A frequently asked question during our Attainable® webinars from prospective savers is: once I have money in my Attainable® account, how do I go about using those funds? We put together a quick rundown of the basics in using your Attainable® account money. Here you will learn the ins and outs of what a qualified expense is and how to use your account correctly.
How can I use the money in my Attainable® account?
Money in your Attainable® account may be used to pay for qualified disability expenses. An expense is “qualified” if:
- You incurred the expense at a time you were considered an “eligible individual”
- The expense relates to your disability
- The expense helps you maintain or improve your health, independence, or quality of life. Each person is unique and the needs of individuals can vary depending on the disability and circumstances.
What are some examples of qualified disability expenses?
Examples of qualified disability expenses include, but are not limited to:
- Education
- Housing (Note that any withdrawals used for housing need to be used in the same month they are withdrawn)
- Transportation
- Employment training and support
- Assistive technology and related services
- Healthcare
- Financial management and administrative services
- Legal fees
- Funeral and burial
- Basic living expenses
Do withdrawals require approval?
No, money may be withdrawn from an Attainable® account at any time to be spent for qualified disability expenses.
Do I need to prove that I am spending my money on qualified disability expenses?
It is up to you to track how you spend the money in your Attainable® account. Each year, Fidelity will report the total amount of your distributions to the Internal Revenue Service (IRS) as part of their annual tax reporting. The IRS may investigate the distributions from an Attainable® account to determine whether a withdrawal was for a qualified disability expense.
In addition, Attainable® will report to the Social Security Administration the date and amount of each distribution from an Attainable® account. If the individual with a disability receives Supplemental Security Income (SSI) or Medicaid, the Social Security Administration may investigate any distribution to determine whether the withdrawal was for a qualified disability expense.
For this reason, we strongly recommend that you keep records and receipts on how you are spending the money in your Attainable® account. Full View, a tool offered by Fidelity, can help you track your expenses.
What if I use the money in my Attainable® account for a non-qualified disability expense?
If money is withdrawn from an Attainable® account to pay for a non-qualified expense, the earnings portion of the withdrawal should be treated as income, taxed at the designated beneficiary’s tax rate, and will be subject to a 10% federal tax penalty. Additionally, any non-qualified funds you withdraw could be counted against you for purposes of determining your eligibility for means-tested public benefits programs.
There you have it, a basic guideline to spending the funds within your Attainable® account. For more information about Attainable®, visit the dedicated page on our website.
