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Transfer 529 Funds to ABLEnow

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Families with a 529 college savings account can transfer funds to an ABLEnow account without incurring any tax or penalty. In accordance with current federal law, this type of transfer is available up until December 31, 2025.

Here are the instructions:

Alternatively, if you have already closed your 529 account and received the funds from your closed 529 account, you may be eligible to deposit these funds into an ABLEnow account within 60 days of the withdrawal by completing the ABLEnow Contribution Form.

Both accounts must have the same beneficiary or the new beneficiary must be an ABLE-eligible “Member of the Family” as defined in Section 529 of the Internal Revenue Code*.  The beneficiary of the ABLEnow account will also be the owner of the ABLEnow account, even if such beneficiary was not the owner of the 529 account.

The amount transferred from a 529 account to an ABLEnow account may not exceed the annual ABLE contribution limit (including the amounts previously contributed by any person to the ABLEnow account that count against the annual contribution limit).

By transferring funds from a 529 account to ABLEnow, families have flexibility to use the funds at any time for a wide range of qualified disability expenses to help the individual with a disability maintain or improve their health, independence and quality of life. In addition, funds saved in an ABLE account won’t affect eligibility for most public disability benefits, including Medicaid and Supplemental Security Income (SSI).

Contact Customer Service or your tax, financial or legal professional for assistance.

 

*Internal Revenue Service (IRS) rules permit a transfer to an ABLE-eligible “Member of the Family” of the 529 account’s designated beneficiary which includes: a son or daughter, or a descendant of either; the 529 designated beneficiary's stepson or stepdaughter; brother, sister, stepbrother, or stepsister; father or mother, or an ancestor of either; stepfather or stepmother; a son or daughter of brother or sister; a brother or sister of the 529 designated beneficiary's father or mother; a son-in-law, daughter-in-law, father in-law, mother-in-law, brother-in-law, or sister-in-law; the spouse of the 529 designated beneficiary or the spouse of any individual described above; or a first cousin of the 529 designated beneficiary. For the purposes of this paragraph, a legally adopted child of the 529 designated beneficiary shall be treated as the child of such individual by blood. The terms “brother” and “sister” include half-brothers and half-sisters.

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