Frequently asked questions
Scroll down to see answers to things we get asked a lot. If you're looking for something specific, enter or choose a keyword below.
- About ABLE
- How the account works
- Opening an account
- Qualified expenses
- Tax info
- Are contributions considered to be an asset?
The money in the account generally isn’t considered to be an asset for state and federal means-tested benefit purposes. For Supplemental Security Income (SSI) benefits only, you can have up to $100,000 in the account before the funds start to count against the $2,000 asset limit.
- What type of bank accounts can I add?
You can connect a checking or savings account to any Maryland ABLE account. These types of accounts use ACH payments, which are a fast and efficient way to make electronic payments.
- What happens to my state and federal benefits?
For Supplemental Security Income (SSI) benefits only, you can have up to $100,000 in the account before the funds start to count against the $2,000 asset limit.
Other federal and Maryland state means-tested benefits are not affected, regardless of the balance in the account.
- Does having an account affect my other benefits?
- You can keep your federal and state benefits (SSI, SSDI, Medicaid, SNAP, TANF, HUD Assistance, Section 8, etc.) with an ABLE account. If you receive SSI, there is a $100,000 limit before Social Security benefits are affected. As long as the money withdrawn is used for eligible expenses, it won’t... Read more
- Will having an account make me ineligible for Medicaid?
No. Having an ABLE account doesn’t count towards your eligibility for Medicaid regardless of the amount in the ABLE account.
- Do I have to pay taxes on my account?
- As long as the money in your Maryland ABLE account is used for eligible expenses, it won’t be counted as income for your state or federal taxes. If a purchase doesn’t qualify as an eligible expense, you’ll have to pay taxes and a 10% penalty on the amount. If you want to know more about the IRS... Read more
- What are the tax laws that govern ABLE accounts?
The ABLE Act was modeled after the 529 college savings tax code. The ABLE Act adds ABLE Accounts under Section 529A of the IRS tax code.
- Who qualifies for an income deduction on their State taxes?
Maryland offers up to a $2,500 income deduction per contributor, per beneficiary, on your Maryland State tax return.
- Are there any Federal tax deductions for ABLE contributions?
No, the Federal tax benefit is the fact that the account grows tax free, eliminating the need to pay capital gains on the money accruing in your account.
- Can out-of-state contributors receive tax deductions?
Some states offer parity, meaning that the contributor’s state of residence may offer a state deduction for putting money into another state’s plan. It would be dependent upon each state’s individual program.