Tennessee Individualized Education Accounts (IEA)

A qualified disability expense is one that is related to the Account Owner’s blindness or disability and expenses intended to help maintain or improve health, greater independence, or quality of life. Education is a category within qualified disability expenses. To learn more about ABLE TN, see Qualified Expenses.

Eligible Tennesseans can own an ABLE TN account. The ABLE TN account is owned by the individual with the disability. To be eligible to open an ABLE TN account, he/she must meet the following criteria:

1. Be a Tennessee Resident
2. Have been diagnosed with a disability before he/she turned 46 years old. The disability onset increased to 46 beginning January 1, 2026.
3. Meet one of the following options:

• eligible to receive Supplemental Security Income (SSI); or
• eligible to receive Social Security Disability Insurance (SSDI); or
• A qualified physician has diagnosed the individual as having a disability that is expected to last no less than 12 months; or
• The individual (or their legal representative) certifies that the individual qualifies based upon an impairment found on the Social Security Administrations List of Compassionate Allowances.

All contributions are subject to a ten (10) calendar day hold before the monies are eligible for withdrawal. If you do not wish to close the ABLE TN account, do not request a full withdrawal of funds from the ABLE TN account because if you request a full withdrawal, the account will close automatically once it is withdrawn to $0.

You may request a check payable to the account owner or a third-party. If a bank account is associated with the ABLE TN account, payment via ACH may be requested directly into the bank checking or savings account.

IRS Publication 907 provides guidance relative to withdrawals from an ABLE account. You should retain your receipts or documentation for your records.

There will be a unique transaction source code, so you will know the amount of IEA monies you have contributed to your child’s ABLE TN account. Essentially, if $10,000 is contributed into your child’s ABLE TN account from the IEA program, you just know that you have $10,000 to withdraw for education expenses in the future. You have the flexibility to determine those expenses. Because disabilities differ in their nature and severity, and needs may differ among individuals with disabilities, you know best what your child needs, and you have the flexibility to decide those specific expenses that you believe are within education category. You should retain your receipts or documentation for your records. Education is a category within qualified disability expenses. All other deposits from other sources and their earnings and any earnings from the IEA deposits may be used for any qualified disability expense category.

No, ABLE TN does not require submission of documentation for any withdrawal made from your child’s ABLE TN account. You should retain all receipts and documentation for all withdrawals from your child’s ABLE TN account because as an ABLE program, we are required to aggregate all withdrawals made in a calendar year and report them to the IRS annually. The IRS could audit you to determine if the amount withdrawn was for qualified disability expense (remember, education is a category of disability related expenses).

ABLE TN reports annually to the Internal Revenue Service. Form 1099-QA is issued to report all aggregate distributions made from an ABLE TN account during the calendar year. Form 5498-QA is issued to report all aggregate contributions, fair market value of the account, opening of a new account, certification of a qualified account, and the disability code.

Also, ABLE TN sends monthly reports to the Social Security Administration for all ABLE TN Accounts including balance and withdrawal activity.

No action is required by you if you have IEA funds in the -02 portion of your child’s ABLE TN account. You can continue to make withdrawals from the -02 portion of the account. At this time, there is no specific date by which the -02 portion of the ABLE TN account needs to be withdrawn to $0.00.