What happens if the beneficiary is no longer eligible for an account?

When you no longer qualify, you should log in to your ABLE account, go to settings, and update your eligibility. If the beneficiary meets eligibility requirements for any part of the calendar year, they are considered to be qualified for the entire year. Your account will remain open and the money within it will continue not to be considered an asset. You can continue making contributions until the next calendar year.

Once you no longer meet the eligibility guidelines, all withdrawals will be treated as non-qualified withdrawals. The earnings portion of your withdrawal is subject to income tax and a 10% federal tax penalty. Non-qualified withdrawals may affect eligibility for Supplemental Security Income (SSI) and other federal benefits. The account will close if all the money is withdrawn. No new contributions can be made.

We recognize that sometimes your condition is considered to be a disability by Social Security, and sometimes it is not. You may choose to leave your ABLE account open. When you become eligible again, you can update your ABLE account’s settings and return to making contributions and qualified withdrawals.