529 PLANS

The NC ABLE Program

North Carolina

NC ABLE is offered through the National ABLE Alliance. NC ABLE was established within the North Carolina Department of State Treasurer to enable qualified individuals to save and invest, without losing means-tested benefits and supports. Funds in an NC ABLE account that are used for qualified disability expenses are tax-advantaged and are not considered income for means-tested benefits such Medicaid and Social Security Income.

General

Program type:

ABLE Savings plan

How to enroll:

Enroll directly with the program

Initial year of operation:

2017

State agency(ies):

North Carolina Department of State Treasurer

Program manager:

Ascensus

Manager contract term:

PRO Premium subscription required for this data.

Investment Manager

Underlying mutual funds and ETFs managed by BlackRock, Schwab, and Vanguard. Sallie Mae Bank provides the high yield savings account.

Eligibility

State residency requirements:

No

Who can be a participant/owner in the program?

An account owner must be an eligible individual under Section 529A as well as a U.S. Citizen or resident alien with a SSI/TIN number and valid permanent U.S. street address.

Program restrictions:

To be eligible for an ABLE savings plan, an individual must have been diagnosed with a disability before age 26, and be eligible to receive benefits under Supplemental Security Income (SSI) and/or Social Security Disability Insurance (SSDI). Individuals who are not receiving SSI and/or SSDI may still be eligible if they meet the age requirement and have been diagnosed by a licensed physician and received a letter of certification.

Contributions

Maximum contributions:

The member plan's annual contribution limit is currently $14,000 per account owner from all sources. No additional contributions may be made for the benefit of an account owner when the fair market value of the account exceeds the account balance limit of $450,000. Accounts that have reached the account balance limit may continue to accrue earnings, although future contributions may not be made to such accounts. If however, the market value of such account falls below the account balance limit due to market fluctuations and not as a result of withdrawals from such account(s), additional contributions will be accepted.

Minimum contributions:

The initial and additional contribution minimum is $25.

Investment Options

Target-Risk Options:

Select among 6 portfolio options: Aggressive Option, Moderately Aggressive Option, Growth Option, Moderate Option, Moderately Conservative Option, or Conservative Option.

Bank Money Market Investment / Checking Option:

There is no money market option, but there is a checking account with debit card option.

Fees & Expenses

Enrollment or application fee:

None

Account maintenance fee:

$15 quarterly, reduced by $3.75 if owner elects to receive electronic statements and confirmations

Program management fees:

0.32% for all investment options

Expenses of the underlying investments:

Ranges from 0.02% to 0.06%, depending on the selected investment option

Total asset-based expense ratio:

0.34% - 0.38%, depending on the selected investment option

Fees or restrictions on the number of disbursements

None, but a $25 fee applies to all outgoing wires and priority delivery service

Taxes and other Benefits

Program match on contributions:

None

State tax deduction or credit for contributions:

None

State tax recapture provisions:

None

State tax treatment of qualified distributions:

If a withdrawal is taken from an Account to pay for qualified disability expenses, the account owner generally does not have to include as income any earnings attributable to that withdrawal for the applicable taxable year if the total withdrawals for that year are less than or equal to the total withdrawals for qualified disability expenses for that year.

State tax treatment of rollovers:

North Carolina follows federal tax-free treatment, though tax-free rollovers are restricted to once per 12-month period.

Medicaid eligibility

Balances of $100,000 or less are excluded from account owner's SSI resource limit. Only the amount OVER $100,000 is counted against account owner's resource limit, along with assets held in non-ABLE accounts. If the NC ABLE account causes account owner to exceed the SSI resource limit, then SSI benefits will be suspended until the account balance no longer exceeds the resource limit. Account owners will continue to be eligible for Medicaid, regardless of total account balance.

Medicaid recapture provisions

To the extent provided in subsection 26 U.S.C. 529A (f), upon the death of the account owner, the state shall have a claim for payment from the account owner in an amount equal to the total medical assistance paid for the account owner after the establishment of the account. The State of North Carolina will file its claim for repayment from the account within 60 days of receiving notice from the State Treasurer of the death of the account owner. Any remaining funds in the account owner's account shall be distributed as provided in the plan disclosure documents or distributed to the account owner's estate if no other designation is made.

Is there a debit card/ purchasing card available, and if so, at what cost?

Yes, there are debit card and checking account features available.

Statutory protection of an account from creditors:

PRO Premium subscription required for this data.

Distributions & Terminations

To whom are distributions made payable:

Withdrawals will be sent by check or ACH to the account owner at the address on the account or a third party designated by the account owner.

Account Changes

Policy regarding participant/owner changes:

Accepts requests to transfer account ownership provided the appropriate form and any additional requested documentation is submitted to the plan.

Documents, Access & Reporting

Does participant have online password-protected access to account?

Yes

Can the complete enrollment process including funding be done online?

Yes

Documents and other services accessible or downloadable on the program's public Web site:

PRO Premium subscription required for this data.

Contact

Website:

Click here to visit

Telephone:

888- 609-8915

Email:

ncABLE@nctreasurer.com

Twitter

NCABLEProgram

Facebook

NCABLEProgram

State News

 

Reset email successfully sent.
Please check your inbox.

Close
page loadtime mark

Advertisement


close