Learn what you need to know to set up a Maryland ABLE account and what your options mean
Setting up your account
You have 2 options for enrollment. You can complete a paper application and mail it in or you can enroll here on line. When opening a Maryland ABLE account, there are 3 steps:
Step 1: Gather identifying information such as the beneficiary’s and Authorized Legal Representative’s (if applicable) social security number, and information about how the person qualifies for an ABLE account.
Step 2: We send you an email confirming your account is ready to open.
Step 3: Have information about the bank that you want to link to your ABLE account and begin depositing money to fund your ABLE account.
While you’re enrolling, you can choose to save your money in a cash option, invest it, or both. Keep in mind that if you decide to split your contributions between the cash and one or more investment options, you’ll need to put at least 10% of your deposit when contributing to any investment options you select at the time of deposit.
Remember: $25 is the minimum deposit required to open a Maryland ABLE account with a $10 minimum for any contribution or withdrawal after that.
The online platform is powered by Vestwell, the Maryland ABLE program administrator, to securely connect your ABLE and bank accounts while protecting your information.
This platform makes it easy to add money whenever you want, however you want — via individual transactions or monthly automatic transfers — to help you reach the yearly standard contribution maximum ($17,000).
Users can contribute to their accounts using fast, secure direct deposits from either the Social Security Administration or their paycheck.
Complete the setup process in three simple steps:
Log in to your ABLE account and click on “Direct Deposit” on the Total Balance tile
Enter your information and retrieve your direct deposit details - including a unique routing and account numbers
Complete the process by:
a) SSA Direct Deposit: Updating your direct deposit details with the SSA
b) Payroll Direct Deposit: Providing your employer with the direct deposit details, the same as you would with your own checking or savings account
Friends and family can also add money via gift contributions, but each account can only receive standard contributions from all sources up to a total of $17,000 per calendar year.
Tracking your expenses
While we don’t need to see your receipts for qualified disability expenses, the IRS might. So, in addition to tracking your spending in the online expense tracker, it’s best to keep documentation for your eligible purchases.
Keep in mind: For all ABLE account funds that are spent on non-eligible expenses, you will have to pay taxes on the earnings, plus a 10% penalty on those earnings. Also, keep in mind that any non-qualified withdrawals are considered to be income for that month and could count against your eligibility for Supplemental Security Income (SSI) benefits or Medicaid.
Tax advantages of ABLE Plans
Both the earnings from your ABLE account and the money you withdraw are tax free when used for qualified disability expenses. For Maryland taxpayers, contributions to your account could qualify for an income deduction. Each contributor may deduct up to $2,500 a year for single filers (and $5,000 for joint filers) on their State taxes for each beneficiary to whom they contribute. For example, if a Maryland taxpayer contributes $2,500 to beneficiary A’s ABLE account, and $2,500 to beneficiary B’s ABLE account, they may be eligible to subtract $5,000 from their federal adjusted gross income to determine their Maryland adjusted gross income.
Remember, if you or your beneficiary live outside of Maryland, you should consider whether your state or your beneficiary's state offer state tax or other benefits for saving and investing in its ABLE plan.