AUTHORITY: Implementing and authorized by Section 16.6 of the State Treasurer Act [15 ILCS 505].

SOURCE: Adopted at 41 Ill. Reg. 7133, effective June 7, 2017; amended at 42 Ill. Reg. 9578, effective May 23, 2018; amended at 45 Ill. Reg. 4133, effective March 12, 2021; amended at 46 Ill. Reg. 19242, effective November 20, 2022.

SUBPART A: INTRODUCTION AND PURPOSE OF PROGRAM

 

Section 722.100  Establishment of Program

 

This Part governs the Achieving a Better Life Experience (ABLE) Account Program created by Section 16.6 of the State Treasurer Act [15 ILCS 505].

 

Section 722.110  Purpose of Program

 

a)         The purpose of the ABLE Program is to encourage and assist individuals and families in saving private funds to support individuals with blindness or disabilities in order to maintain health, independence and quality of life, and to provide secure funding for disability-related expenses that will supplement, but not supplant, benefits provided through private insurance and federal and state medical and disability insurance.

 

b)         The ABLE Program is established pursuant to the federal ABLE Act of 2014 (26 USC 529A), which amended the Internal Revenue Code of 1986 to allow states to establish tax-exempt savings accounts for individuals with blindness or disabilities if those savings are used to cover qualified disability expenses.

 

Section 722.120  Interstate Agreement or Compact

 

The Treasurer may enter into an interstate agreement for joint ABLE-related services, in order to achieve better programming and higher economies of scale in investment options.

SUBPART B: DEFINITIONS

 

Section 722.200  Definition of Terms

 

The following definitions shall apply to this Part:

 

"ABLE" means the federal Achieving a Better Life Experience Act of 2014 (26 U.S.C. 529A, as amended) that creates state-level tax-advantaged savings programs to assist persons with blindness or disability.

 

"ABLE Account Owner" means the owner of an established ABLE account or the prospective owner of an ABLE account that has yet to be established.

 

"ABLE Program" or "Program" means the Illinois ABLE Account Program administered by the State Treasurer under Section 16.6 of the Act.

 

"Act" means the State Treasurer Act, Section 16.6 of which establishes the Illinois ABLE Program.

 

"Account" means an individual investment account established and maintained in the ABLE Program.

 

"Account Administrator" means the person or entity selected by the State Treasurer to administer the daily operations of the ABLE account plan and provide marketing, recordkeeping, investment management, and other services for the plan. [15 ILCS 505/16.6(a)]

 

"Administrative Expenses" means all costs and expenses associated with the implementation and administration of the ABLE Program, including fees payable to third parties providing services related to the plan. 

 

"Administrative Fund" means the Illinois ABLE Accounts Administrative Fund created in Section 5.868 of the State Finance Act [30 ILCS 105].

 

"Aggregate Account Balance" means the amount in an account on a particular date or the fair market value of an account on a particular date. [15 ILCS 505/16.6(a)]

 

"Applicant" means any person who is in the process of applying to open an account in the plan.

 

"Beneficiary" or "Designated Beneficiary" means the ABLE account owner. [15 ILCS 505/16.6(a)]

 

"Designated Representative" means a person or entity who is authorized to act on behalf of a "designated beneficiary".

 

"Disability Certification" means the certification described in Section 529A of the Code and Section 1.529A-1(b)(4) of the Treasury Regulation.

 

"Earnings" means the aggregate total of all dividends and interest income received by the ABLE savings account plan at any time following the plan's commencement. The aggregate total of dividends and interest income shall be reduced by the aggregate total of administrative expenses paid out of the ABLE Program prior to calculating earnings.  Earnings shall be determined without regard to realized or unrealized capital gains and losses incurred by the plan.

 

"Eligible Individual" has the meaning given to that term under Section 529A of the Code. [15 ILCS 505/16.6(a)]

 

"FDIC" means the Federal Deposit Insurance Corporation.

 

"Internal Revenue Code" or "Code" means the federal Internal Revenue Code (26 U.S.C. 1 et seq., as amended).

 

"Investment Policy" means the written statement prepared and adopted by the Treasurer, that sets forth the policies, objectives, and guidelines that govern the investment of moneys in the ABLE Program.

