maryland-able

Important Definitions

Throughout this Disclosure Booklet you will see capitalized terms. The capitalization means that the definition of the term is included in this Section.

ABLE Account

An account opened in a qualified ABLE program and owned by an Eligible Individual as defined in Section 529A of the Internal Revenue Code.

Authorized Legal Representative

An ABLE Account may be established by a person selected by the Beneficiary to serve as their Authorized Legal Representative, or if the Beneficiary is unable to establish their own ABLE Account, one may be established on their behalf by an Authorized Legal Representative. If an Authorized Legal Representative establishes an ABLE Account for a Beneficiary unable to establish their own ABLE Account, the Authorized Legal Representative must self-attest/certify to their right to serve as an Authorized Legal Representative. According to Internal Revenue Service ("IRS") guidance, an Authorized Legal Representative may neither have, nor acquire, any beneficial interest in the ABLE Account during the Beneficiary's lifetime and must administer the ABLE Account for the benefit of the Beneficiary. Whenever an action is required to be taken by a Beneficiary in connection with an ABLE Account with an Authorized Legal Representative, it must be taken by the Beneficiary's Authorized Legal Representative acting in that capacity. See the Opening Your ABLE Account – Persons Authorized to Open Your ABLE Account section for more information about who may serve as an Authorized Legal Representative.

Bank

The Bank of New York Mellon.

Beneficiary or You

You, the Beneficiary of the ABLE Account, are the owner of the account. In order to be a Beneficiary, you must be an Eligible Individual. A Beneficiary must be a natural person (not an entity) and have a Social Security number or tax identification number.

Business Day

A day that the New York Stock Exchange (NYSE) is open for regular trading.

Custodian

The Bank of New York Mellon. The Custodian is responsible for physical custody and safekeeping of investment assets.

Disability Certification

The term "disability certification" means, with respect to an individual, a certification by the individual or the Authorized Legal Representative of the individual that certifies that (i) the individual has a medically determinable physical or mental impairment, which results in marked and severe functional limitations, and which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months, or is blind (within the meaning of Section 1614(a)(2) of the Social Security Act), (ii) such blindness or disability occurred before the date on which the individual attained age 46, and (iii) the individual has obtained and will continue to retain a copy of the individual's diagnosis relating to the individual's relevant impairment or impairments, signed by a physician meeting the criteria of section 1861(r)(1) of the Social Security Act (42 U.S.C. 1395x(r)) and including the name and address of the diagnosing physician and the date of the diagnosis.

Eligible Individual

An individual is an Eligible Individual for a taxable year if, during such taxable year: (1) the individual is entitled to benefits based on blindness or disability under Title II (SSDI) or XVI (SSI) of the Social Security Act, and such blindness or disability occurred before the date on which the individual attained age 46; or (2) a Disability Certification with respect to such individual is filed with the Secretary for such taxable year. In all cases, the blindness or disability must have occurred before the date on which the individual attained age 46.

FDIC

The Federal Deposit Insurance Corporation.

Good Order

Good Order means the Program Manager has received all documents and information necessary to enroll in the Program or to instruct the Program or to process a transaction or take any other action on your Account.

IRS

The Internal Revenue Service.

IRS Code

The Internal Revenue Code of 1986, as amended.

Management Agreement

The Management Agreement between the State Treasurer and the Program Manager.

Maryland ABLE Act

The Maryland Achieving a Better Life Experience (ABLE) Act 2016 Maryland Laws Ch. 39 (H.B. 431) signed into law April 12, 2016, as amended from time to time. The Maryland ABLE Act is codified at §§ 18-19C-01 through 18-19C-10 of the Education Article of the Annotated Code of Maryland.

Member of the Family

For purposes of Rollovers from one ABLE account to another, or in the case of a change of an ABLE Beneficiary, a Member of the Family is a brother, sister, stepbrother, or stepsister. This definition includes siblings through adoption.

For purposes of a rollover from a Qualified Tuition Program to an ABLE account, a "Member of the Family" is an individual as defined in Section 529(e)(2) of the IRS Code. A Member of the Family means an individual who is related to the Beneficiary as follows:

A son or daughter, or a descendant of either;
A stepson or stepdaughter, or a descendant of either;
A brother, sister, stepbrother, or stepsister;
The father or mother, or an ancestor of either;
A stepfather or stepmother;
A son or daughter of a brother or sister;
Brother or sister of the father or mother;
A son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law;
The spouse of the Beneficiary or the spouse of any individual described above; or
A first cousin of the Beneficiary

For purposes of determining who is a Member of the Family in the context of a 529 to ABLE Rollover, a legally adopted or foster child of an individual is treated as the child of that individual by blood. The terms "brother" and "sister" include half-brothers and half-sisters.

Mutual Funds/Funds

Any mutual funds serving as underlying investments for the Investment Options.

Non-Qualified Withdrawal

Any withdrawal from your ABLE Account not used to pay your Qualified Disability Expenses. Note that expenses will not be Qualified Disability Expenses if they are incurred at a time when a Beneficiary is not an Eligible Individual. See Taking a Withdrawal from your ABLE Account – Qualified Withdrawals and Non-Qualified Withdrawals for more information.

Participation Agreement

The agreement between you and the State Treasurer that governs your use of the Program, which is located in Appendix A.

Partner State

The Maryland ABLE program provides services pursuant to a collaboration with the State of Oregon.

Portfolio Options

The investment options available to ABLE Account owners. There are a total of 14 (fourteen) Portfolio Options that are designed for investment purposes. The Portfolio Options include a Stable Investment Option, an Income Investment Option, a Conservative Investment Option, a Moderate Investment Option, an Aggressive Investment Option, and nine Target Year Investment Options ranging from 2030-2070 in five-year increments.

Program

The Maryland ABLE program.

Program Manager

The independent contractor selected by the State Treasurer to provide the program management services on behalf of the Maryland ABLE program and the Trustee. Vestwell Government Savings, LLC ("Vestwell"), a wholly owned subsidiary of Vestwell Holdings, Inc., is currently engaged as the Program Manager for the Maryland ABLE program.

Qualified Disability Expenses

Any expenses that: (1) are incurred at a time when the Beneficiary is an Eligible Individual, (2) relate to the blindness or disability of the Beneficiary, and (3) are for the benefit of the Eligible Individual in maintaining or improving his or her health, independence, or quality of life.

Such expenses include, but are not limited to, expenses related to the Eligible Individual's education, housing, transportation, employment training and support, assistive technology and personal support services, health, prevention and wellness, financial management and administrative services, legal fees, expenses for oversight and monitoring, funeral and burial expenses, and other expenses that may be identified from time to time by the IRS.

Qualified Withdrawal or Qualified Distribution

Any withdrawal used to pay for Qualified Disability Expenses. See Taking a Withdrawal from your ABLE Account – Qualified Withdrawals section for more information.

Representative Payee

A representative payee is an individual or organization appointed by the Social Security Administration (SSA) to receive Social Security or Supplemental Security Income (SSI) benefits for anyone who cannot manage or direct the management of his or her benefits. The Representative Payee is responsible for using the benefits to pay for current and future needs of the beneficiary and to save any benefits not needed. Representative Payees are required to keep records of expenses and may be required to provide an accounting of how the benefits were used or saved.

