Families with a 529 college savings account can transfer funds to an ABLEnow account without paying taxes or penalties. This lets families use their saving more flexibly for qualified disability expenses that support their loved one’s health, independence and quality of life.
Things to Consider
- Unlike other rollovers, 529-to-ABLEnow transfers can be made more than once per year.
- These transfers count toward the ABLE annual contribution limit, along with any other contributions.
- The beneficiary of both accounts must be the same person, or the new beneficiary must be an ABLE-eligible “Member of the Family” (as defined by the IRC Code*).
- The beneficiary of the ABLEnow account will also be the owner of the ABLEnow account, even if they weren’t the owner of the 529 account.
How to Transfer Your Funds
Transfers can be completed in two easy steps:
Step 1: Open an ABLEnow account. Already have an account? Skip to Step 2.
Step 2: Complete the ABLEnow Incoming Direct Rollover Form.
If the Invest529 account is already closed and you’ve received the funds, you may still be able to deposit them into an ABLEnow account. Complete and submit the ABLEnow Incoming Indirect Rollover Form within 60 days of the withdrawal.
Contact ABLEnow Customer Service for questions about transferring funds from a 529 to ABLEnow. Consult your tax, financial or legal professional for more information about your specific situation and consequences of a transfer.
*Internal Revenue Service (IRS) rules permit a transfer to an ABLE-eligible “Member of the Family” which includes the 529 designated beneficiary’s: son or daughter, or a descendant of either; 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 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 designated beneficiary or the spouse of any individual described above; or a first cousin of the designated beneficiary. For the purposes of this paragraph, a legally adopted child shall be treated as the child of such individual by blood. The terms “brother” and “sister” include half-brothers and half-sisters.