 

"IRS" means the Internal Revenue Service.

 

"Participation Agreement" means an agreement to participate in the ABLE account plan between a designated beneficiary and the State, through its agencies and the State Treasurer. [15 ILCS 505/16.6(a)]

 

"Plan" means the ABLE savings account plan authorized by Section 16.6 of the Act.

 

"Qualified Disability Expenses" means expenses that are qualified under Section 529A of the Code.

 

"Qualified Withdrawal" or "Qualified Distribution" means a withdrawal from an ABLE account to pay the qualified disability expenses of the designated beneficiary of the account. [15 ILCS 505/16.6(a)]

 

"Secretary" means the U.S. Secretary of the Treasury.

 

"SSA" means the Social Security Administration.

 

"SSI Limit" means the Supplemental Security Income limit.

 

"Treasurer" means the duly elected Treasurer of the State of Illinois or the Treasurer's designee or designees.

 

"Treasurer's Website" means www.illinoistreasurer.gov, or any successor website.

 

"Treasury Regulation" means Treasury Regulation 1.529A-0 through 1.529A-8, codified at 26 CFR 1.529A-0 through 1.529A-8, as interpreted by Guidance Under Section 529A: Qualified ABLE Programs, 85 Fed. Reg. 74,010 (Nov. 19, 2020).

 

(Source:  Amended at 46 Ill. Reg. 19242, effective November 20, 2022)

SUBPART C: ADMINISTRATION

 

Section 722.300  Responsibilities of the Treasurer

 

The Treasurer is the State administrator and program manager of the ABLE Program.  The Treasurer's duties include, but are not limited to:  the appointment of an account administrator and other tasks necessary to administer the Program.  The Treasurer will contract with one or more third parties to carry out administrative duties, including:  accepting and processing applications, maintaining accounting records, and making payments.  The Treasurer is also responsible for establishing fees to be imposed on participants to cover the expenses of administration, recordkeeping and investment management.

 

(Source:  Amended at 45 Ill. Reg. 4133, effective March 12, 2021)

 

Section 722.310  Investment Policy and Guidelines

 

a)         The investment policy is a written statement prepared by the Treasurer describing the risk management and oversight program.

 

b)         The investment policy will be designed to:

 

1)         ensure that an effective risk management system is in place to monitor the risk levels of the ABLE Program;

 

2)         ensure that the risks taken are prudent and properly managed;

 

3)         provide an integrated process for overall risk management;

 

4)         assess investment returns; and

 

5)         assess risks to determine if the risks taken are adequately compensated compared to applicable performance benchmarks and standards.

 

c)         The investment policy shall be reviewed annually.

 

d)         The investment policy will be posted on the Treasurer's website.

 

e)         The Treasurer will utilize the following investment principles when constructing, evaluating, and selecting the investment framework, investment options, and investment funds for ABLE accounts:

 

1)         Simplicity – The Program's investment portfolios and asset allocation model will be constructed and administered in a manner that provides a range of clear, easily understood options (defined in terms of expected risk/return) in order to maximize participation and provide opportunities for investment returns for designated beneficiaries.  Furthermore, the Program will be designed and administered in a manner that promotes full transparency by delineating all accordant investment expenses.

 

2)         Low Cost – The Program's investment options will be constructed and administered in a manner that is designed to minimize investment fees to designated beneficiaries while still providing value to designated beneficiaries and meeting the investment option's risk and return objectives.  The lowest cost index-based investment funds will be viewed as the default standard in evaluating investment management fees.

 

3)         Investment Horizons and Risk Tolerances – The Program's investment options will account for a diversity of time horizons (e.g., short-term, long-term) and risk tolerances (e.g., aggressive, moderate, conservative) among designated beneficiaries.  Portfolios will also be constructed in a manner that accounts for investment time horizons and risk tolerances through the utilization of investment options including, but not limited to, those listed in subsection (f).

 

4)         Open Architecture – The Program's investment framework will utilize an open architecture plan design, meaning it will not be required to select proprietary investment funds or investment options.  The open architecture design is intended to offer appropriate authority benefits, such as access to best in class managers, increased flexibility when choosing underlying investment strategies, and the ability to minimize designated beneficiary fees on underlying investment funds and accounts.