Rollover

ABLE to ABLE Rollover:

A transfer of assets between ABLE Programs for the same Beneficiary, or for a different Beneficiary, provided that the receiving Beneficiary is an Eligible Individual and a sibling of the original Beneficiary.

Rollover From a Qualified Tuition Program (529 Plan/College Savings Plan) to an ABLE Account:

Rollovers also include a transfer of assets from a Qualified Tuition Program (also known as college savings plan or 529 accounts) to an ABLE account for the same Beneficiary or for a different beneficiary, provided that the receiving beneficiary is a "Member of the Family" of the original 529 Account Beneficiary (as defined in this Plan Disclosure Booklet). Rollovers into an ABLE account from a Qualified Tuition Program are limited to the amount that, when added to all other contributions made to the ABLE Account for the calendar year, does not exceed the Annual Standard Contribution Limit.

Rollovers from Trump Accounts:

Federal legislation passed in 2025 created a new tax-advantaged savings and investment account for children called Trump Accounts. Section 530A of the Internal Revenue Code provides that during the calendar year in which the Trump Account beneficiary turns 17, the entire balance of the Trump Account may be rolled over, via a direct trustee-to-trustee transfer, to an ABLE account for the same Beneficiary. Such Rollovers do not count against the Annual Contribution Limit or the Maximum Account Balance limit. Rollovers from Trump Accounts to ABLE accounts are also not included in the Beneficiary's gross income for tax purposes. You should consult with a tax professional for more information and to determine what effect such a transfer may have on your specific situation.

Secretary

The United States Secretary of the Treasury.

Sibling of the Beneficiary

A Sibling of the Beneficiary includes a brother, sister, stepbrother, stepsister, half-brother, and half-sister, whether by blood or adoption.

SSDI

The Social Security Disability Insurance program under Title II of the Social Security Act.

SSI

The Supplemental Security Income program under Title XVI of the Social Security Act.

State Treasurer

The Treasurer of the State of Maryland.

Tax Regulations

Final U.S. Treasury Department IRS regulations on Section 529A Qualified ABLE Programs, 85 Fed. Reg. 74010 (November 19, 2020) and any amendments thereto.

Units

The share of assets held by the Program for a Beneficiary with respect to a particular Portfolio Option. Units are credited to your ABLE Account upon a contribution or deducted from your ABLE Account upon a withdrawal.

The ABLE ACT

The Stephen Beck, Jr., Achieving a Better Life Experience Act of 2014 (the "ABLE Act") was enacted to permit Eligible Individuals with a disability to make contributions to a tax-favored account to be used to pay for Qualified Disability Expenses without jeopardizing their eligibility for certain means-tested federal benefits.

Maryland ABLE program Overview

The Maryland ABLE program (the "Program" or "Maryland ABLE") has been developed and is intended to operate as a qualified ABLE program in accordance with Section 529A of the IRS Code, which permits states and state instrumentalities to establish and maintain programs that allow Eligible Individuals to save funds for Qualified Disability Expenses in a tax-favored account without jeopardizing eligibility for certain federal means-tested benefits such as SSI (the first $100,000 in an ABLE Account is exempt from the SSI resource limit), housing assistance through the Department of Housing and Urban Development (HUD), food assistance through the Supplemental Nutrition Assistance Program (SNAP), and medical assistance through Medicaid.

Program Disclosure Booklet

Before you open a Maryland ABLE Account and make any investments in the Program, you should carefully read and understand this Program Disclosure Booklet, along with the Participation Agreement attached as Exhibit A. It includes important details about the Program, including information regarding the rules related to eligibility for opening an ABLE Account, the risks of investing in the Program, certain limitations and restrictions that will apply to your use of the money in the Program, the tax treatment of contributions, earnings, and distributions from an ABLE Account, and the fees you will pay for having an ABLE Account.

Important Legal Information

Neither the State of Maryland, the State Treasurer, nor any of their respective employees, agents or advisers, make or are authorized to make any representation about the suitability of the investment options described in this Program Disclosure Booklet. Other types of investments or other savings options may be more appropriate depending on your individual circumstances. The information provided in this Program Disclosure Booklet is not investment, legal, or tax advice and is not intended to be exhaustive. The Program Manager cannot and does not provide legal, financial, or tax advice. You should consult with a professional tax advisor, financial professional, or disability rights advocate for more information.

Program Disclosure Booklet Summary

What is the Maryland ABLE program?

The Maryland ABLE program is a disabilities savings program established pursuant to Section 529A of the IRS Code and the Maryland ABLE Act. The Program is administered by the State Treasurer. The Program is designed to help Eligible Individuals with disabilities save for Qualified Disability Expenses in a tax-advantaged way to avoid jeopardizing eligibility for certain means-tested benefits. The Program offers tax-free growth, and tax-free distributions when used for Qualified Disability Expenses.

Who administers the Maryland ABLE program?

The State Treasurer is responsible for administering, managing, and promoting the Maryland ABLE program in compliance with all applicable federal and State laws and regulations regarding qualified ABLE programs.

Who runs the daily operations of the Maryland ABLE program?

The State Treasurer has engaged the services of a Program Manager to manage the daily operations of the Maryland ABLE program. The current Program Manager is Vestwell Government Savings.

Does Maryland ABLE partner with other states to offer the Program?

Yes. The Maryland ABLE program is part of a collaboration with the State of Oregon.

Does Maryland ABLE work with an Investment Adviser?

Yes. The State Treasurer has engaged the services of an Investment Adviser for the Program. The current Investment Advisor is Marquette Associates, a registered investment adviser under the Investment Advisers Act of 1940. The Investment Adviser advises the State Treasurer with respect to the investments of the Maryland ABLE program, in consultation with relevant State Treasurer staff, including recommending the underlying investments for each of the Program's Portfolio Options and monitoring of the Portfolio Options in accordance with the Maryland ABLE Investment Policy Statement approved by the State Treasurer.

Who can open a Maryland ABLE Account and how?

An Eligible Individual may open an ABLE Account. Under certain circumstances, other individuals may open an ABLE Account on behalf of an Eligible Individual. For more information, see the Getting Started – Eligibility to Open an ABLE Account section and the Getting Started – Opening Your ABLE Account section.

An Eligible Individual or other authorized individual can enroll by completing the online enrollment process or by mailing in a completed enrollment form. Requests for enrollment cannot be processed if any required information is missing.

How does the Maryland ABLE program Work?

When you open a Maryland ABLE Account, you choose to invest in a choice of fourteen Portfolio Options. The Portfolio Options include a Stable Investment Option, an Income Investment Option, a Conservative Investment Option, a Moderate Investment Option, an Aggressive Investment Option, the Target Year 2030 Option, the Target Year 2035 Option, the Target Year 2040 Option, the Target Year 2045 Option, the Target Year 2050 Option, the Target Year 2055 Option, the Target Year 2060 Option, the Target Year 2065 Option, and the Target Year 2070 Option.

