals not used for Qualified Disability Expenses could also affect other benefits. Speak to a tax professional and/or a benefits specialist about your specific circumstances.

Eligible Individuals can open and manage the Account for themselves. Alternatively, an Authorized Individual may open and manage an Account on behalf of an eligible minor or an eligible adult who lacks Legal Capacity, or as an agent under power of attorney for an eligible adult with Legal Capacity who is unable or chooses not to do so on their own. The Authorized Individual must certify that they rank highest on the following hierarchy and is willing and able to manage the Account:

1. Power of Attorney
2. Conservator or Legal Guardian
3. Spouse
4. Parent
5. Sibling
6. Grandparent
7. SSA-appointed Representative Payee

An Eligible Individual living in any state, US territory or military base, may open an Account. However, before enrolling in an ABLE plan outside of the state of residence, consider your state’s plan first. If you are not a Nevada taxpayer, consider any state tax or other benefits that may be available by investing in your home state’s qualified ABLE program. State-based benefits should be one of many factors to be considered when making an investment decision, and different states have different tax provisions. You should consult your tax advisor to learn more about how state-based benefits (or any limitations) would apply to your specific circumstances.

No. Each ABLE Account is specific to one Eligible Individual.

Yes. ABLE Account assets can be transferred during the lifetime of the Account Owner to another Eligible Individual. A transfer to a non-Sibling will be treated as a Non-Qualified Withdrawal and may generate negative tax consequences. Some ABLE plans do not permit transfers to non-Siblings. Consult with a tax professional regarding your specific circumstances.

Yes. The Successor Account Owner designation must be submitted using the Account Information Change form and processed during the life of the Account Owner, even though the designation will not take effect until after the death of the Account Owner. There may only be one Successor Account Owner named on the Account. A transfer of ABLE Account assets to a Successor Account Owner, who is a non-Sibling, will be treated as a Non-Qualified Withdrawal and may generate negative tax consequences.

If the Account Owner moves to another state, they can keep the Account in this Plan; or, the Account Owner can rollover the ABLE Account into another Plan. It is encouraged that individuals look at the ABLE Plan in their state of residence.

You may contribute to one or any combination of eight Investment Options offered. Seven are Asset Allocation Investment Options with varying blends of stocks, bonds, cash, and money market – with the combinations ranging from conservative to aggressive. The eighth Investment Option is an FDIC-insured interest-bearing Checking Account Option with an optional debit card that is provided through Fifth Third Bank, National Association.

Twice per calendar year. You can change your Investment Options for any NEW contributions at any time.

A person or an entity that has been appointed as a representative payee by the Social Security Administration can open and manage an IL ABLE Account for the benefit of an Eligible Individual so long as they can certify that there is no other person or entity with a higher priority on the list of possible Authorized Individuals that is willing and able to open and manage an IL ABLE Account for the Account Owner.

A SSA Representative Payee will submit an Enrollment Form along with a copy of their SSA Selection notice or SSA Benefits Verification notice for review. If the named Representative Payee is an entity, and not an Individual, the representative of the entity will complete page 4 of the Enrollment Form with the entity’s name and EIN number. They will include the Authorized Entity Signatory form or a List of Authorized Signers on company letterhead naming those representatives of the agency who is designated to transact on the Entity’s behalf. Some states utilize self-certification and therefore do not require legal documentation to be submitted. For these states, the Authorized Individual self certifies through the enrollment process and/or through the use of our Account Information Change form. Nevada is a self-certification state.

Depending on the ABLE plan, An Authorized Individual may need to send the corresponding documentation based on the highest applicable hierarchy chosen on the Enrollment Form for review. (i.e.-Letters of Guardianship if Guardian hierarchy chosen, Account Owner’s birth certificate if Parent hierarchy chosen-etc.). Some states only require self-certification and therefore do not require legal documentation to be submitted. For these states, the Authorized Individual self certifies through the enrollment process and/or through the use of our Add an AI form. Nevada is a self-certification state.

An Interested Party can be a person or entity that receives duplicate Account statements and can access information about the Account by calling customer service. Interested Parties cannot transact on the Account or access the Account online.

