New York residents can be considered an eligible individual by meeting one of the following:
IMPORTANT: If an Account Owner’s situation changes in any way causing them to no longer be eligible for a NY ABLE account, it is the responsibility of the Account Owner or Authorized Individual to notify the NY ABLE Program.
The Beneficiary is the eligible individual for whom the ABLE account is opened. The Beneficiary is also the Account Owner. In some cases, a parent or legal guardian or an Authorized Individual can open an account on behalf of the Beneficiary. There can be only one ABLE account per Beneficiary.
No, there are no income and asset limits for beneficiaries to be eligible for an ABLE account. You can meet the eligibility requirement for an ABLE account by possessing a disability certification signed by a licensed physician stating that the individual’s disability meets the “marked and severe” functional limitations standard stated in the ABLE statute.
Yes. ABLE Account Owners who earn income may contribute more to their accounts than the program's annual $15,000 limit. The additional annual contribution is equal to the federal poverty line for a one-person household ($12,880 for the 2021 tax year) or the Account Owner’s income, whichever is less. Working ABLE Account Owners are not eligible to contribute the additional funds if they are already contributing to a retirement plan such as:
Check with a tax advisor regarding your ability to contribute additional earned income if you participate in any of the above retirement plans.
If you have earned income and are eligible, fill out the Earned Income Self Certification form.
No. Eligible individuals are limited to one ABLE account, except during the process of rolling over assets from another Qualified ABLE Program. This one account rule extends beyond NY ABLE to include accounts in all other ABLE programs. In the case of a rollover to an ABLE account for the same Eligible Individual, the account from which the funds are withdrawn must be closed within 60 days of the withdrawal.
Yes. You may find that a special needs trust and an ABLE account work together to meet your disability expense needs. These accounts are structured differently and operate under different regulations. Contact your tax advisor regarding your personal circumstances.
Statements are sent to Account Owners or Authorized Individuals on a quarterly basis. For those who opt into e-delivery for notifications and statements, you will receive a notification to your online account each quarter when statements are available to view. If you are invested in the checking option, you will receive a monthly statement from Fifth Third Bank for the checking option information and activity.
You will not be asked by NY ABLE to prove eligibility. However, you will be required to certify to NY ABLE that you are eligible. It is important to keep a record of a benefits verification letter from the Social Security Administration (SSA), a doctor’s signed diagnosis, or other relevant documentation for eligibility verification, as needed.
A NY ABLE account can be opened by:
Yes, Authorized Individuals opening accounts on behalf of Eligible Individuals must provide proof of their authority to make financial decisions on behalf of the Account Owners.
The minimum contribution amount to open an account is $25 ($15 when investing through a payroll deduction plan).
The minimum contribution, whether to open an account or add to an existing account, is $25 ($15 when investing through a payroll deduction plan).
1“Member of the family" is defined in the Internal Revenue Code Section 529 and includes the original 529 Plan beneficiary's children, siblings, parents, cousins, nieces, nephews, aunts, uncles, grandparents, and spouse.
Contributions can be made by the Account Owner and third parties.
Ugift® is a free-to-use service that lets friends and family contribute to an account using a unique code. Account Owners can opt-in to receive a Ugift® code by logging into their NY ABLE account, which then can be used by the Account Owner’s family and friends to make a gift contribution at any time at Ugiftable.com.
A contribution made automatically from a personal checking or savings account into an ABLE account on a recurring schedule. For example, you can set up monthly recurring contributions of at least $25, or an amount of your choosing. This helps make the process of investing very simple.
Yes. The Account Owner and/or Authorized Individual can direct new contributions to any of the investment options currently available either by updating the standing allocations online or providing written instructions when a contribution check is mailed into NY ABLE. This will not impact the twice per calendar year investment exchange limit.
Ugift® & third-party contributions will be deposited based upon the future allocations.
Up to $15,000 per year. ABLE Account Owners who earn income may contribute more to their accounts than the Program’s annual $15,000 limit. The additional annual contribution is equal to the federal poverty line for a one-person household ($12,880 for the 2021 tax year) or the Account Owner’s annual income, whichever is less. Once the maximum contribution limit is met, no further contributions may be made until the start of the next calendar year. Certain restrictions apply. In addition, the Maximum Account Balance allowed under NY ABLE is $520,000.
Yes. Transferring funds from a 529 Plan account into an ABLE account is considered a rollover not subject to federal or New York state taxes and tax penalties, provided that certain requirements are met. Unless extended, the federal tax benefits allowed by these provisions will expire after December 31, 2025. The contribution must be made to an ABLE account of the same beneficiary of the account in the 529 Plan or to an eligible member of the family (as defined in Section 529 of the Internal Revenue Code) of such beneficiary within 60 days of the date of the withdrawal. The state tax treatment of these rollovers is determined by each individual state. You should consult a tax advisor prior to initiating a rollover.
Your rollover from a 529 plan is subject to the annual contribution limit, currently $15,000 per year, in order to avoid an adverse federal and New York state tax impact.
No, however, in order to avoid adverse tax consequences, the contribution must be made to an ABLE account of the same beneficiary of the 529 plan account or to an eligible member of that beneficiary’s family (as defined in Section 529 of the Internal Revenue Code). The rollover to an ABLE account must be made within 60 days of the date of the withdrawal from the 529 plan account. Section 529 of the Internal Revenue Code lists members of the family as:
To initiate a rollover from a 529 college savings program into NY ABLE, you must open a NY ABLE account and complete an Incoming Rollover Form. Additionally, we must receive an accurate statement issued by the distributing 529 college savings program that reflects both the principal and earnings attributable to the rollover amount. Until this documentation is received, the entire amount of the rollover contribution will be treated as earnings, which is subject to taxation if you take a non-qualified withdrawal from your ABLE account.