 

5)         Passive Versus Active Funds – The Program's investment options will consist of passively managed strategies that replicate the risk and return characteristics of its respective benchmark. In asset classes in which passively managed strategies are not prevalent or in asset classes that are deemed to be inefficient, actively managed strategies may be considered.

 

f)         The Treasurer will establish  investment options for any or all of  the following categories:

 

1)         Static Portfolio Investment Option, which shall be composed of fixed asset allocations to fit a participant's risk profile (i.e., aggressive, moderate or conservative risk profiles).  These options will be invested in pooled investment vehicles, such as mutual funds, that include some or all of the following asset classes:

 

A)        domestic and international equity;

 

B)        domestic and international fixed income;

 

C)        real estate investment trusts (REITs); and

 

D)        cash and cash equivalent (i.e., money market funds).

 

2)         Banking Option, which will be a short-term investment option in the form of a Demand Deposit Account.  The banking option will be a Federal Deposit Insurance Corporation (FDIC) insured bank account whose primary objective is the preservation and safety of the principal and the provision of a stable and low-risk rate of return.

 

3)         Pre-mixed Dynamic Portfolio Option, which shall be composed of dynamic asset allocations and rebalancing of portfolios based on a participant's age and/or a target date.  These options will be invested in pooled investment vehicles, such as mutual funds, that include some or all of the following asset classes:

 

A)        domestic and international equity;

 

B)        domestic and international fixed income;

 

C)        real estate investment trusts (REITs); and

 

D)        cash and cash equivalent (i.e., money market funds).

 

(Source:  Amended at 45 Ill. Reg. 4133, effective March 12, 2021)

 

Section 722.320  Account Administration/Administrator

 

The account administrator is responsible for the day-to-day oversight and management of the ABLE Program, including coordinating with any third party investment managers or recordkeepers to ensure the safekeeping of the Program accounts.

 

(Source:  Amended at 45 Ill. Reg. 4133, effective March 12, 2021)

 

Section 722.330  Recordkeeping and Recordkeeping Responsibilities

 

The Treasurer will contract with an account administrator to manage recordkeeping for the ABLE Program. The account administrator shall provide all services needed for the effective operation of the Program in accordance with all applicable federal and State laws and regulations. These services shall include, but are not limited to:

 

a)         developing forms and any operating documents;

 

b)         processing enrollments and obtaining completed forms and follow-up documentation;

 

c)         maintaining designated beneficiary accounts as outlined in ABLE;

 

d)         receiving contributions;

 

e)         blocking receipt of excess contributions;

 

f)         disbursing funds;

 

g)         providing designated beneficiaries with account information, transaction confirmations and account statements;

 

h)         complying with applicable SSA, banking, tax and security law requirements;

 

i)          filing required reports and forms with federal agencies; and

 

j)          providing fraud prevention.

 

(Source:  Amended at 45 Ill. Reg. 4133, effective March 12, 2021)

 

Section 722.340  Enrollment and Fees

 

a)         An applicant may apply, on forms prescribed by the Treasurer, to open an ABLE account. A designated beneficiary may have only one account.  The Treasurer may impose a nonrefundable application fee.  The application fee shall not exceed $100.

 

b)         The Treasurer may charge the designated beneficiary an annual administrative fee, not to exceed $20.  This fee may be charged to defray certain expenses (e.g., marketing, auditing and program oversight) incurred by the Treasurer in administering the ABLE Program.

 

c)         For the Program's investment options, the investment manager shall charge fees and expenses, which shall be reflected in the returns received from each investment option.  The account administrator shall also charge fees and expenses for maintaining and administering the Program.

 

(Source:  Amended at 45 Ill. Reg. 4133, effective March 12, 2021)

 

Section 722.350  ABLE Administrative Fund

 

The Illinois ABLE Accounts Administrative Fund is created as a non-appropriated trust fund in the State treasury.  The State Treasurer shall use moneys in the Administrative Fund to cover administrative expenses incurred, as provided for in Section 530. The Administrative Fund may receive any grants or other moneys designated for administrative purposes from the State, or any unit of federal, state, or local government, or any other person, firm, partnership, or corporation. Any interest earnings that are attributable to moneys in the Administrative Fund must be deposited into the Administrative Fund. Any fees established by the State Treasurer to cover the costs of administration, recordkeeping, and investment management shall be deposited into the Administrative Fund.  [15 ILCS 505/16.6(g)]

 

(Source:  Amended at 45 Ill. Reg. 4133, effective March 12, 2021)

 

Section 722.360  Marketing and Promotion

 

The Treasurer is responsible for the marketing and promotion of the Program and may hire a third party contractor to assist with these efforts.

