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Texas ABLE

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TX resident benefits

The Texas Achieving a Better Life Experience (Texas ABLE) Program was established to encourage and assist individuals with disabilities and their families in saving funds to pay for many disability-related expenses critical to maintaining the individuals' health, independence, and quality of life. The Texas ABLE Program is established and maintained by the Texas Prepaid Higher Education Tuition Board with assistance from the Texas Comptroller of Public Accounts.

OVERVIEW

Program type

ABLE savings plan

Investment manager

Aon Hewitt Investment Consulting, Inc.

Inception

2018

State agency

Texas Prepaid Higher Education Tuition Board with assistance from the Texas Comptroller of Public Accounts

Program manager

Orion Advisor Solutions, Inc.

Manager contract term

MORE INFORMATION

Eligibility

State residency requirements:

Yes

Who can be a participant/owner in the program?

An account may be opened by an eligible individual under section 529A or his/her authorized individual with legal guardianship or power of attorney.

Program restrictions:

To be eligible for an ABLE savings plan, an individual must be a Texas resident, 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.

Contributions

Maximum contributions:

Annual contribution limit is currently $17,000 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 2023, this amount is $14,580. 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.

There is also a maximum account balance limit of $500,000. However, assets can grow beyond $500,000 due to investment earnings without violating the maximum account balance limit.

Minimum contributions:

Initial contribution of $50 and subsequent contribution minimum of $25.

Does the program offer an e-gifting platform for receiving gift contributions?

We have designed a special gifting tool that makes it easy for family and friends to make gifts into your account. From your online account, you can create an eGift event. You will add the email addresses of your friends and family members. We will send out an email to them with a unique link and a personalized message, instructing them on how to make a gift to your account.

Investment Options

Target-Risk Options:

Select among three Managed Allocation Options: Aggressive, Moderate, and Moderately Conservative.

Bank Money Market Investment / Checking Option:

The Bank Savings Account Option invests in an FDIC-insured savings account held at Bank of the West.

Fees & Expenses

Enrollment or application fee:

None

Account maintenance fee:

$42.00 annually, $3.50 assessed monthly

Program management fees:

0.15% Program Mangement Fee, 0.10% State Administrative Fee

Expenses of the underlying investments:

0.14% to 0.40%; none for the Bank Savings Account Option

Total asset-based expense ratio:

0.25% - 0.65%

Fees or restrictions on the number of disbursements

$1.00 fee for each withdrawal by ACH in excess of two (2) per month

Taxes and other Benefits

Program match on contributions:

None

State tax deduction or credit for contributions:

N/A; Texas does not impose a state income tax on individuals.

State tax recapture provisions:

N/A; Texas does not impose a state income tax on individuals.

State definition of qualified expenses

State tax treatment of qualified distributions:

N/A; Texas does not impose a state income tax on individuals.

State tax treatment of rollovers:

N/A; Texas does not impose a state income tax on individuals.

Medicaid eligibility

Under the ABLE Act, funds in a Texas ABLE account should be disregarded (i.e., treated as an excluded resource) for purposes of determining eligibility for Medicaid benefits.

Medicaid recapture provisions

Under Section 529A, following the death of the beneficiary, any state may be required to file a claim against the beneficiary or the Texas ABLE account itself for the amount of the total medical assistance paid for the beneficiary under the state's Medicaid plan after the establishment of the account (or any ABLE account from which amounts were rolled or transferred to the Texas ABLE account). The amount paid in satisfaction of such a claim is not a taxable distribution from the TEXAS ABLE account.

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

The U.S. Bank Focus Card (“Focus Card”), a reloadable prepaid debit card, is a simple and fast way for Texas ABLE account owners to access funds to pay for qualified disability expenses on the go or online. The Focus Card is not a credit card that extends credit or a debit card that draws directly from your Texas ABLE account. The Focus Card is a prepaid debit card that is funded by withdrawals you initiate on your Texas ABLE account. There is no cost to enroll in the Focus Card program. The Texas ABLE® Program will charge $1.00 for each withdrawal by ACH in excess of two (2) per month from your Texas ABLE account. Making a withdrawal to the Focus Card is considered an ACH withdrawal.

Statutory protection of an account from creditors:

Distributions & Terminations

To whom are distributions made payable:

The designated beneficiary, or, if one has been named, an authorized legal representative, may direct withdrawals from an account.

Account Changes

Policy regarding participant/owner changes:

A change in the designated beneficiary of an account is not treated as a distribution and is not subject to federal gift or GST taxes if the new designated beneficiary is an eligible individual and a member of the family. However, if the new designated beneficiary is not a member of the family, the change is treated as a non-qualified withdrawal by the current designated beneficiary and may have federal gift tax or GST tax consequences.

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:

Contact

Website:

https://www.texasable.org/

Telephone:

844-489-2253

Email:

customerservice@texasable.org

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