Yes. The additional amount is equal to the lesser of the following:

• Account Owner’s annual gross wages, or
• U.S. Department of Health and Human Services Poverty Guidelines amount for a one-person household in the Account Owner’s state of residence*

Additional contribution amount does not apply if the Account Owner is already contributing to their retirement through:

• A defined contribution plan
• An Annuity contract
• An eligible deferred compensation plan

^*U.S. Department of Health and Human Services Poverty Guidelines change annually

Contributions come from any source: the Account Owner, family, friends, inheritances, fund-raisers, insurance settlements, crowd funding, and third parties. Ugift ABLE is an easy way for third parties to make gift contributions directly into the Account.

Ugift® is a feature of your ABLE Account that allows friends and family to contribute to your savings in lieu of traditional gifts. It is simple to use – just log in to your Account to find your code and share it with friends and family, who can use it at UgiftABLE.com to contribute directly into your Account. Learn more by reading our Ugift ABLE FAQ.

Nevada does not impose a State income tax on individuals. Account Owners should consult a qualified tax adviser regarding the application of Nevada tax rules and other states’ tax rules to their particular circumstances.

Yes. A rollover from a College 529 Plan into an ABLE Account can be made for the same individual or for a member of the family of the 529 college savings account beneficiary. The maximum rollover amount per year is $19,000, subject to other contributions made to the Account during the calendar year. If you plan to contribute via a Rollover, the College 529 Plan from which you are transferring funds may restrict or prohibit such a transfer of funds or impose charges. You should investigate this option thoroughly before requesting such a transfer, and you should consider consulting with a tax or investment professional to determine the tax applicability to your scenario.

Yes. Depending on your adjusted gross income, the amount of the Saver’s Credit can be 50%, 20%, or 10% of contributions made to an ABLE Account of which you are the designated beneficiary. Rollover contributions do not qualify for this credit. The maximum contribution amount that may qualify for the credit is $2,000 ($4,000 if married filing jointly), making the maximum credit $1,000 ($2,000 if married filing jointly). See Form 8880, Credit for Qualified Retirement Savings Contributions, for more information.

No, an ABLE account does not shield income for benefit-eligibility. There is no change in the way the income of the ABLE Account Owner is counted by means-tested benefit programs. Employment earnings are still counted as earned income or in terms of substantial gainful activity (SGA) and are taken into consideration when determining eligibility for certain public benefits.

These are contributions of a specific amount made automatically into an account on a custom frequency basis. For example, you can set up recurring contributions of $25 per month. This makes the process of saving very simple.

Yes. Housing expenses and housing-related expenses, including mortgage, rent, real property taxes, heat, fuel, gas, electric, water, sewer and garbage services. For SSI recipients, withdrawals and payment for housing expenses must occur within the same month. If the withdrawal is retained into the following month or months, it is counted as a resource by SSI and means-tested benefit programs.

Withdrawals can be made online, by completing a withdrawal form, or by calling the Plan’s dedicated Client Services phone number. For Accounts invested in the Checking Option, withdrawals can also be made using the Fifth Third Bank debit card and checks. Some of these withdrawal options may not be available if any legal restrictions apply.

Not at the time of the withdrawal. Annually, the total amount of withdrawals will be reported to the IRS and the date and amount of each withdrawal will be reported to the Social Security Administration. If either entity wants to verify the expenses, it is recommended that you keep detailed records.

In the event of the death of an Account Owner, the funds from an Account can be used by the estate to pay any outstanding Qualified Disability Expenses, including funeral and burial costs. If the Account Owner was receiving Medicaid benefits, Medicaid may file a claim for a payback upon the Account Owner’s death after any outstanding Qualified Disability Expenses have been paid for from the Account. The Medicaid recovery is calculated from the date the Account Owner opened the ABLE Account. If Medicaid does not recapture, then the funds go to the estate of the individual or can be transferred to a Successor Account Owner.

ABLE Account investment earnings grow - “tax deferred” – no federal income taxes until withdrawn from the ABLE Account and are “tax free” – no federal income tax is owed– when withdrawn from the ABLE Account and used for Qualified Disability Expenses.

This automatically moves funds from one Investment Option to another.

This is a way of making automatic withdrawals, such as when you would like to use your Account to make payments each month. You can make systematic withdrawals to the bank listed on your Account, by mail to your address, or to a third party.