 

(Source:  Amended at 45 Ill. Reg. 4133, effective March 12, 2021)

 

Section 722.370  Contracting States (Repealed)

 

(Source:  Repealed at 46 Ill. Reg. 19242, effective November 20, 2022)

 

Section 722.380  Forms

 

The Treasurer may use forms provided or promulgated by the SSA, the IRS, or other federal agencies pursuant to ABLE.  The Treasurer may also promulgate its own forms reasonably necessary to implement the ABLE Program and comply with statute, rules and regulations.  The account administrator is responsible for ensuring forms required by statute, rule or regulation are completed.

 

(Source:  Amended at 45 Ill. Reg. 4133, effective March 12, 2021) 

SUBPART D: PARTICIPATION AND ENROLLMENT IN THE PROGRAM

 

Section 722.400  Eligibility

 

An individual is an eligible individual for a taxable year if, during that taxable year, the individual meets the requirements under Section 529A(e)(1) of the Code.

 

(Source:  Amended at 46 Ill. Reg. 19242, effective November 20, 2022)

 

Section 722.410  Authority to Establish and Manage an ABLE Account

 

a)         An eligible individual may establish an ABLE account on their own behalf as a designated beneficiary, or a person or entity recognized as a designated representative under this Section may establish an ABLE account for a designated beneficiary who is also an eligible individual.

 

b)         A designated beneficiary is authorized to act on his or her own behalf unless the designated beneficiary is a minor or the designated beneficiary has been adjudicated to have a disability so that a guardian has been appointed.

 

c)         A designated beneficiary who is authorized to act on their own behalf under subsection (b) may select any person or entity, not otherwise prohibited from acting as a fiduciary, to act as a designated representative.

 

d)         If a designated beneficiary is not authorized under subsection (b) to act on their own behalf, the Treasurer shall recognize a person or entity listed in subsection (e) as a designated representative, in accordance with Section 1.529A-2(c)(1)(i)(C) of the Treasury Regulation.

 

e)         The Treasurer will recognize the following as a designated representative without appointment by a court in the following order:

 

1)         The agent named by the designated beneficiary in a property power of attorney in accordance with the Illinois Power of Attorney Act [755 ILCS 45] or the law of the state of residence of the designated beneficiary.

 

2)         The designated beneficiary's guardian of the person, plenary guardian of the estate, limited guardian of financial or contractual matters, or any other State-appointed guardian, including the Office of the State Guardian. A guardian acting in this capacity shall not be required to seek court approval for any ABLE account activity.

 

3)         A spouse, parent, sibling, or grandparent, in that order, of the designated beneficiary.

 

4)         A representative payee appointed for the designated beneficiary by the SSA.

 

f)         A designated representative acts in a fiduciary capacity to the designated beneficiary. [15 ILCS 505/16.6(a)]

 

g)         A person or entity seeking to be recognized by the Treasurer as a designated representative shall provide a certification, made under penalties of perjury, as to the basis for the person’s or entity’s authority to act as the designated representative and that there is no other person or entity with a higher authority to establish the ABLE account under Section 529A of the Code and Section 1.529A-2(c)(1)(i) of the Treasury Regulation. The certification shall meet the requirements of the certification permitted by Section 1.529A-2(c)(1)(ii) of the Treasury Regulation. The Treasurer may require a person or entity seeking to open an account as a designated representative to provide documentation to establish by a preponderance of the evidence the person’s or entity’s authority to act on behalf of a designated beneficiary when the Treasurer determines proof of that authority is necessary or beneficial to the administration of the program.

 

h)         If a designated representative is a nonresident of Illinois, the Clerk of the Circuit Court of Cook County will be the agent for service of process.

