An ABLE account is an investment account available to eligible individuals. ABLE accounts are made possible by the Federal Achieving a Better Life Experience Act. ABLE accounts allow individuals with disabilities to save and invest money without losing eligibility for certain public benefits programs. Earnings as a result of an ABLE account are not subject to federal or state income tax, provided such earnings are used on qualified expenses.

To learn more about opening an ABLE account and other information regarding the ABLE program, please visit the Missouri State Treasurer’s website at https://www.moable.com/faq/.

Annual contributions of $8,000 for single individuals or $16,000 for married couples filing a combined return can be subtracted on the Missouri income tax return when determining Missouri adjusted gross income. (See below for more information on how to claim the subtraction.)

Taxpayers claiming the ABLE subtraction need to complete a Missouri income tax return (Form MO-1040) and claim the subtraction on a supporting form (Form MO-A, Part 1). For tax year 2017, the subtraction is claimed on line 15 of Form MO-A. The subtraction amount from Form MO-A is then carried over to line 4 of the Missouri income tax return as a subtraction from federal adjusted gross income (in determining Missouri adjusted gross income).

The individual who made the contributions to the ABLE account must provide one or more of the following when claiming the ABLE subtraction on their Missouri return:

  • Bank statements reporting/verifying the contribution date and contribution amount,
  • Copies of cancelled checks,
  • Form 5498-QA, or
  • Other supporting documentation verifying the name of the individual who contributed to the ABLE account, contribution dates, and contribution amounts.

Note: In order to verify contributions that were deducted from your paycheck, your employer must provide you with documentation or verification that the deductions occurred and were paid, on your behalf, by your employer to the ABLE Program.

Yes, some e-file software packages allow PDF’s to be attached when e-filing tax returns. If your e-file software does not allow for PDF’s to be attached, please email your PDF of the supporting documentation to the Department at income@dor.mo.gov. Please indicate in your email the date you e-filed your return and that you are providing documentation for the ABLE subtraction.

For questions regarding the ABLE program related to your Missouri income tax return, please email the Department of Revenue at income@dor.mo.gov or send your question(s) via fax to 573-751-2195.

For general questions about the ABLE program, please contact the Missouri State Treasurer’s Office at able@treasurer.mo.gov or send your question(s) via fax to 573-751-0343.

If the Department is unable to verify the ABLE subtraction on the Missouri income tax return, a notice will be issued requesting documentation to verify the subtraction. Taxpayers simply need to provide one of the following pieces of information to the Department for their review. (The documentation should be sent to the address, email or fax number provided on the notice.)

  • Bank statements reporting/verifying the contribution date and contribution amount,
  • Copies of cancelled checks,
  • Form 5498-QA, or
  • Other supporting documentation verifying the name of the individual who contributed to the ABLE account, contribution dates, and contribution amounts.

Once the Department reviews the documentation and validates the subtraction, a new notice will be issued to the taxpayer indicating the ABLE subtraction was adjusted.

Any contributions that are distributed by the ABLE account and not used for qualified disability expenses or not held for the minimum length of time established by the board—one (1) business day— must be added back as income on the Missouri income tax return. The amount of the distribution that must be added includes contributions previously exempt from state tax and earnings generated from the program (if the earnings are not already included in federal adjusted gross income). If the taxpayer who made the contribution is deceased, the beneficiary must add the nonqualified distribution to federal adjusted gross income on the Missouri income tax return. (See below for more information on how to claim the addition.)

Taxpayers reporting the ABLE addition need to complete a Missouri income tax return using Form MO-1040 and report the addition on the supporting form (Form MO-A, Part 1). For tax year 2017, the addition is claimed on line 6 of Form MO-A. The addition amount from Form MO-A is then carried over to line 2 of the Missouri income tax return as an addition to federal adjusted gross income (in determining Missouri adjusted gross income).

If you still have questions, please check out other Personal Tax FAQs.