What does ABLE mean?
ABLE stands for the Stephen Beck, Jr., Achieving a Better Life Experience Act of 2014 and refers to savings and investment accounts that eligible people with disabilities can own for the purpose of financing qualified expenses.
Do I have to live in Illinois to open an IL ABLE account?
No. Any eligible individual may open an IL ABLE account no matter what state you live in. However, before enrolling in any other state’s ABLE plan you should consider your state’s plan first in case there are tax or other advantages to opening an account in your state. For example, Illinois taxpayers can contribute to any IL ABLE account and take a state tax income tax deduction – up to $10,000 if filing as an individual or $20,000 if filing jointly. Consult with a tax advisor to discuss your specific situation.
I’m on public benefits. Will I lose them if I have an IL ABLE account?
No. You will not lose, or lose eligibility for, federal benefits including SSI, SSDI, Medicaid and HUD. If you are an SSI recipient, you can save up to $100,000 in your IL ABLE account and still receive your monthly SSI benefits. See the Plan Disclosure Documents for important details.
How much can I contribute to my IL ABLE account?
The annual contribution limit, in total, to an IL ABLE account is $16,000 per calendar year. This amount includes all contributions from Account Owners, family members, friends and other third parties. If an Account Owner is working, he or she may be able to contribute an additional amount. See the Plan Disclosure Documents for important details.
Who can contribute to my IL ABLE account?
Anyone, including you, your friends, family members, business, employer, trust, corporation, or other legal entity can contribute to your account. No matter who contributes, you, the Account Owner or Authorized Individual, retain control over the account.
I am working and earning income – can I contribute more than the $16,000 limit?
Yes! ABLE Account Owners who earn income may exceed the annual $16,000 contribution limit if they are not already contributing to their retirement through an employer’s defined contribution plan, annuity contract or an eligible deferred compensation plan. See the Plan Disclosure Documents for important details.
Are there tax benefits for Illinois taxpayers for contributing to an IL ABLE account?
Yes! Illinois taxpayers who contribute to any IL ABLE account can take a state income tax deduction – up to $10,000 if filing as an individual or $20,000 if filing jointly. Consult with a tax advisor to discuss your specific situation.
What are qualified disability expenses?
These are any expenses that are incurred as a result of living with a disability and are intended to improve your quality of life, health and provide greater independence. The U.S. Department of the Treasury has indicated that qualified disability expenses can be construed broadly to include basic living expenses and include things like education, personal support services, assistive technology, transportation, housing, job coaching and more.
Do I have to prove that withdrawals are for qualified disability expenses?
Not at the time of the withdrawal. Annually, IL ABLE will report the total amount of your withdrawals to the IRS and the date and amount of each of your withdrawals to the Social Security Administration. In case either entity wants to verify the expenses, it’s recommended that you keep detailed records.
What savings and investment options can I choose?
You may choose among any combination of six risk-based investment options and an FDIC-insured interest-bearing checking account option with a debit card provided through Fifth Third Bank, N.A.
How much will it cost to open an IL ABLE account?
There is no fee to open an IL ABLE account. And, your account can be opened with an initial contribution of just $25.
How often can I change the investments in my IL ABLE account?
Twice per calendar year. However, you can change your investment options for any NEW contributions at any time.
Are there fees charged to an IL ABLE account?
Yes. The quarterly account maintenance fee is $15 per quarter, reduced to $11.25 per quarter for electronic delivery of statements and confirmations. Additionally, there are annual asset-based fees on the six risk-based investment options, ranging from 0.32% to 0.35% depending on the option. For the Fifth Third checking account option, there is a monthly service fee of $2.00, which is waived if you select e-delivery of your account statements or have an average monthly balance of at least $250.
Can I roll over a 529 College Savings account into my IL ABLE account?
Yes. A rollover from a 529 College Savings account, such as Bright Start, into an IL ABLE account can be made for the same beneficiary or for a member of the family of the 529 College Savings account beneficiary. The maximum rollover amount per year is $16,000. For more information, consult the IL ABLE Plan Disclosure Documents.
Can I have a special needs trust and an IL ABLE account?
Yes. An Account Owner can have an IL ABLE account AND be the beneficiary of a special needs trust. Circumstances and requirements vary. Consult a tax or legal professional for more information.
Can I have more than one ABLE account?
No. You're limited to one ABLE account with one program, no matter where you live. If you roll your account over from one ABLE plan to another, you must close the account from which the funds are withdrawn within 60 days of the withdrawal in order to comply with the one-account per owner rule.
Can my IL ABLE account be transferred to another Account Owner?
Yes. Any ABLE account can be transferred, without tax consequence, if the new Account Owner is a sibling of the old Account Owner and is eligible to own an ABLE Account.
What about Medicaid recovery, sometimes called “Medicaid claw back”?
Under Illinois state law, the Illinois state Medicaid agency is not permitted to recover certain benefits from an IL ABLE account upon the death of the Account Owner. However, federal law gives the Illinois state Medicaid agency authority to recover other kinds of benefits upon the death of an IL ABLE Account Owner after funeral, burial and outstanding disability expenses are paid. Check with your benefits specialist about your specific circumstances.
What is Ugift® and how do I use it?
Ugift is a feature of your IL ABLE account that allows friends and family to contribute to your savings in lieu of traditional gifts. It’s simple to use – just log into 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 IL ABLE account. Learn more at www.ugiftable.com/.