 

(Source:  Amended at 46 Ill. Reg. 19242, effective November 20, 2022)

 

Section 722.420  Enrollment Application

 

a)         The Treasurer will require an applicant to submit an application, including the following information:

 

1)         The name, address, social security number or individual taxpayer identification number, and birth date of the designated beneficiary;

 

2)         The name, address, and social security number or individual taxpayer identification number of the designated representative, if the designated beneficiary is not the applicant;

 

3)         Certification, under penalties of perjury, regarding the following subjects:

 

A)        that all of the information provided on the form is accurate and complete;

 

B)        that the designated beneficiary qualifies as an eligible individual under Section 529A(e) of the Code in accordance with Section 1.529A-2(d) – (e) of the Treasury Regulation;

 

C)        that the applicant will promptly notify the ABLE Program if the designated beneficiary no longer qualifies as an eligible individual;

 

D)        that, to the best of the applicant’s knowledge, no other ABLE program account exists for the benefit of the designated beneficiary, except in the case of a rollover from an account in another ABLE program; and

 

E)        If the applicant is seeking to open the account as a designated representative, the applicant shall provide a certification as to the basis for the applicant's authority to act as the designated representative and that there is no other person or entity with a higher authority to establish the ABLE account under Section 529A of the Code and Section 1.529A-2(c)(1)(i) of the Treasury Regulation. The certification must be in accordance with Section 1.529A-2(c)(1)(ii) of the Treasury Regulation.

 

4)         Any additional certification, information, or documentation that may be beneficial to the administration of the program, or that is needed to clarify the application when the information submitted in the application is unclear or insufficient, or when further information is required by the Code or Treasury Regulations.

 

b)         Completed applications shall be submitted as specified on the application form.

 

c)         Applications that are incomplete or fail to meet the requirements established by the Treasurer in this Part in an effort to comply with section 529A of the Internal Revenue Code or this Part shall be rejected.

 

(Source:  Amended at 46 Ill. Reg. 19242, effective November 20, 2022)

 

Section 722.430  Signature Authority

 

a)         Account Signature Authority

 

1)         The designated beneficiary has signature authority over their account.

 

2)         Except as recognized in subsection (b), if a person or entity other than the designated beneficiary is recognized as the designated representative pursuant to Section 722.410, that person or entity has signature authority.

 

b)         In the case of a designated representative selected by a designated beneficiary who is authorized to act on their own behalf under Section 722.410(b), both the designated representative and the designated beneficiary may have signature authority.

 

c)         At any time, the designated beneficiary, who is authorized to act on their own, may remove and replace a designated representative. The replacement may be any other person or entity selected by the designated beneficiary pursuant to Section 722.410(c) or the designated beneficiary may exercise signature authority over their own account.

 

d)         The designated beneficiary may designate a successor designated representative. In the absence of the designation of a successor by the designated beneficiary, a designated representative may designate a successor pursuant to the order specified in Section 722.410(e).

 

e)         Co-signatories and sub-accounts may be allowed in accordance with Section 1.529A-2 of the Treasury Regulation.

 

(Source:  Added at 46 Ill. Reg. 19242, effective November 20, 2022)

SUBPART E: ACCOUNTS, INVESTMENTS AND STATEMENTS

 

Section 722.500  ABLE Accounts

 

ABLE accounts are investment savings accounts into which the designated beneficiary deposits funds that, in turn, are invested in marketplace-based investment options such as FDIC insured interest bearing accounts. Earnings on the investments are tax-free as long as withdrawals are used to pay qualified disability expenses. A separate account will be established for each designated beneficiary, and no more than one account will be established per beneficiary.  If an ABLE account is established for a designated beneficiary, no account subsequently established for that beneficiary shall be treated as an ABLE account.  The preceding sentence shall not apply in the case of an ABLE account established for purposes of a rollover as permitted under sections 529 and 529A of the Internal Revenue Code.  [15 ILCS 505/16.6(d)]

 

(Source:  Amended at 45 Ill. Reg. 4133, effective March 12, 2021)

 

Section 722.510  Allocation of Investment Earnings or Losses

 

Investment earnings in excess of the administrative expenses of the ABLE Program and all monies collected by the ABLE Program as penalties as a result of withdrawals that are not used to pay qualified disability expenses, after the payment of expenses:

 

a)         will be credited or paid monthly to participants in the ABLE Program in a manner that reflects:

 

1)         the differing amounts of their respective investments in the ABLE Program; and

 

2)         the differing periods of time for which those amounts were in the custody of the ABLE Program; and

 

b)         will be allocated among the ABLE Program's underlying investment portfolios in a manner determined by the Treasurer.