How you choose to invest is based upon your preferences and risk tolerance. Any earnings in your Account are tax-deferred, and distributions are federally and State tax-free if used for Qualified Disability Expenses. Contributions can be deposited by you, or by others, into your ABLE Account up to certain annual limits and lifetime limits. For more information see the section titled Contributing to Your ABLE Account.

How can I contribute to a Maryland ABLE Account?

You can fund your Account in a variety of ways: by check, by electronic transfer¹ from your bank, via a regular contribution from your bank, through a direct deposit of your Social Security benefits, through a direct deposit from your payroll department, or by rollover from another qualified ABLE Program or from a Qualified Tuition Program (also known as a 529 college savings program). Certain minimum contribution amounts and maximum contribution limits apply.

¹ The Maryland ABLE program and any ABLE Accounts are not "savings accounts" as defined in the Electronic Funds Transfer Act of 1978, 15 U.S.C. §§1693 et seq. ("EFTA"), and are not subject to the provisions of the EFTA or similar consumer protections. Account Holders, Beneficiaries and/or their Authorized Legal Representatives are solely responsible for protecting the security of their account credentials and monitoring their ABLE Account, and they must contact the Program Manager immediately if they believe their ABLE Account has been compromised in any way.

What are the Annual Contribution Limits?

The standard Annual Contribution Limit is currently $20,000 per year and is subject to change. Over and above the standard Annual Contribution Limit, an employed Beneficiary may contribute an additional amount up to the lessor of: (i) the Beneficiary's gross wages for the current tax year; or (ii) an amount equal to the Federal Poverty Level applicable in the Beneficiary's state of residence for a one-person household, as determined for the calendar year preceding the tax year in which contributions are made. Federal poverty guidelines can be found on the Department of Health and Human Services website at: https://aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines. For more information see the ABLE to Work Contributions section.

Are there other contribution limits?

Yes. Contributions to an ABLE Account are not permitted if, taking into account the proposed contribution, the ABLE Account's balance is or would be greater than $500,000, the Maximum Account Balance permitted by the Maryland ABLE program. Contributions are not allowed once the Account reaches that value, but the Account may continue to receive investment earnings, if any. For more information see the Maximum Account Balance section.

How do I request updates to my Account and distributions from my Account?

Most updates to your Account can be requested online or by telephone. Requirements and restrictions for distributions may change from time to time. You may call a Maryland ABLE representative for the most updated options and requirements for requesting updates and distributions.

How does a Maryland ABLE Account impact my federal or State means-tested benefits?

Having an ABLE Account balance over $100,000 and certain types of distributions could affect a Beneficiary's eligibility for SSI cash payments. See the Social Security and Medicaid Considerations section for more information. In Maryland, money in an ABLE account may not be considered for the purpose of determining eligibility to receive, or the amount of, any assistance or benefits from local or Maryland state means-tested programs. If you live outside of Maryland, you should consult with a legal and/or financial professional regarding your home state's law. Finally, the Centers for Medicare & Medicaid Services ("CMS") has issued guidance on how ABLE Account funds will be treated for purposes of determining Medicaid eligibility. The CMS guidance can be found at: https://www.medicaid.gov/federal-policy-guidance/downloads/smd17002.pdf. Please contact your state's Medicaid office with any additional questions. For more information see the Social Security and Medicaid Considerations section.

What are the Portfolio Options?

Maryland ABLE offers a total of fourteen options, including a Stable Value Fund, a Fixed Income Investment Fund, a Conservative Investment Fund, a Moderate Investment Fund, an Aggressive Investment Fund, the Target Year 2030 Option, the Target Year 2035 Option, the Target Year 2040 Option, the Target Year 2045 Option, the Target Year 2050 Option, the Target Year 2055 Option, the Target Year 2060 Option, the Target Year 2065 Option, and the Target Year 2070 Option. You can choose to invest in one Portfolio Option or a combination of Portfolio Options. For more information see the Portfolio Options section.

What are the risks associated with the Maryland ABLE program?

The Maryland ABLE program is not insured or guaranteed. All investments have risk, including the loss of principal. Investment returns will vary depending upon the performance of the Portfolio(s) you choose and past performance is not a representation of future investment returns. Depending on market conditions, you could lose all or a portion of your investment. The Maryland ABLE program is governed by both federal and State laws and regulations that are subject to change. Strict compliance requirements regarding ABLE Accounts may pose administrative, legislative and/or tax risks. Neither the State Treasurer's Office nor the Program Manager are authorized to provide legal, financial, or tax advice. Every Account Holder, Beneficiary, or Authorized Legal Representative, should consult their own tax advisor, financial professional, or disability rights advocate for more information. In addition, each Portfolio Option carries particular investment-related risks based on the composition of the underlying Funds in which it invests. For more information, see the Risks of Investing in the Program section.

What are the Fees associated with the Maryland ABLE program?

The Program has no commissions, loads, or sales charges. There is an Annual Account Maintenance Fee of $45, which will be taken quarterly in arrears ($11.25 per quarter). This Fee is discounted to $25 for Accounts that establish electronic delivery of most Account communications ($6.25 per quarter). The Portfolio Options include annual asset-based fees including the expenses of the underlying Funds, and a 0.30% Administrative Fee, with the exception of the Stable Value Fund which does not have any underlying mutual fund expenses or Administrative Fees. Certain transactional fees may apply as well. A detailed description of Fees associated with the Maryland ABLE program can be found in the section titled "Cost of Having an ABLE Account."

What are the federal and state tax considerations?

Federal Tax Considerations

Contributions are not tax-deductible at the federal level, but earnings are distributed tax-free when used to pay for Qualified Disability Expenses. The earnings portion of a distribution that is not used to pay for a Beneficiary's Qualified Disability Expenses will be subject to federal tax, including an additional tax penalty of 10%. See the Tax Considerations section for more information. Contributions to an ABLE Account may also be eligible for the federal saver's credit. Information about the credit can be found on the IRS website at: https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-savings-contributions-credit-savers-creditfederal.

State Tax Considerations

Maryland taxpayers may subtract up to $2,500 from their Maryland State adjusted gross income annually per contributor, per Beneficiary for contributions to the Maryland ABLE program. Contributions made in excess of $2,500 per Beneficiary in a single year may be carried forward for up to 10 consecutive years until the full amount contributed to the ABLE Account has been subtracted, subject to the $2,500 annual limit. If you no longer pay Maryland income tax, you are no longer eligible to claim this subtraction. To take advantage of the income subtraction for a particular year, your contribution needs to be completed online (processed by your bank) or postmarked by December 31 of that year. Third-party contributors will not receive a tax form reporting annual contributions, so they should keep detailed records to substantiate contributions for tax reporting purposes. Earnings on distributions used for purposes other than Qualified Disability Expenses will be subject to state income taxes. Non-Maryland taxpayers should consult with their home state's tax laws for additional information and the Tax Considerations section of this document.

Getting Started

This section discusses who is eligible to open an ABLE Account in the Program and how to do it. The Program is designed to be established and maintained online in order to maximize efficiency and customer service.

