The answers below might be able to help.
The answers below might be able to help.
Opening an Account
Savings and Investment Options
Comparison to Special Needs Trust
The Stephen Beck, Jr. Achieving a Better Life Experience (ABLE) Act, a federal law enacted in December 2014, authorizes each state to establish a program that offers tax-free savings and investment options to encourage individuals with a disability and their families to save private funds to support health, independence, and quality of life.
Money contributed to an account in one of these programs is generally disregarded when determining eligibility for federal benefit programs, such as Supplemental Security Income (SSI) and Medicaid.
“529A” refers to Section 529A of the Internal Revenue Code. This is the legal framework for many of the specific rules of an ABLE United account.
In addition, Section 529A provides for the federal income tax exemption for earnings in an ABLE United account.
The ABLE United Program is the qualified ABLE program offered by the state of Florida.
The Program is administered by Florida ABLE, Inc. a direct-support organization of the Florida Prepaid College Board (Board).
The Board, established in 1987, oversees approximately $15 billion in collective investments in the Stanley G. Tate Florida Prepaid College Program and the Florida 529 Savings Program.
There are three eligibility criteria for opening an ABLE United account:
For the purposes of ABLE United account eligibility, the disability and severity requirements refer to the Social Security Administrations definition for a child with a disability and blindness – regardless of the current age of the individual opening an ABLE United account.
Disability (Child under 18): A medically determinable physical or mental impairment that results in marked and severe functional limitation(s), and which can be expected to result in death, or has lasted or can be expected to last for a continuous period of not less than 12 months.
Blindness: vision, with use of a correcting lens, which is 20/200 or less in the better eye or tunnel vision of 20 degrees or less.
The Internal Revenue Service categorizes eligible disabilities as follows:
Current age is not considered when opening an ABLE United account – except that the account must be opened by an adult 18 years of age or older.
The onset of the disability must have occurred before the individual’s 26th birthday.
No. ABLE United accounts allow individuals with a disability and their family to save private funds tax-free, much like a Roth IRA (Individual Retirement Account) or 529 college savings account.
Money in an ABLE United account is generally disregarded when determining eligibility for government benefit programs but an individual need not receive disability benefits to be eligible to open an ABLE United account.
An ABLE United account is disregarded when determining federal benefit eligibility with the following two exceptions for individuals receiving Supplemental Security Income (SSI):
There is no impact on Medicaid benefits, regardless of how much money is in the ABLE United account, even if SSI benefits are reduced or suspended due to the ABLE United account.
In general, ABLE accounts are expected to be disregarded from consideration by state benefit programs, with the exceptions addressed above. To determine whether your specific state benefits may be impacted, please contact your provider.
Qualifying for and opening an ABLE United account does not, by itself, allow an individual to qualify for any disability benefit program.
However, since funds in an ABLE United account are generally disregarded when determining eligibility for disability benefit programs, contributing money into an ABLE United account will reduce countable assets considered for benefit eligibility and may help an individual qualify for a program that they were otherwise not qualified for based on countable assets.
The individual with a disability is the owner of the ABLE United account and may manage the account independently.
However, if the individual is not able, or chooses not, to establish or manage the account, a parent, legal guardian or someone authorized by the individual may establish and oversee the account.
No. The individual with a disability owns all money in the ABLE United account – including money contributed by a third party.
While the individual may have someone assist them, the individual(s) assisting do not have any ownership interest in the account.
The account is to be managed exclusively for the benefit of the individual with a disability.
There is no application fee or monthly or annual maintenance fee. If an account holder wishes to receive paper statements, there is a $10 annual fee accessed at the beginning of each year or proportionally at the time an account is opened.
Additionally, each account will be assessed basis point fees. These fees are net of returns and are less than $3/year per $1,000 in the account
You may open an ABLE United account quickly and easily online at www.ableunited.com.
Enrollment may be completed by the individual with a disability or someone with legal authority over the individual, such as a parent or legal guardian.
For the individual with a disability, the following is required:
For an individual opening the account on behalf of the individual with a disability, the following is required:
You may also need:
To support an efficient enrollment process, source documents are not required by the ABLE United Program. A completed application represents a certification, under penalties or perjury, that the individual is eligible to open an account.
Individual with disability may have only one ABLE account at a time.
If an ABLE account is established for an individual with a disability who already has an ABLE account in existence, the additional account will not be treated as an ABLE account.
The exception is a rollover where the ABLE account from which the funds were rolled is closed within 60 days.
Yes, an individual can manage more than one ABLE Account on behalf of multiple individuals.
Anyone may contribute to an ABLE United account on behalf of the individual with a disability, including the individual, an organization, friends and family. Contributions are considered a completed gift.