 

(Source:  Amended at 45 Ill. Reg. 4133, effective March 12, 2021)

 

Section 722.520  Limits on Investment and Directions

 

a)         A designated beneficiary under the ABLE Program shall, no more than two times in any calendar year, direct the investment of any contributions to the Program, along with any earnings on those investments.

 

b)         To the extent allowed under Section 529A of the Code and the Treasury Regulation, the Treasurer may, from time to time, establish a default investment allocation for accounts under the Program.

 

c)         The assets of ABLE accounts and their income may not be used as security for a loan.  All assets of the plan, including any contributions to accounts, are held in trust for the exclusive benefit of the designated beneficiary and shall be considered spendthrift accounts exempt from all of the designated beneficiary's creditors. [15 ILCS 505/16.6(m)]

 

(Source:  Amended at 46 Ill. Reg. 19242, effective November 20, 2022)

 

Section 722.530  Administrative Expenses

 

a)         The administrative expenses of the ABLE Program may be paid from the Administrative Fund.

 

b)         Administrative expenses may be paid from fees established pursuant to Section 340. The fees may be deducted from the principal and earnings of each account. Administrative expenses will be allocated among the ABLE Program's underlying investment portfolios to cover the costs of administration, recordkeeping, and investment management, and payments to third parties.  These administrative fees, costs, and expenses may be imposed on accounts.

 

c)         Subject to appropriation, the State Treasurer may pay administrative costs associated with the creation and management of the plan until sufficient assets are available in the Administrative Fund for that purpose. [15 ILCS 505/16.6(g)]

 

d)         The Treasurer may permit a third party service provider to provide compensation to participating financial institutions or other financial services providers that promote the ABLE Program to their customers.

 

(Source:  Amended at 45 Ill. Reg. 4133, effective March 12, 2021)

 

Section 722.540  Participant Statements

 

Account statements shall be provided to designated beneficiaries and designated representatives. The account statements may be sent via U.S. mail and/or provided electronically via website access or e-mail, as selected by the designated beneficiary or designated representative.  Account statements may also be provided to other individuals authorized to receive that information under the Electronic Signatures in Global and National Commerce Act (15 USC 96 et seq.) and the Truth in Lending Act (15 USC 1601 et seq.).

 

(Source:  Amended at 45 Ill. Reg. 4133, effective March 12, 2021)

 

Section 722.550  Conversions and Rollovers

 

a)         At the direction of the Treasurer, the account administrator shall develop processes through which a designated beneficiary may roll over an account from the Illinois ABLE Program to a different state's ABLE program, for either the same designated beneficiary or an allowable new eligible individual. The Illinois ABLE Program may receive rollovers from other states' ABLE programs. Rollover processes shall conform to the requirements set forth in the Treasury Regulation.

 

b)         The Treasurer will require that during a conversion, the account administrator shall take all commercially reasonable steps necessary to effect an orderly transition of the relevant portions of its duties and responsibilities in a manner that provides for reasonable consideration for the best interests of the designated beneficiaries, avoids the likelihood of an increase in economic loss, and avoids the likelihood of resulting liability to the Treasurer. The Treasurer will further require that the account administrator shall use commercially reasonable efforts to ensure that the account administrator and its agent do not impede or delay the orderly transfer of its duties and responsibilities.

 

(Source:  Amended at 46 Ill. Reg. 19242, effective November 20, 2022)

 

Section 722.560  Contributions

 

a)         Any person or entity may make contributions to an ABLE account after the account is opened, in accordance with and subject to, the limitations imposed by section 529A(b)(2) of the Code and Section 1.529A-2(g) of the Treasury Regulation.

 

b)         Annual contributions are limited to the amount excluded from the federal gift tax under federal law (26 U.S.C. 2503(b)).

 

c)         The ABLE Program will not accept contributions that exceed the annual contribution limit under Section 529A(b)(2)(B) of the Code except for compensation contributions under Section 529A(b)(2)(B)(ii) of the Code. 