Yes, rollovers can be direct or indirect.
Yes, you may rollover funds from your NY ABLE account to an ABLE account in another state’s ABLE program. This process may be direct or indirect (see above under, “Can I move or “rollover” my ABLE account from another state into the NY ABLE Program?” for explanation of each rollover type), depending on the process used by the ABLE program in the state you are rolling your funds into. This transfer may be accomplished for the Account Owner or for a person who is an Eligible Individual and a Member of the Family (as defined in section 529A of the Internal Revenue Code) of the Account Owner. To avoid adverse federal and state income tax consequences and a 10% federal penalty tax, you must complete an indirect rollover within 60 days of the withdrawal, and you cannot have completed a rollover of such ABLE account in the prior 12 month period. Please reach out to the state ABLE program you are rolling funds into for additional details.
ABLE Account Owners are permitted to own only one ABLE account. If you are rolling over an ABLE account for the same Eligible Individual, the entire balance of the ABLE account must be rolled into NY ABLE. A tax-free rollover is restricted to once per 12-month period.
You may rollover all or a portion of an ABLE account into a new account for an Eligible Individual who is a member of the family of the original ABLE Account Owner. For these purposes, a member of the family is defined in Section 529A of the Internal Revenue Code to include a sibling of the eligible individual, whether by blood or by adoption, including a brother, sister, stepbrother, stepsister, half-brother, and half-sister.
Withdrawals may be requested online, by form, or by calling NY ABLE toll-free at 855-5NY-ABLE (855-569-2253). A debit card or check may be used for withdrawals from the Checking Option.
Debit cards may be used for point of sale purchases at retailers or online. You may also withdraw cash from eligible ATMs. Fees may be assessed by Fifth Third Bank for transactions used outside of the Allpoint network. To locate an Allpoint network ATM, please visit https://www.allpointnetwork.com/.
In certain instances, additional documentation may be required before a withdrawal may be processed. Only the Account Owner or his or her Authorized Individual may request withdrawals from an account.
ABLE account funds can be used to pay Qualified Disability Expenses. Qualified Disability Expenses are any expenses Eligible Individuals incur that relate to their blindness or disability and are intended to maintain or improve their quality of life. These expenses include:
The NY ABLE Program will not require proof that withdrawals are for Qualified Disability Expenses. However, NY ABLE will report the total amount of your withdrawals to the Social Security Administration on a monthly basis, and to the Internal Revenue Service on an annual basis. If either entity asks for verification of expenses, it is the Account Owner’s obligation to verify the eligibility of the expenses. We recommended that you keep detailed records.
A systematic withdrawal is a withdrawal you set up to come out of your account on a regular, recurring basis. You can set up your account to make systematic 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 on file, or to a third party.
You may process a withdrawal from any investment option, including the checking option at any time. Withdrawals of contributions made by check, recurring contribution, or EFT will not be available for withdrawal for up to five business days after the date of the contribution. New contributions into the checking option will not be available for withdrawal for up to six business days.
There are no taxes or penalties on a withdrawal from your account as long as withdrawals are used to pay Qualified Disability Expenses (a qualified withdrawal).
Federal and state income taxes and a 10% federal penalty tax will apply to any earnings on non-qualified withdrawals.
If you take a withdrawal from your account and don’t use the money for Qualified Disability Expenses (a non-qualified withdrawal), the earnings portion of the withdrawal will be treated as income and subject to income tax, as well as a 10% federal tax penalty.
The 10% federal penalty tax does not apply to withdrawals that are:
You may choose to direct your contributions to one or any combination of five investment options offered by NY ABLE. Four are asset-allocation options with varying blends of stocks, bonds, and cash – with the combinations ranging from conservative to aggressive. The fifth is an interest-bearing FDIC-insured checking account with a debit card provided through Fifth Third Bank.
You may make an investment exchange of assets already invested twice per calendar year. You can select new investment options for NEW contributions at any time.
Checking Option Fee
Yes, unless your account has a zero balance at the time the fee is assessed. The monthly service charge for the checking option is waived for accounts with average daily balances over $250 or accounts enrolled in electronic statement delivery directly with Fifth Third Bank.
Any remaining funds in your account will be used toward the fee and your account will be closed. You may re-open your account simply by submitting a contribution within six months of the close date.
NY ABLE accounts are an addition to, not a replacement of, government programs and do not affect eligibility for any federal needs-based programs including Medicaid. There is, however, an account balance limitation for Supplemental Security Income (SSI) benefits. Accounts with a balance at or above $100,000 will be considered in determining eligibility for SSI. If an ABLE account causes an Account Owner to exceed the SSI resource limit, then SSI benefits will be suspended until the account balance no longer exceeds $100,000.
There are no federal or New York state income taxes on account earnings when your withdrawals are used for Qualified Disability Expenses.
When an Account Owner dies, any outstanding Qualified Disability Expenses including funeral expenses, may be paid from his or her NY ABLE account assets. Upon notification of an Account Owner’s death, the NY ABLE Program will notify the New York State Department of Health (DOH), which will determine the need for any Medicaid recapture.