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
- ALR
- Benefits
- Contributions
- Eligibility
- General
- Gifting
- How the account works
- Linking bank accounts
- Opening an account
- Qualified expenses
- Successors and Estates
- Tax benefits
- Are contributions considered to be an asset?
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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 to my account?
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You can connect a checking or savings account.
- What happens to my state and federal benefits?
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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 As long as the money withdrawn is used for eligible expenses, it won’t...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?
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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?
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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?
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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?
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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?
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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.
