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VA resident benefits

The ABLEnow Program allows eligible individuals to save for qualified disability expenses on a tax-advantaged basis without jeopardizing eligibility for federal means-tested benefits, such as Supplemental Security Income and Medicaid.

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OVERVIEW

Program type

ABLE Savings plan

Investment manager

Underlying mutual funds managed by Vanguard and Fidelity; Deposit Account maintained by PNC Bank

Inception

2016

State agency

Commonwealth Savers Plan

Program manager

Commonwealth Savers Plan

MORE INFORMATION

Eligibility

State residency requirements:

Who can be a participant/owner in the program?

The account owner must be an eligible individual for whose benefit all contributions are made.

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?

VA residents can claim a tax deduction for contributions to a VA 529 plan.
Up to $4,000/yr ($4,000/yr for single filers) per year are eligible.
529 plan contributions grow tax-free.
Withdrawals are tax-free when used to pay for qualified higher education expenses.
You can contribute as much as you want, as often as you want.
The key is to get started. Enroll today by completing a quick form online.

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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 lifetime account limit of $550,000, at which point no new contributions may be made.

Minimum contributions:

There is no minimum initial contribution amount or minimum subsequent contribution amount, however the first $2,000 will be held in the deposit account and only additional funds may be allocated to other investment options.

Investment Options

Target-Risk Options:

Select among 3 portfolio options: Aggressive Growth, Moderate Growth, and Conservative Income

Bank Money Market Investment / Checking Option:

Money Market investment option, as well as an ABLEnow deposit account

Fees & Expenses

Enrollment or application fee:

None

Account maintenance fee:

$3.25/monthly

Program management fees:

0.10% and 0.15% on investment balances for the ABLEnow and PNC Administrative Fees, respectively

Expenses of the underlying investments:

Ranges from 0.11% to 0.14%, depending on the selected investment option

Total asset-based expense ratio:

0.36% - 0.39%, depending on the selected investment option

Fees or restrictions on the number of disbursements

Although there is no limit on the number of transactions (contributions/withdrawals) that can be requested and processed by the account custodian on behalf or an owner, the account dustodian reserves the right to limit the frequency and minimum dollar amount of withdrawals.

Taxes and other Benefits

Program match on contributions:

None

State tax deduction or credit for contributions:

A Virginia individual income tax deduction of up to $2,000 per account on contributions, with unlimited carryovers to the extent of the contributions. Contributions are fully deductible in the year of contribution for taxpayers at least 70 years of age.

State tax recapture provisions:

None

State definition of qualified expenses

Qualified Disability Expenses include any expenses incurred at a time when the Account Owner is an Eligible Individual that relate to the blindness or disability of the Account Owner, and are for the benefit of the Account Owner in maintaining or improving his or her health, independence, or quality of life.

State tax treatment of qualified distributions:

If a qualified withdrawal is made from an account, no portion of the withdrawal, including earnings, may be included in the gross income of the account owner.

State tax treatment of rollovers:

No portion of a rollover may be included in the gross income of the account owner or is subject to the additional 10% federal tax imposed on the earnings portion of certain non-qualified withdrawals.

Medicaid eligibility

The ABLE Act is designed to ensure that the value of any and all assets purchased using funds from an ABLE account that are qualified disability expenses will not count for purposes of determining eligibility for Medicaid, and that once an asset is purchased it will not be subject to further review. The CMS guidance can be found at Implications of the ABLE Act for State Medicaid Programs on the CMS website. Please consult with your state's Medicaid office with any additional questions.

Medicaid recapture provisions

Upon the death of the account owner, IRC Section 529A permits a state to file a claim for the amount of the total medical assistance paid for the account owner 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 account). The amount of the claim is to be paid only after the payment of all outstanding payments due for the qualified disability expenses of the account owner and is to be reduced by the amount of all premiums paid by or on behalf of the account owner to a Medicaid Buy-In program under that state's Medicaid plan.

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

A card issued by PNC to access funds available in the ABLEnow Deposit Account

Statutory protection of an account from creditors:

Did you know?

Residents are not limited to investing in their own state's 529 plan.
Another state may offer a plan that performs better and has lower fees.
The 529 plan chosen does not affect which state the student enrolls in.
You can live in New York, open a plan from Nevada and send a student to college in Florida.
The best way to maximize your college savings?
Start early and save often. You can get started today with easy online enrollment.

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Distributions & Terminations

To whom are distributions made payable:

Account owners or authorized representatives can withdraw money from an account by using their ABLEnow Debit Card. Cash withdrawals are not permitted.

Account Changes

Policy regarding participant/owner changes:

Funds can be moved upon an account owner change to an eligible individual who is a member of the family.

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:

http://www.able-now.com/

Telephone:

1-844-669-2253

Twitter

https://twitter.com/ABLEnowVA

Social Media

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