Eligibility to Open an ABLE Account

In order to open an ABLE Account, the Beneficiary must be an Eligible Individual under Section 529A of the IRS Code. An individual is an Eligible Individual for a taxable year if, during that year, either the individual:

is entitled to Social Security Disability Insurance (SSDI); or
is entitled to Supplemental Security Income (SSI) benefits based on blindness or disability under Title II or XVI of the Social Security Act ("Social Security Act Eligibility"); or
has a Disability Certification meeting specified requirements that is made under penalties of perjury ("Diagnosis-Based Eligibility").

In all cases, blindness or disability must have occurred before the date on which the individual attained age 46.

Residency Requirements

In order to open an ABLE Account in the Program, the Beneficiary and, if applicable, the Authorized Legal Representative, must both be residents of the U.S. with addresses in the U.S., a U.S. territory, or a U.S. military base. If, after opening an ABLE Account in the Program, the Beneficiary or Authorized Legal Representative later moves to an international location, the ABLE Account can remain open, but contributions will not be permitted during any time that either the Beneficiary or Authorized Legal Representative is not a resident of the U.S. with an address in the U.S., a U.S. territory, or a U.S. military base.

Authorized Users

Beneficiaries or Authorized Legal Representatives can appoint one or more Authorized Users to an ABLE Account. Authorized Users can be assigned a variety of permission levels on an ABLE Account, from view-only access up to transactional access. Authorized Users may only access an ABLE Account from within the Program's online account portal. Regardless of the permission level assigned, Authorized User capabilities are limited. Authorized Users cannot add or remove bank accounts, cannot close, transfer, or initiate an outgoing Rollover, and cannot edit ABLE Account information, among other limitations.

Social Security Act Eligibility Certification Requirements

If an individual seeks to open an ABLE Account based on Social Security Act Eligibility, the Tax Regulations provide that the qualified ABLE Program may determine the evidence required to establish the individual's eligibility. The Program currently requires that an individual who claims Social Security Act Eligibility must certify under penalties of perjury that he or she is entitled in the then current year to receive SSI or SSDI benefits, as applicable. For more information about benefits based on blindness or disability under Title II or XVI of the Social Security Act, please see https://www.ssa.gov/disability/professionals/bluebook/general-info.htm or contact your local Social Security Administration Field Office.

Diagnosis-Based Eligibility Certification Requirements

If an individual asserts Diagnosis-Based Eligibility to open an ABLE Account, the Program, based on the Tax Regulations and guidance from the U.S. Treasury Department, currently requires that the individual certify under penalties of perjury that: (1) he or she has a medically determinable physical or mental impairment which results in marked and severe functional limitations (within the meaning of the Social Security Act), and which (i) can be expected to result in death, or (ii) has lasted or can be expected to last for a continuous period of not less than 12 months; or (2) he or she is blind (within the meaning of the Social Security Act).

The individual must also certify that the disability or blindness occurred before the individual attained age 46.

The Program further requires that the individual certify under penalties of perjury that he or she has received a written diagnosis relating to the disability from a "licensed physician" (as defined in Section 1861(r) of the Social Security Act, 42 U.S.C. 1395x(r)). The individual must also agree to provide a copy of the physician's written diagnosis and related information to the Program upon request. If the Beneficiary fails to provide the requested information within 30 days of any request, the Program reserves the right to reject further contributions to the Beneficiary's ABLE Account until the requested information is provided.

Eligibility Requirements are Subject to Federal Law and May Change

Eligibility requirements are based on a good-faith interpretation of federal law and regulations and are subject to change at any time. Neither the State of Maryland, the State Treasurer or any employees of the State Treasurer's Office, the Program, the Program Manager, the Investment Adviser, nor the Custodian, including any authorized agents or representatives thereof, will have any responsibility or liability for an individual's failure (or their Authorized Legal Representative's failure) to establish eligibility to open an ABLE Account, or to maintain eligibility to continue to make contributions to or withdrawals for Qualified Disability Expenses from an ABLE Account.

Opening Your ABLE Account

To open an ABLE Account, the Beneficiary, or someone on their behalf, must first complete the online enrollment process or submit a paper enrollment form (each, an "Enrollment Form"). The Enrollment Form and this Program Disclosure Booklet govern the terms of your ABLE Account. The Enrollment Form requires you to provide the Program with certain information, including your eligibility to open an ABLE Account, the Portfolio Option(s) in which you choose to invest, your name, address, date of birth, Social Security Number, and other information that will allow the Program to identify you. Until you provide all the information needed, the Program will not be able to open your ABLE Account or allow contributions to the Program for your benefit.

The Beneficiary, or their authorized legal representative, may complete and submit the Enrollment Form online on the Program's website or mail a paper Enrollment Form to the address listed on the Enrollment Form.

Persons Authorized to Open Your ABLE Account:

An ABLE account may only be established for an Eligible Individual by:

the Eligible Individual;
a person selected by the Eligible Individual; or
subject to certain certifications and the hierarchy below, if an Eligible Individual, whether a minor or an adult, is unable to establish an ABLE account, in the following priority:
1. the Eligible Individual's agent under a power of attorney;
2. the Eligible Individual's legal guardian or conservator;
3. the spouse of the Eligible Individual;
4. a parent of the Eligible Individual;
5. a sibling of the Eligible Individual;
6. a grandparent of an Eligible Individual; or
7. a Representative Payee appointed for the Eligible Individual by the Social Security Administration.

Required Certification:

The Program may accept a certification made under the penalties of perjury from the person seeking to establish an ABLE Account that indicates: (i) the basis of the person's authority to establish the ABLE Account; and (ii) there is no other person with a higher priority to establish the ABLE Account as described above.

Restrictions on Certain Individuals:

The following individuals may not establish an ABLE Account on behalf of an Eligible Individual: (a) a minor; (b) an individual against whom the Eligible Individual has obtained a peace or protective order; (c) an individual who has been held civilly or criminally liable for financial exploitation under Title 13, Subtitle 6 of the Estates and Trusts Article of the Annotated Code of Maryland; or (d) an individual who is the subject of a civil or criminal order prohibiting contact with the Eligible Individual.

One Account Rule

A Beneficiary is limited to only one ABLE Account at a time, regardless of what state the account is in (the "One Account Rule"). If an ABLE Account has been closed it does not prohibit the creation of another ABLE Account for the same Beneficiary. As part of the enrollment process, the person establishing the ABLE Account will be required to certify under penalties of perjury that he or she neither knows nor has reason to know that the Eligible Individual already has an existing ABLE Account (other than an ABLE Account that will terminate with the rollover or program-to-program transfer of its assets into the new ABLE Account) before the ABLE Account can be established. If a Beneficiary has more than one ABLE Account open at the same time (other than in the case of a 60-day transition period for Rollovers), the later-opened account(s) will not be treated as an ABLE Account under Section 529A and will not be eligible for the benefits of ABLE Accounts. For example, monies contributed to a second or subsequent ABLE Account will not be disregarded for determining eligibility under federal means-tested programs, such as SSI, and could result in the imposition of federal taxes and penalties. See Tax Considerations for more information.

