General InformationDownload PDF Report
The NC ABLE Program
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.
- Program typeABLE Savings plan
- Investment ManagerUnderlying mutual funds and ETFs managed by BlackRock, Schwab, and Vanguard. Sallie Mae Bank provides the high yield savings account.
- State agencyNorth Carolina Department of State Treasurer
- Tax deduction
- Program ManagerAscensus
- Manager contract termUNLOCK PRO
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.
Did you know?
The plan can be used to pay for qualified disability expenses.
This can include education, job training and support, healthcare and financial management.
Savings in an ABLE account will not impact eligibility to receive government benefits.
The first $100,000 is exempt from the Supplemental Security Income limit, and beneficiaries will continue to receive Medicaid regardless of account size.
Residents are not limited to investing in their own state's ABLE plan.
Another state may offer a plan with better suited investment options, lower fees or preferred features.
Visit this plan's website to learn more
Maximum contributions:Annual contribution limit is currently $15,000 from all sources. If the beneficiary works, the beneficiary can also contribute part, or all, of their income to their ABLE account. This additional contribution is limited to the poverty-line amount for a one-person household. For 2018, this amount is $12,140. The designated beneficiary is not, however, eligible to make this additional contribution if their employer contributes to a workplace retirement plan on their behalf.
ABLE account beneficiaries can qualify for the Saver's Credit based on contributions they make to their ABLE accounts. Up to $2,000 of these contributions may qualify for this special credit designed to help low- and moderate-income workers.
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.
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:$60, assessed at $15 per calendar quarter. The quarterly fee is discounted by $3.75 for account owners who elect to receive statements via electronic delivery.
$2 monthly service charge for investments in the Checking Option, waived for accounts with an average daily balance of more than $250.
Program management fees:0.32%; none for the Checking Option
Expenses of the underlying investments:Ranges from 0.02% to 0.05%, depending on the selected investment option
Total asset-based expense ratio:0.34% - 0.37%, depending on the selected investment option
Fees or restrictions on the number of disbursementsNone, but a $25 fee applies to all outgoing wires and priority delivery service
Taxes and other Benefits
- Tax deduction for single filersNone
- Tax deduction for joint filersNone
North Carolina doesn't offer tax deductions
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 eligibilityBalances 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 provisionsTo 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:UNLOCK PRO
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