 

d)         A designated beneficiary who is an employee as described under Section 529A(b)(7) of the Code may make additional compensation contributions as described in Section 529A(b)(2)(B)(ii) and Section 1.529A-2(g)(2)(ii) of the Treasury Regulation.  The employed designated beneficiary or, if the employed designated beneficiary has a designated representative, the designated representative is solely responsible for ensuring that any compensation contribution made by the designated beneficiary meets the requirements of Section 529A(b)(2)(B)(ii) of the Code and Section 1.529A-2(g)(2)(ii) of the Treasury Regulation and for requesting the return of any excess compensation contributions.

 

e)         An employed designated beneficiary seeking to make contributions under Section 529A(b)(2)(B)(ii) of the Code or the beneficiary’s designated representative shall certify under penalties of perjury in accordance with Section 1.529A-2(g)(v)(B) of the Treasury Regulation that:

 

1)         the designated beneficiary is an employed designated beneficiary; and

 

2)         the designated beneficiary’s contributions of compensation are not excess compensation contributions.

 

f)         The ABLE Program may allow the designated beneficiary or designated representative to restrict persons that may make contributions to the designated beneficiary’s account.

 

(Source:  Amended at 46 Ill. Reg. 19242, effective November 20, 2022)

 

Section 722.570  Aggregate Account Balance Limits

 

The ABLE Program shall provide safeguards to prevent aggregate contributions on behalf of a designated beneficiary in excess of the limit under 23 Ill. Adm. Code 2500.90 pursuant to Section 529(b)(6) of the Code. As permitted under Section 1.529A-2(g)(3)(ii) of the Treasury Regulation, the ABLE Program will comply with this requirement by refusing to accept any additional contributions to an ABLE account, except as otherwise permitted by Section 1.529A-2 of the Treasury Regulation, while the aggregate account balance in that account equals or exceeds the limit established by the State under 23 Ill. Adm. Code 2500.90 pursuant to Section 529(b)(6) of the Code. Once the aggregate account balance falls below that limit, additional contributions may again be accepted, subject to the annual contribution limit described in Section 722.560 of this Part.  For purposes of this Section, aggregate contributions include contributions under any prior qualified ABLE program of any state or agency or instrumentality of either.

 

(Source:  Amended at 46 Ill. Reg. 19242, effective November 20, 2022)

SUBPART F: WITHDRAWALS OR DISTRIBUTIONS

 

Section 722.600  Qualified Withdrawals/Distributions

 

A qualified withdrawal/distribution is a withdrawal or a distribution from an ABLE account to pay the qualified disability expenses of the designated beneficiary of the account.

 

(Source:  Amended at 45 Ill. Reg. 4133, effective March 12, 2021)

 

Section 722.610  Qualified Disability Expense

 

Under section 529A(e)(5) of the Code, qualified disabilities expenses are expenses related to the eligible individual's blindness or disability that are made for the benefit of an eligible individual who is the designated beneficiary, including, but not limited to, the following expenses:

 

a)         education;

 

b)         housing;

 

c)         transportation;

 

d)         employment training and support;

 

e)         assistive technology and personal support services;

 

f)         health, prevention and wellness;

 

g)         financial management and administrative services;

 

h)         legal fees;

 

i)          expenses for oversight and monitoring;

 

j)          funeral and burial expenses; and

 

k)         other expenses approved by the Secretary under federal regulations and/or guidance.

 

(Source:  Amended at 45 Ill. Reg. 4133, effective March 12, 2021)

 

Section 722.630  Federal Reporting Requirements

 

The Program will comply with all reporting responsibilities as outlined in Section 529A of the Code and the Treasury Regulation. The Treasurer will compile or cause to be compiled the needed information to complete any reports.