Choosing Portfolio Options

The State Treasurer has established multiple Portfolio Options for Maryland ABLE Account Beneficiaries or their Authorized Legal Representatives to choose from. To complete your Enrollment, you must select the Portfolio Option(s) you wish to invest in and the amount of funds to invest in each Portfolio Option(s). You may select the Stable Value Fund and/or one or more of the Portfolio Options, with a minimum initial investment of $25 and minimum subsequent investment of $5.00 contributed to any single portfolio.

See "Portfolio Options" for summaries of the Portfolio Options offered with the Maryland ABLE program.

Contributing to your ABLE Account

How You Can Contribute to Your ABLE Account

You can contribute to your Maryland ABLE account (1) by check (excluding starter and cashier's checks); (2) through automatic contributions; (3) by electronic funds transfer (EFT); or (4) through a Rollover from another qualified ABLE program or a Qualified Tuition Program.

Checks should be made payable to "Maryland ABLE", must be drawn on a banking institution located in the United States and be payable in U.S. dollars. For further clarification on acceptable methods of payment, please call the Program customer service number: 1-855-563-2253.
You can also contribute by selecting an automatic contribution. Changes can be made to your automatic contribution selection online on the Program website or with a paper form you may obtain by downloading from the Program website or calling the customer service number: 1-855-563-2253.
Electronic fund transfers² allow you to make contributions from your linked bank account over the internet on the Program website.
The Beneficiary or an Authorized Legal Representative can contribute through automatic payroll deductions if available through their employer.
The Beneficiary or a Representative Payee of the Beneficiary appointed by the SSA, if serving as the account Authorized Legal Representative, may directly contribute the Beneficiary's Social Security benefits through automatic direct deposits from the SSA.
You may contribute to a Maryland ABLE Account through a Rollover by completing the appropriate section on the Enrollment form and completing the applicable rollover account form.

² The Maryland ABLE program and any ABLE Accounts are not "savings accounts" as defined in the Electronic Funds Transfer Act of 1978, 15 U.S.C. §§1693 et seq. ("EFTA"), and are not subject to the provisions of the EFTA or similar consumer protections. Beneficiaries and/or Authorized Legal Representatives are solely responsible for protecting the security of their Account credentials and must contact the Program Manager immediately if they believe their Account has been compromised in any way.

Rollover Contributions

A Rollover is a transfer of funds by any of the following methods:

Direct Rollover

Assets are transferred directly from a Qualified Tuition Program or another ABLE plan into a Maryland ABLE Account for the same Beneficiary. In a direct rollover the movement of funds is coordinated by the Qualified Tuition Program or former ABLE plan and the Maryland ABLE program Managers.

Indirect Rollover

Assets are withdrawn from a Qualified Tuition Program or another ABLE plan and deposited into a Maryland ABLE Account for the same Beneficiary. In an indirect rollover the movement of funds is coordinated by the account owner(s), who will take possession of the funds, and such funds must be redeposited within 60 days of being withdrawn from the originating program. If funds are not redeposited within 60 days, it will be treated as a non-qualified withdrawal for tax purposes.

The sources of funds for Rollovers are described below:

ABLE to ABLE Rollover

A tax-free Rollover of funds into an ABLE account from another qualified ABLE program may be made as described if the Beneficiary of the recipient account is the same Beneficiary or a Sibling of the Beneficiary who is an Eligible Individual, as defined by this Program Disclosure Booklet. Both a Direct and an Indirect Rollover can be initiated by completing the ABLE-to-ABLE Rollover Form and delivering the completed Form to the Maryland ABLE program Manager. Based on IRS regulations, Indirect Rollovers for the same Beneficiary are restricted to one per 12-month period.

Pursuant to current IRS guidance, in the case of an Indirect Rollover, the ABLE Account from which amounts were rolled, or taken from, must be closed as of the 60th day after the amount was distributed from the ABLE Account in order for the account that received the Rollover to be treated as an ABLE Account. In the case of a Direct Rollover, the ABLE Account from which amounts were rolled, or taken from, must be closed upon completion of the transfer. If the account that receives the transfer is not treated as an ABLE Account, the account will not be eligible for the benefits of ABLE Accounts. For example, the Account will not be disregarded for determining eligibility under federal means-tested programs, such as SSI, and could result in the imposition of federal taxes and penalties.

NON-QUALIFIED WITHDRAWALS

Non-Qualified Withdrawals may be subject to federal tax on earnings and an additional 10% tax penalty. In addition, a transfer to a person who is not a Sibling of the Beneficiary may subject the Beneficiary to federal gift taxes, generation-skipping transfer tax, or other tax consequences.

The Program Manager will assume that the entire amount of any contribution that is a Rollover contribution from another qualified ABLE program is earnings unless the Program Manager receives appropriate documentation showing the principal and earnings portions of the Rollover contribution. If you are attempting to contribute to the Program via a Rollover, the qualified ABLE program from which you are transferring funds may impose its own processes or charges, so you should review the rules for both programs before requesting such a transfer.

Qualified Tuition Program (College Savings/529 Account) to ABLE Rollover

A tax-free Rollover of funds into an ABLE Account from a Qualified Tuition Program (also known as college savings or 529 accounts) to an ABLE Account may be made as described for the same Beneficiary or for a different Beneficiary, provided that the receiving Beneficiary is a "member of the family" of the original 529 Beneficiary (as defined by section 529 of the IRS Code). Rollovers into an ABLE Account from a Qualified Tuition Program are limited to up to $20,000 for calendar year 2026 minus any contributions to date for the applicable calendar year and are subject to the ABLE Account's annual contribution limit.

Who Can Contribute to an ABLE Account

Anyone (including your friends and family), a corporation, trust, or other legal entity may make a contribution to your ABLE Account. However, any contribution to an ABLE Account may have gift or other tax consequences to the contributor. The Beneficiary is the owner of the ABLE Account. Contributions by anyone other than the Beneficiary will become the property of the Beneficiary.

Standard Annual Contribution Limit

The standard Annual Contribution Limit per ABLE Account is $20,000 per year for calendar year 2026. This limit may change from year to year and the Beneficiary should check with the Program for each year's Annual Contribution Limit. Certain employed ABLE Account Beneficiaries may make an additional contribution. See ABLE to Work Contributions Section below.

Example

If the Beneficiary contributes $16,000 to the ABLE Account in calendar year 2026 and the Beneficiary's parent contributes $4,000, the standard Annual Contribution Limit will have been reached and no additional contributions will be accepted into the ABLE Account until the following year, except as provided below for ABLE to Work contributions.

The standard Annual Contribution Limit may increase from time to time. If amounts contributed to an ABLE Account are greater than the Annual Contribution Limit, the excess contributions will be returned to the contributor(s). See Attempted Contributions over the Annual Contribution Limit Section below.

ABLE to Work Contributions

Certain employed ABLE Account Beneficiaries may make an additional contribution over the Annual Contribution Limit. An employed ABLE Account Beneficiary may contribute an additional amount up to the lesser of: (i) the Beneficiary's compensation for the current tax year; or (ii) an amount equal to the federal poverty line for a one-person household applicable in the state of the Beneficiary's residence as determined for the calendar year preceding the tax year in which contributions are made. Official federal poverty guidelines are updated annually by the U.S. Department of Health and Human Services ("HHS"). Current and prior year federal poverty level guidelines may be found on the Office of the Assistant Secretary for Planning and Evaluation ("ASPE") website at https://aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines.

