ABLEAmerica®

Before you get started

ABLEAmerica is a 529 qualified disability plan. Savings grow free from federal taxes and may be free from state tax if used for qualified disability expenses. (Tax-advantaged treatment applies to savings used for qualified disability expenses. State tax treatment varies.) For eligibility information and available investment options, review the ABLEAmerica page. Consider talking to your financial professional before performing financial transactions. They can help you make decisions that support your long-term financial plan. 

For information on establishing a new account, including help finding a financial professional in your area, visit Open an account.

ABLEAmerica account updates

Requests to update the account owner’s contact information, including their mailing address, email address and phone number, can be taken over the phone. 

For requirements on changing the account owner’s name, adding/changing the successor owner and/or adding a bank account for Automated Clearing House (ACH) transactions, contact us.

ABLEAmerica contributions 

 Any individual or entity can contribute to an ABLEAmerica account. They can make a check payable to ABLEAmerica, include the account number and investment instructions and mail the check to the service center near them.

If a bank account is on file, requests can be made by phone for one-time ACH purchases or to set up/update automatic investments. Contact us for requirements.

There is no contribution deadline. However, contributions count as gifts in the year they are made. Therefore, a contribution must be made by December 31 to count as a gift for that year.

Visit Gifting shares for information on the Internal Revenue Service’s (IRS’s) annual gifting limits and how to gift shares from another account at Capital Group.

ABLEAmerica exchanges and strategy changes

One-time or automatic exchanges or rebalances can be requested by phone. These are considered strategy changes. The IRS limits ABLEAmerica accounts to two strategy changes per calendar year.

If an investor makes more than two strategy changes in the same calendar year, they are treated as distributions and reported on Form 1099-QA.

Examples of strategy changes include but are not limited to:

• One-time exchanges or multiple exchanges that are performed on the same calendar date
• One-time rebalances
• Adding an automatic exchange or rebalance plan to an existing funded account
• Updating or removing an automatic exchange or rebalance plan after it has drafted at least once
   

Contact us or your financial professional if you are unsure whether the transaction you are considering will constitute a strategy change.

ABLEAmerica distributions

 Most distributions from ABLEAmerica accounts can be requested over the phone or by completing the ABLEAmerica Distribution Request (PDF).

ABLEAmerica accounts are eligible for ACH distributions to the account owner’s bank account. Contact us for requirements to add bank information for ACH distributions.

The total amount of distributions from ABLEAmerica accounts in a given year is reported on Form 1099-QA, which is issued in January of the year following the distribution. Generally, if the money is used for qualified expenses, any earnings are exempt from federal taxes.

Qualified expenses are expenses incurred by an account owner that relate to maintaining or improving their health, independence or quality of life.

Generally, these expenses include but are not limited to:

• 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
• Other expenses the IRS identifies
   

The ABLEAmerica authorized representative or account owner is responsible for confirming an expense is considered qualified. For more information about expenses the IRS considers to be qualified, review IRS Publication 907, Tax Highlights for Persons With Disabilities.

If distributions are used for purposes other than qualified disability expenses, the earnings will be subject to a 10% federal tax penalty in addition to federal and, if applicable, state income tax.