 

(Source:  Amended at 46 Ill. Reg. 19242, effective November 20, 2022)

SUBPART G: MISCELLANEOUS

 

Section 722.700  Death of a Designated Beneficiary

 

Upon the death of the designated beneficiary, proceeds from an account may be transferred to the estate of a designated beneficiary, or to an account for another eligible individual specified by the designated beneficiary or the estate of the designated beneficiary, or transferred pursuant to a payable on death account agreement. A payable on death account agreement may be executed by the designated beneficiary or a designated representative who has been granted such power. Upon the death of a designated beneficiary, prior to distribution of the balance to the estate, account for another eligible individual, or transfer pursuant to a payable on death account agreement, the State Treasurer may require verification that the funeral and burial expenses of the designated beneficiary have been paid.  An agency or instrumentality of the State may not seek payment under section 529A(f) of the Code from the account or its proceeds for benefits provided to a designated beneficiary.  [15 ILCS 505/16.6(o)]

 

(Source:  Amended at 46 Ill. Reg. 19242, effective November 20, 2022)

 

Section 722.710  Missing Persons/Abandonment

 

An ABLE account will be presumed abandoned according to the unclaimed property law of the state of the last known address of the designated beneficiary.  If the last known address of the designated beneficiary is in Illinois, the provisions of the Revised Uniform Unclaimed Property Act [765 ILCS 1026] shall apply. If there is no last known address of the designated beneficiary in the records of the Treasurer, pursuant to federal common law the provisions of the Revised Uniform Unclaimed Property Act shall apply.

 

(Source:  Amended at 45 Ill. Reg. 4133, effective March 12, 2021)

 

Section 722.720  Nonassignability

 

The contract entered into between the Treasurer and a designated beneficiary under the Program, and the benefits, proceeds or payments under the Program cannot be sold, assigned, pledged, commuted, transferred or otherwise conveyed by a vendor, State agency or designated beneficiary. Any attempt to assign or transfer shall not be recognized and shall impose no liability upon the Treasurer.

 

(Source:  Amended at 45 Ill. Reg. 4133, effective March 12, 2021)

 

Section 722.730  Website

 

Information regarding the ABLE program is available on the Treasurer's website.

 

(Source:  Amended at 45 Ill. Reg. 4133, effective March 12, 2021)

 

Section 722.740  Excess Contributions

 

a)         If any contribution or any portion of a contribution is deposited into or allocated to an account in excess of the limits under Section 560(b) or Section 570, or the Program is made aware that it received an excess compensation contribution under Section 560(d), the Program must return the amount of the excess contribution to the person or persons that made the contribution along with all net income attributable to such excess, in accordance with and as required by Section 1.529A-2(g)(4) of the Treasury Regulation.  In accordance with Section 1.529A-6(a)(2) of the Treasury Regulation, the Program must also furnish the required federal tax information to the designated beneficiary of the ABLE account and to each contributor who received a returned contribution in accordance with Section 1.429A-2(g)(4) of the Treasury Regulation. Tax consequences of any excess contribution are the responsibility of the person who made the excess contribution.

 

b)         If a contribution or portion of a contribution in excess of the limits under Section 722.560 or 722.570 is returned to a contributor other than the designated beneficiary, the ABLE Program must notify the designated beneficiary or the designated representative of such return at the time of the return. No notification is required if the amounts are rejected by the Program before they are deposited or allocated into the designated beneficiary’s account.

 

c)         If the Program directs the account administrator to carry out the Program’s obligations under this Section, the account administrator will carry out these obligations as required by Sections 1.529A-2(g)(4) and 1.529A-6(a), (b) of the Treasury Regulation.

 

(Source:  Amended at 46 Ill. Reg. 19242, effective November 20, 2022)

 

Section 722.750  Change of Designated Beneficiary

 

A change in the designated beneficiary during the lifetime of the designated beneficiary shall be permitted to the extent allowed by Section 529A of the Code and the Treasury Regulation.

 

(Source:  Added at 46 Ill. Reg. 19242, effective November 20, 2022)

SUBPART H: AMENDMENT OF RULES

 

Section 722.800  Amendment of Rules

 

Notice of any proposed substantive amendment to this Part shall be provided to all designated beneficiaries and designated representatives prior to adoption. Notice may be provided by e-mail or U.S. mail. The notice need not include a full copy of the proposed amendments.  Amendments to this Part automatically amend the participation agreement. Any amendments to the operating procedures and policies of the plan shall automatically amend the participation agreement after adoption by the Treasurer. [15 ILCS 505/16.6(l)]

 

(Source:  Amended at 45 Ill. Reg. 4133, effective March 12, 2021)