An employed Beneficiary is not eligible for the increased contribution limit for the tax year if any contribution is made by or on behalf of the Beneficiary to a qualified defined contribution plan, including, but not limited to, a 401(k) plan, a 403(b) plan, or a 457(b) retirement plan.

Attempted Contributions over the Annual Contribution Limit

The Program Manager will not knowingly accept contributions that would cause an ABLE Account to exceed the Annual Contribution Limit ("Excess Contributions"). In the event that an Excess Contribution is accepted by the Program Manager, as soon as the Program Manager becomes aware, they will make a good-faith effort to return the Excess Contribution to the contributor, plus or minus any investment gains or losses from market changes between the date of the Excess Contribution and the date of refund.

A contribution to an ABLE Account in excess of the Annual Contribution Limit and any earnings resulting from the Excess Contribution are subject to an excise tax in an amount equal to 6% of the Excess Contribution.

If you identify any Excess Contributions, you must request a return of the contributions from the Program Manager on or before the day prescribed by law (including extensions of time) for filing tax returns for the taxable year in which the contribution was made. Please consult your tax adviser.

Neither the State Treasurer, the Maryland ABLE program nor the Plan Manager shall bear responsibility for any excise taxes imposed as a result of an Excess Contribution.

Maximum Account Balance

Additional contributions to an ABLE Account are not permitted if they will cause the Maryland ABLE Account's balance to be greater than the Maximum Account Balance permitted by the Maryland ABLE program, currently $500,000. While no additional contributions can be accepted, ABLE Accounts that have reached the Maximum Account Balance may continue to accrue earnings. This limit may increase from time to time. Once the ABLE Account balance falls below the Maximum Account Balance, contributions may resume, subject to the same limitations.

Remember, while the Maryland ABLE program's Maximum Account Balance is $500,000, amounts over $100,000 may adversely affect a Beneficiary's eligibility for SSI cash benefits.

Attempted Contributions over the Maximum Account Balance

The Program Manager will not knowingly accept attempted contributions that would exceed the Maximum Account Balance ("Excess Aggregate Contributions"). If Excess Aggregate Contributions are received by the Program Manager, the Program Manager will make a good faith effort to return to the contributor the Excess Aggregate Contributions, plus any earnings on the Excess Aggregate Contributions or less any market losses between the date of the Excess Aggregate Contribution and the date of refund.

Unit Value and Processing Contributions

Contributions to your ABLE Account are applied to the purchase of Units of the Portfolio Option(s) you select. When you make contributions, you are buying additional Units in the Portfolio Option(s).

Contributions received by the Program Manager, or its agent, in Good Order before the close of the NYSE (which is normally 4 p.m. Eastern Time on any day the NYSE is open for business) are processed that day based on the net asset value (as of close of business on the date of the contribution) of the Portfolio Option(s) selected to receive the contribution. Requests received after the close of the NYSE, or on a day that the NYSE is not open for business, are processed the next business day using the net asset value at the close of business on that day.

The net asset value of a Unit in each Portfolio Option is computed by dividing (i) a Portfolio Option's assets less any liabilities allocated to that Portfolio Option by (ii) the number of outstanding Units of such Portfolio Option. The liabilities allocated to a Portfolio Option are described in the "Annual Asset-Based Fees" chart.

Taking a Withdrawal from your ABLE Account

General

Withdrawals may be taken from an ABLE Account to pay for any Qualified Disability Expense. You may request withdrawals online at any time. You may also take a withdrawal by calling us or completing a withdrawal form available on our website. Only a Beneficiary or the Beneficiary's Authorized Legal Representative may request a withdrawal. Except as described, distributions may only be made to or for the benefit of the Beneficiary of the ABLE Account.

Currently, the Program allows only one withdrawal per day up to a maximum of $19,000 per withdrawal.

Qualified Withdrawals or Distributions

Withdrawals from your Account may be Qualified or Non-Qualified, as determined by the IRS. As the Beneficiary, you (or your Authorized Legal Representative) are responsible for satisfying the IRS requirements for proof of Qualified Distributions, which may require you to retain any paperwork and receipts necessary to verify the use for the withdrawal you received. Neither the State Treasurer nor the Maryland ABLE program makes any representations regarding whether a distribution meets the definition of a Qualified Distribution.

Withdrawals for Qualified Disability Expenses are exempt from federal income taxes and the applicable tax penalty assessed to non-qualified withdrawals.

A Qualified Withdrawal or Qualified Distribution is a withdrawal from your ABLE Account that is used to pay for any Qualified Disability Expenses of the Beneficiary. Qualified Disability Expenses are any expenses that (1) are incurred at a time when the Beneficiary is an Eligible Individual, (2) are related to the blindness or disability of the Beneficiary, and (3) are for the benefit of the Beneficiary in maintaining or improving the Beneficiary's health, independence, or quality of life. Such expenses include, but are not limited to, expenses related to the Beneficiary's education, housing, transportation, employment training and support, assistive technology and personal support services, health, prevention and wellness, financial management and administrative services, legal fees, expenses for oversight and monitoring, funeral and burial expenses, and other expenses that may be identified from time to time by the IRS as Qualified Disability Expenses. Amounts distributed from an ABLE Account to pay any part of a claim filed against the Beneficiary or the ABLE Account by a state under a state Medicaid Program are considered Qualified Disability Expenses.

Method of Withdrawal

Withdrawals can be made by an electronic funds transfer to a linked bank account, an electronic bank to bank transfer (ACH transfer)*, a distribution to a Prepaid Card, or by check (a fee may apply).

Withdrawals may be subject to the following restrictions:

Initial and subsequent contributions received from a Beneficiary or ALR following a new enrollment will be held for five (5) Business Days before funds are available for withdrawal.
Contributions made as a gift from a third party will be held for up to 10 Business Days before the funds are available for withdrawal.
No checks will be mailed to a new address for 15 calendar days following a request to change a mailing address associated with an ABLE Account.
Electronic fund transfers (EFT) may not be requested 10 calendar days following a change in bank account information.

Unit Value and Processing Withdrawals

Withdrawals from your ABLE Account are processed by divesting you of Units of the Portfolio Option(s) you selected. For a withdrawal request received in Good Order on a Business Day before the close of regular trading on the NYSE (usually 4 p.m. Eastern Time), the Unit value used to calculate the value of the withdrawal from your ABLE Account will be the Unit value of the selected Portfolio Option(s) on the date the request is made determined after the close of regular trading on the NYSE. For a withdrawal request received in Good Order on a Business Day after the close of regular trading on the NYSE or on a day when the NYSE is not open for trading, the Unit value used to calculate the value of the withdrawal will be the Unit value of the selected Portfolio Option(s) determined after the close of regular trading on the NYSE on the next Business Day. See "Unit value" under "Contributing to Your Account," above, for more information.

Withdrawals Using a Prepaid Card

The Maryland ABLE Prepaid Card is issued by Sunrise Bank ("Issuing Bank") in accordance with the terms of the Cardholder Agreement established by the Issuing Bank. The Prepaid Card program is currently managed by True Link Financial. Prepaid cards are not automatically sent when a Maryland ABLE account is opened. Beneficiaries can request a Prepaid Card at marylandable.org/prepaid.

