Account overview

Setting up your account

You can set up an ABLE account in as little as 10 minutes. We’ll need your Social Security Number and date of birth to verify your identity and then we’ll ask for some information about the beneficiary, the qualifying disability, and how the ABLE account will be funded. To complete the setup, you’ll customize your account and make decisions about the money added.

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 investment option, you’ll just need to contribute at least $25 across at least one savings or investment option. (For example, you could choose to contribute $5 to one investment portfolio and contribute the remaining $20 to the cash option.)

Remember: $25 is the minimum deposit required to open an Alabama ABLE account with a $5 minimum for any contribution or withdrawal after that.

Adding money

With the online platform powered by Vestwell, adding money to your account is simple and intuitive. Your bank account is securely connected to the Alabama ABLE account to protect your information. You can add money whenever you want, even as little as $1 at a time, to help you reach the $18,000 yearly maximum.

There are a number of ways you can build your savings, including:

• One-time contributions

• Recurring contributions

• Savings Boosters

• SSA direct deposit

• Payroll direct deposit

• ABLE to Work

• Gifting

• Tax credits

Making withdrawals

You can withdraw a minimum of $5 online from your ABLE account to your bank account. And there are many easy ways to access your money — via an electronic transfer to your bank account, via paper check or via the ABLE Prepaid Card.

Fees

There’s an annual fee of $35 for each Alabama ABLE account that is billed quarterly. There are also low fees on the underlying mutual funds, which are a part of each of the investment options, and an administrative fee assessed on the overall account assets. These add up to between 0.30% and 0.34% of the account’s balance per year. Additional fees are added when you opt out of electronic statements or request a withdrawal check, instead of doing everything online. You can check them out in our Fees FAQ.

Tracking your expenses

While we don’t need to see your receipts for qualified disability expenses, the IRS might request them. 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: All ABLE account funds that are spent on non-qualified expenses, will have to pay income tax on the amount, plus a 10% penalty on those earnings. Also, keep in mind that any non-qualified withdrawals are considered income for that month and could count against your eligibility for Supplemental Security Income (SSI) benefits or Medicaid.

Tax advantages of ABLE plans

If you are a resident of Alabama, contributions up to $5,000 per filer may be deductible on your Alabama taxes. In addition, both the earnings from your ABLE account and the money you withdraw are tax free when used for qualified disability expenses.

Remember, if you or your beneficiary live outside of Alabama, you should consider before investing whether your state or your beneficiary's state offer state tax or other benefits for investing in its ABLE plan.