The New York Achieving a Better Life Experience (ABLE) program:
- encourages and assists individuals and families to save private funds in accounts in the program to support individuals with disabilities to maintain health, independence and quality of life.
- is intended to supplement, but not supplant, benefits provided through Medicaid, SSI, SSDI, private insurance and other sources.
- is exempt from tax on its earnings and distributions, provided the funds are used to pay for qualified disability expenses.1
Administration of the NY ABLE Program
The Office of the State Comptroller administers the NY ABLE Program in consultation with specific State agencies and individuals appointed by legislative leaders, as specified in the NY ABLE statute.
How NY ABLE was enacted
- Signed into law by Governor Cuomo in December 2015.
- Authorized by the federal Stephen Beck, Jr. Achieving a Better Life Experience (ABLE) Act enacted on December 19, 2014, as Section 529A of the Internal Revenue Code (Code §529A).
Eligible ABLE participants are New York State residents with a disability which was present before age 26 and EITHER:
- are entitled to SSI or SSDI because of their disability, OR
- if not currently entitled to SSI or SSDI benefits:
- have a written diagnosis from a physician indicating a medically determinable physical or mental impairment which results in marked and severe functional limitations that can be expected to last for at least a year or can cause death; OR
- are classified as blind (as defined in the Social Security Act); OR
- have a disability that’s included on the Social Security Administration’s List of Compassionate Allowances Conditions.
- You can open an account if you’re:
- the eligible individual (An eligible individual is both the NY ABLE account owner and the beneficiary.)
- a parent or legal guardian of the eligible individual
- a person granted Power of Attorney on behalf of the eligible individual
- Anyone can contribute to an eligible individual’s NY ABLE account.
- One ABLE account is allowed per beneficiary.
- Annual contribution cap is equal to the per-donee annual gift tax exclusion amount ($15,000 for 2018) (contributions aren’t tax deductible).
- ABLE account owners who work can contribute an additional annual contribution equal to the federal poverty line for a one-person household ($12,060 for the 2018 tax year), or the account owner’s income, whichever is less.2
- Maximum account balance: $100,000
- Can be used to pay for qualified disability expenses of the account beneficiary.
- Aren’t considered for federal means-tested benefits like Medicaid, SSI or SSDI.
- Investment options range from conservative to aggressive. A checking account and debit card are also offered.
- Account owners who contribute to their accounts may receive a federal tax credit, called a Saver’s Credit, to help save for retirement. Eligibility is based on criteria described here.
- Funds can be rolled over from a 529 College Savings account to an ABLE account for the same beneficiary or a new beneficiary who is a Member of the Family3 of the prior beneficiary, within 60 days of withdrawal, with no federal tax impact, subject to annual ABLE account contribution limits.2
Qualified disability expenses must be related to the eligible individual’s blindness or disability and include expenses related to the following:
- employment training and support
- assistive technology
- personal support services
- financial management
- legal fees
- funeral and burial expenses
- other expenses approved by the Treasury
1 Earnings on non-qualified withdrawals may be subject to federal income tax and a 10% federal penalty tax, as well as state and local income taxes.
2 Applies to contributions made before January 1, 2026.
3 “Member of the Family” is defined in Internal Revenue Code §529.
No Guarantee: None of the State of New York, its agencies, Ascensus Investment Advisors, LLC, Ascensus Broker Dealer Services, Inc., nor any of their applicable affiliates insures accounts or guarantees the principal deposited therein or any investment returns on any account or investment option. Except to the extent of Federal Deposit Insurance Corporation (FDIC) insurance provided for the Checking Option, NY ABLE accounts will be subject to investment risks, including loss of the principal amount invested.