Qualified Expenses

Money in your ABLEnow account may be used to pay for Qualified Disability Expenses. An expense is “qualified” if:

1. You incurred the expense at a time you were considered an “Eligible Individual;”
2. The expense relates to your blindness or disability; and
3. The expense helps you maintain or improve your health, independence or quality of life.

Each person is unique and the needs of individuals can vary depending on the disability, circumstances and specific treatment.

ABLEnow accounts may be used to pay a variety of expenses related to maintaining the Eligible Individual’s health, independence and quality of life. Examples of Qualified Disability Expenses include, but are not limited to:

• Education
• Housing
• Transportation
• Employment training and support
• Assistive technology and related services
• Health
• Prevention and wellness
• Financial management and administrative services
• Legal fees
• Expenses for oversight and monitoring
• Funeral and burial
• Basic living expenses
• Other expenses approved by the Secretary of the U.S. Treasury

No. Money may be withdrawn from an ABLEnow account at any time and for any reason.

It is up to you to track how you spend the money in your ABLEnow account.

Each year, ABLEnow will report the total amount of distributions to the Internal Revenue Service (IRS) as part of annual tax reporting. The IRS may investigate the distributions from an ABLEnow account to determine whether a withdrawal was for a Qualified Disability Expense.

In addition, ABLEnow will report to the Social Security Administration the date and amount of each distribution from an ABLEnow account. If the individual with a disability receives Supplemental Security Income (SSI) or Medicaid, the Social Security Administration may investigate any distribution to determine whether the withdrawal was for a Qualified Disability Expense.

For this reason, we strongly recommend that you keep records and receipts on how you are spending the money in your ABLEnow account.

If money is withdrawn from an ABLEnow account to pay a non-qualified expense, the earnings portion of the withdrawal will be treated as income, taxed at the designated beneficiary’s tax rate, and will be subject to a 10% federal tax penalty. In addition, any state tax deductions or credits taken in previous years related to contributions may need to be recaptured. Please check your state tax department for more information on recapture requirements.

Additionally, any non-qualified funds you withdraw could be counted against you for purposes of determining your eligibility for means-tested public benefits programs.