Contributions may be made to an ABLE United account by check or electronic payment, including the option for automatic contributions from a linked checking or savings account. A gifting event can be setup under account login under the eGift tab. This will allow for third parties to contribute electronically. Third parties can also use this Gift Certificate.
The individual with a disability and others contributing on their behalf, may contribute up to $14,000 in total to an ABLE Account each year.
Contributions are not allowed if and when the account balance is at, or above, $418,000.
No. Contributions do not reduce the taxable income of the contributor. Contributions are made with after-tax dollars, much like a Roth IRA (Individual Retirement Account) or a 529 college savings account
Contributions made to an ABLE United account are generally not considered an asset to the individual with a disability for the purposes of federal means-testing. However, if a third-party provides money to the individual with a disability, rather than a direct contribution to the ABLE United account, that money may be considered an asset of the individual until it is transferred to the ABLE United account.
Contributions made directly to an ABLE United account from a third-party are not considered income to the individual with a disability; rather, contributions are considered completed gifts.
ABLE accounts can accept contributions from Special Needs Trust. Please consult your Special Needs Trust documents, or consult with an attorney or your trustee. Transferring funds from a Special Needs Trust to an ABLE United account may be beneficial. When compared to a Special Needs Trust, an ABLE United account:
Yes, you may transfer funds from your 529 College Savings Account to your ABLE United Account or a family member’s ABLE United Account.
529 College Savings Account rollover funds count toward the $15,000 maximum annual contribution limit.
For more information, see the College Saving Account to ABLE United Rollover Form or call customer service at 1-888-524-ABLE(2253).
The ABLE United Program offers multiple savings and investment options with varying degrees of investment risk.
An individual with a disability, or an authorized person on their behalf, may choose the most appropriate option(s).
The underlying savings and investment products for each investment option are managed by professional investment management firms selected by the ABLE United Program based on investment philosophy and strategy; performance history; and organizational experience and financial stability.
The ABLE United Program offers three portfolio options structured to align with an individual’s risk tolerance.
For participants that prefer to create their own portfolio, the ABLE United Program offers the following individual options.
The ABLE United Program cannot provide tax or investment advice. The U.S Securities and Exchange Commission provides general investment guidance which includes:
For more information visit: www.investor.gov/investing-basics.
lease consult your investment adviser to discuss your specific situation and options.
Yes. The distribution of money between investment options is called an allocation.
For new contributions, you may change the allocation at any time.
For money that is already in an ABLE United account, the allocation of the account balance may be modified up to two times per calendar year.
Money in an ABLE United account may be withdrawn at any time and for any reason via electronic transfer or check.
If the money is spent on one of the following Qualified Disability Expenses, which are intended to include “living expenses” and are not required to be medically necessary, the earnings on the money withdrawn is tax-free:
No. The ABLE United Program does not approve withdrawals from an ABLE United account.
Money may be withdrawn from an ABLE United account at any time and for any reason.
Each year, the ABLE United Program will report the total amount of distributions to the Internal Revenue Service (IRS) as part of our annual tax reporting.
The IRS may investigate the distributions from an ABLE United account to determine whether a withdrawal was for a Qualified Disability Expense.
In addition, each month, the ABLE United Program will report the date and amount of each distribution from an ABLE United account to the Social Security Administration.
If the individual with a disability receives Supplemental Security Income (SSI), Social Security Disability Insurance (SSDI) or Medicaid, the Social Security Administration may investigate any distribution to determine whether the withdrawal was for a Qualified Disability Expense.
In general, we recommend that documents and information adequate to justify each expense as qualified be retained by the individual or person administering the ABLE United account on their behalf.
If money is withdrawn from an ABLE United account to pay a non-qualified expense, the earnings portion of the withdrawal (only the earnings) will be considered income to the individual with a disability, taxed at the individual’s federal income tax rate, and will be assessed an additional 10% penalty.
In addition, the funds withdrawn will be considered an asset to the individual with a disability. The treatment of the withdrawal as an asset and the earnings as income may result in a reduction or suspension of federal disability benefits.
Federal law requires that each state recover Medicaid expenditures from a Medicaid recipient’s estate. Federal law also allows for a state to recover Medicaid expenditures from an ABLE United account.
Effective July 1, 2018 through June 30, 2019, except as required by federal law, the Florida Medicaid program may not file a claim for Medicaid recovery of funds in an ABLE account during this time period. Upon the death of a designated beneficiary, funds in the ABLE account must first be distributed for qualified disability expenses then transferred to the estate of the designated beneficiary or an ABLE account of another eligible individual specified by the designated beneficiary.
For more information on Medicaid estate recovery, visit Florida’s Medicaid Estate Recovery Program here.
An ABLE United account may be used as a complement, or alternative, to a Special Needs Trust.