Tax bill update
Yes. On December 22, 2017, President Trump signed H.R 1, the Tax Cuts and Jobs Act, into law. Three provisions in the tax reform bill impact Section 529A (ABLE) savings plans. Please consult with your state ABLE administrator for information on how the legislation will impact the state's ABLE program. In addition, please consult with your tax advisor for more specific guidance tailored to your situation.
No. However, you should have a record of the doctor's signed diagnosis, a benefits verification letter from the Social Security Administration or other relevant documentation for account verification, as needed.
No. You're limited to one ABLE account, except in the case of a rollover from another qualified ABLE program. This extends beyond Colorado ABLE to include accounts in other ABLE programs.
The annualized investment costs on assets per investment option range from 0.34% to 0.38%, depending on which investment option(s) you select. Each Account is charged an account maintenance fee of $15 each quarter. This fee can be discounted by $3.75 if you select email delivery for statements and confirmations.
For the checking account option provided through Fifth Third Bank, there is a monthly service fee of $2.00. This fee is waived if your account has an average daily balance over $250 or if you are enrolled in electronic statement delivery with respect to the Checking Option. Other typical banking charges may apply, such as a fee for using out-of-network ATMs. Please see the Plan Disclosure for details.
Using your account
Up to $15,000 per year. No further contributions may be made until the start of the next calendar year. Account balance limit: $400,000.
Yes - ABLE account owners who earn income may exceed the annual $15,000 contribution limit. The additional annual contribution amount allowed is equal to the federal poverty level for a one-person household (in your state of residence) or the account owner's gross wages, whichever is less. Individuals may not be eligible if they are already contributing to:
• a defined contribution plan
• an annuity contract
• an eligible deferred compensation plan
Account Owners should keep adequate records to ensure the limit is not exceeded. Any increase in contributions could impact tax obligations, so consult a tax advisor before making any such increase. If you are eligible, fill out the Self Certification form.
Absolutely. Anyone can contribute directly to your account. No matter who contributes, you, the account owner or authorized individual, retain control over the account. Friends and family can make contributions into the account.
Yes, Social Security and SSI monthly benefit payments can be directly deposited into ABLE accounts because they are considered acceptable types of financial accounts.
These are contributions of a specific amount made automatically into your account on a custom frequency basis. For example, you can set up recurring contributions of $25 per month. This makes the process of investing very simple.
Not at the time of the withdrawal. Annually, Colorado 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 the event that either entity wants to verify the expenses, it’s recommended that you keep detailed records.
In the case of a rollover to an ABLE account for the same account owner, the account from which the funds are withdrawn must be closed within 60 days of the withdrawal.
This is a way of making automatic withdrawals, such as when you'd like to use your account to make payments each month. You can make systematic withdrawals to the bank listed on your account, by mail to your address, or to a third party.
An asset or item purchased with the hope of a gain in the future.
Twice per calendar year. You can change your investment options for any NEW contributions at any time.
This automatically moves funds from one investment option to another.
¹ Earnings non-qualified withdrawals may be subject to federal income tax and a 10% federal penalty tax, as well as applicable state and local income taxes.
² Please see the Plan Disclosure Documents for complete details on SSI suspension and any requirements on when you use the funds, to prevent suspension of benefits.
³ Upon the death of the designated beneficiary, all amounts remaining in the qualified account not in excess of the amount equal to the total medical assistance paid for the designated beneficiary after the establishment of the account, net of any premiums paid from the account or paid by or on behalf of the beneficiary to a Medicaid Buy-In program under any state Medicaid plan established under title XIX of the Social Security Act, shall be distributed to the state that made such payments upon filing of a claim for payment by such state.