To sign up for a Prepaid Card you must first have a valid Maryland ABLE Account. When applying for a Prepaid Card, you'll be required to agree to the Issuing Bank's Privacy Policy and a separate Cardholder Agreement with the Issuing Bank. The Beneficiary will also be subject to any additional card account-related fees in accordance with the Issuing Bank's schedule of fees.

You can load your Prepaid Card and track your transaction activity directly from your online Prepaid Card account via True Link's website. Loading your Prepaid Card is treated like any other withdrawal. Loading your Prepaid Card is considered a withdrawal and does not count toward the annual limit of only two changes to investment direction.

A maximum of 95% of your available ABLE Account balance can be withdrawn from your available ABLE Account balance to be loaded onto your Prepaid Card, subject to the daily and monthly load card maximums set by the Issuing Bank. You can only add funds to your Maryland ABLE Prepaid Card by transferring money from your Maryland ABLE account. You may not add funds to your Prepaid Card account from any other source, including credit cards, debit cards, bank accounts, cash or by sending personal checks, cashier's checks, retailer load networks (e.g. Green-Dot, MoneyGram, Western Union, etc.), or money orders to the Issuing Bank.

The Prepaid Card may not be used for online gambling or any other illegal transactions. You can use the Prepaid Card to pay for Qualified Disability Expenses online or in any store in the United States that accepts VISA cards.

The Issuing Bank may automatically cancel the Prepaid Card without advance notice if the Prepaid Card has a zero or negative balance and has had a zero or negative balance for more than four consecutive months. You will receive notification from True Link at least 30 days prior to closing any account.

Rollover to another ABLE Program

If you are not rolling the money over directly from your Maryland ABLE account to another ABLE program, and instead are withdrawing funds to complete a Rollover to another ABLE program, the amount withdrawn from your Account must be deposited into another Qualified ABLE Program within 60 days of the date you withdrew it for it to be considered a Qualified Withdrawal. Remember, a Beneficiary can only have one ABLE Account at a time so the full balance would have to be withdrawn and deposited into the new account.

Non-Qualified Withdrawals

A Non-Qualified Withdrawal is any withdrawal that does not meet the requirements of being a Qualified Withdrawal or a Rollover as defined by the IRS. The earnings portion of a Non-Qualified Withdrawal is subject to federal income taxation and an additional 10% tax except in certain limited circumstances. See the "Tax Considerations" section for more information.

Changes to Your Account

Changes in Eligibility

A Beneficiary is responsible for promptly notifying the Program of any changes in his or her status as an Eligible Individual. There may be circumstances in which a Beneficiary ceases to be an Eligible Individual. An example would be if a disease that causes a disability goes into remission.

If a Beneficiary no longer meets the definition of an Eligible Individual, then beginning on the first day of the next year, no contributions to the ABLE Account may be accepted. For each tax year in which the Beneficiary does not meet the definition of an Eligible Individual, the Beneficiary's ABLE Account will remain an ABLE Account to which all of the provisions of Section 529A continue to apply. Contributions may resume if the Beneficiary regains status as an Eligible Individual. For example, if the Beneficiary is no longer an Eligible Individual as of September 10th of any given year, then beginning on January 1st of the following year, no additional contributions to the ABLE Account will be accepted. However, if on June 3rd of that same year the Beneficiary's disability recurs and the Beneficiary once again meets the definition of an Eligible Individual and provides the required Disability Certification to the Program, then additional contributions will be accepted.

Withdrawals made from the ABLE Account during a period when the Beneficiary is no longer an Eligible Individual are not for Qualified Disability Expenses and may therefore be subject to taxation.

Changing Portfolio Option Selection(s)

A Beneficiary or Authorized Legal Representative may transfer ABLE Account funds between Portfolio Options no more than twice per calendar year. You may add new Portfolio Options at any time.

Adding a Portfolio Option or transferring funds between Portfolio Options may be completed online.

Changing a Beneficiary

The Designated Beneficiary on an ABLE Account may be changed at any time during the life of the Beneficiary. The successor designated Beneficiary must be an Eligible Individual at the time the change becomes effective. To avoid negative tax consequences, the new Beneficiary must be a Sibling or Step-Sibling of the Beneficiary, provided they are an Eligible Individual with a qualifying disability. Naming a new Beneficiary will result in the original Account being closed and a new one being opened. See section on "Tax Considerations" for additional information.

Zero-Balance Accounts

If an ABLE account has a zero-dollar balance for 12 months or more, it may be closed. If an ABLE account is opened and remains unfunded after 90 days, it may be closed. To reinstate a zero-balance account, the Beneficiary or an Authorized Legal Representative must call the customer service center at 1-855-563-2253 from 9am-8pm ET or 1-844-888-2253 (TTY).

Social Security and Medicaid Considerations

The Social Security Administration ("SSA") has issued guidance on how it will treat ABLE Accounts for purposes of determining eligibility under SSI. See "Achieving a Better Life Experience (ABLE) Accounts, Program Operations Manual Systems," SI 01130.740 available at https://secure.ssa.gov/apps10/poms.nsf/lnx/0501130740.

The description below is taken from publicly available sources and is only provided for informational purposes. It is not intended to be exhaustive and is subject to change at any time.

Exclusions from Countable Resources Account Balances under $100,000

Only the portion of an ABLE account balance that exceeds $100,000 is counted for the purpose of determining the Beneficiary's countable resources when establishing eligibility for SSI benefits. Balances over the $100,000 limit will be counted towards the $2,000 limit outside of an ABLE Account along with other resources outside of the ABLE Account.

Funds Withdrawn from an ABLE Account for Qualified Expenses

SSA will also exclude from the Beneficiary's countable resources a withdrawal from an ABLE Account for Qualified Disability Expenses. This exclusion applies for as long as:

the Beneficiary maintains, makes contributions to, or receives distributions from the ABLE Account;
the distribution is unspent (unless the withdrawal is for rent or mortgage payments which must be spent in the calendar month they were withdrawn); and
the distribution is identifiable.

Withdrawals for rent or mortgage payments must be spent in the same month that the funds are withdrawn from the ABLE account. Except for rent or mortgage payments, SSA will exclude from countable resources the funds that had been withdrawn even if the Beneficiary retains them beyond the month in which they were withdrawn.

Example

Eric makes a withdrawal of $500 from his ABLE Account in June 2026 to pay for a health-related Qualified Disability Expense. His health-related expense is not payable until September, so Eric deposits the withdrawn funds into his checking account in June. Eric maintains his ABLE Account at all relevant times, and the withdrawn funds are both unspent and identifiable until Eric pays his health-related expenses in September 2026. The money is not income in June and SSA will exclude the $500 from Eric's countable resources in July, August, and September.

SSA will apply normal SSI resource counting rules and exclusions to assets or other items purchased with funds from an ABLE Account.

Example

Fred makes a withdrawal of $1,500 from his ABLE Account in September 2025 to buy a wheelchair, which is a Qualified Disability Expense. The wheelchair is an excluded resource in October and beyond, because it is an individual's personal property required for a medical condition.

Amounts Included as Countable Resources: Account Balances over $100,000

Funds in an ABLE Account over and above the first $100,000 are included as a countable resource by SSA.

Example

Jennifer has $101,000 in her ABLE Account. SSA includes $1,000 of Jennifer's ABLE Account as a countable resource.

Withdrawn Funds for Non-Qualified Expenses

SSA will count withdrawals for expenses that are not Qualified Disability Expenses as countable resources.

Example

Ben withdraws $50 to buy a birthday present for his mother. Qualified Disability Expenses do not include items that are not related to the health, independence or quality of life of the Beneficiary. The $50 would be counted by SSA as a resource.

Special Treatment for Housing Expenses

If retained beyond the calendar month in which the funds were withdrawn, SSA will include withdrawals for housing expenses as a countable resource. This includes mortgage (including property insurance required by the mortgage holder), real property taxes, rent, heating fuel, gas, electricity, water, sewer, and garbage removal.

Example A

Amy makes a withdrawal of $500 from her ABLE Account in May to pay her June rent. She deposits the $500 into her checking account in May but does not pay rent until June 2^nd. SSA will treat the $500 as a countable resource for the month of May.

Example B

Jim makes a withdrawal of $800 from his ABLE Account in August to pay his August rent. He deposits the $800 into his checking account on August 3^rd, and then withdraws $800 in cash on August 5th and pays his landlord. The $800 is not included as a countable resource for Jim because he received the distribution in August and also spent it in August.

When is SSI Affected?

When the balance of an SSI recipient's ABLE Account exceeds $100,000, SSI may be affected. If the ABLE Beneficiary's assets, including the funds in their ABLE Account, over $100,000 cause the recipient to exceed the SSI $2,000 resource limit, the recipient is put into a special SSI suspension status.

During the SSI suspension:

The recipient's SSI benefits are suspended, and the standard 12-month time limit for suspension of benefits does not apply (as long as he or she remains otherwise eligible, i.e. does not lose benefits based on reasons other than resource limit due to ABLE Account balance); and
The recipient retains continued eligibility for Medical Assistance (Medicaid). SSA will reinstate the individual's SSI eligibility for any month in which the individual's ABLE Account balance no longer causes them to exceed the resource limit and he or she is otherwise eligible.

Example

Paul is the designated Beneficiary of an ABLE Account with a balance as of the first of the month of $101,000. Paul's only other countable resource is a checking account with a balance of $1,500. Paul's countable resources are $1,000 from his ABLE Account (the amount over $100,000) and $1,500 from his checking account for a total of $2,500. Paul therefore exceeds the SSI resource limit, and his benefit will be suspended in accordance with the ABLE suspension rules, and he retains eligibility for Medicaid.

Exclusions from Income

SSA will exclude from the income of the Beneficiary any of the following:

any investment earnings on contributions to an ABLE Account;
qualified withdrawals from an ABLE Account;
certain contributions to an ABLE Account (e.g. Rollovers from an ABLE Account from a Sibling of the Beneficiary to an SSI recipient's ABLE Account; rollovers in limited amounts from a qualified tuition plan for the same Beneficiary to that Beneficiary's ABLE Account).
Third-party gift contributions, so long as certain conditions are met (see SI 01130.740(C)(1)(b))

The fact that a person uses their income to contribute to an ABLE Account does not mean that the income is not countable for SSI purposes. Income received by the Beneficiary and deposited into the Beneficiary's ABLE Account is still counted as income to the Beneficiary. For example, a Beneficiary can have contributions automatically deducted from their paycheck and deposited into their own ABLE Account. In this case, the income used to make the ABLE Account contribution would still be included in the Beneficiary's gross wages.

Medicaid

The ABLE Act provides that, for the purpose of determining an individual's eligibility to receive, or the amount of, any assistance provided by a needs-based federal program (such as Medicaid), amounts in, contributions to, and certain withdrawals from, ABLE Accounts shall be disregarded. The Centers for Medicare & Medicaid Services has provided guidance to states on the treatment of funds in, contributions to, and withdrawals from an ABLE Account, under the ABLE Act, for purposes of Medicaid eligibility. The guidance can be found here: https://www.medicaid.gov/federal-policy-guidance/downloads/smd17002.pdf. Please consult with your state's Medicaid office for questions.

Generally, in accordance with Section 529A, following the death of the Beneficiary, any state may file a claim — typically called a "Medicaid Recovery" claim — against the ABLE Account for the amount of the total medical assistance paid for the Beneficiary under that state's Medicaid Program after the establishment of the account (or any ABLE Account from which amounts were rolled to the ABLE Account). Under Maryland law, unless required by federal law, a Maryland agency may not seek payment from an ABLE account for any amount of medical assistance for the Beneficiary.

Medicaid Recovery claims are not a taxable distribution from the ABLE Account. Federal law also limits the amount that Medicaid can seek from an ABLE Account. First, the Beneficiary's funeral and burial expenses (including the unpaid balance of a pre-death contract for those services), as well as any outstanding Qualified Disability Expenses, can be paid from the ABLE Account. After that, Medicaid's claim is limited to the amount of total medical assistance that Medicaid paid for the Beneficiary after the date the ABLE Account was opened, minus any Medicaid Buy-In premiums paid, whether from the ABLE Account or otherwise, by or on behalf of the Beneficiary. Procedures for filing claims may vary from state to state.

Authorized Legal Representatives and executors and administrators should consider seeking legal counsel on the applicability of, and any available exceptions to, Medicaid Recovery under applicable state law and regulation.

After the expiration of the applicable statute of limitations for filing Medicaid claims against the Beneficiary's estate, the balance of the ABLE Account may be distributed to the successor designated beneficiary or, if none, to the deceased Beneficiary's estate.

Portfolio Options

Overview

The Program offers a total of fourteen Portfolio Options for you to invest in. Each Portfolio Option is designed to help meet your investment objectives and risk tolerance.

You may direct your contributions to one or more of the Portfolio Options. You may choose to put your contributions in any of the Program's Portfolio Options. IRS rules allow only two investment direction changes per calendar year. That means transferring money from one option to another, but does not prohibit adding a new option at a later date. Amounts may also be transferred between Portfolio Options upon a change of Beneficiary to a Sibling of the Beneficiary who is an Eligible Individual. See the Getting Started and Changes to Your Account sections for information about changing Portfolio Option elections.

Choosing a Portfolio Option for your ABLE Account takes planning. You need to consider your savings goals and your spending needs, understand your investment objectives, and select Portfolio Options suitable for your investment needs. This section helps you to understand the types of Portfolio Options offered under the Program, and the risks involved in investing in such Portfolio Options. Beneficiaries should periodically assess, and if appropriate, adjust their investment choices with their time horizon, risk tolerance, and investment objectives in mind.

Stable Option

The Stable Option seeks to preserve principal while providing steady, positive returns by investing in a portfolio of capital preservation securities intended to produce an overall exposure of 80% stable value funds and 20% FDIC insured bank deposits. Overall, the portfolio is designed to significantly reduce risk and provide limited appreciation potential for a shorter investment period.