Section 1700-08-01-.06 - DISTRIBUTIONS(1) Request for Distribution. Any Distribution request shall be made through an online form, email, written communication or any similar means by the Designated Beneficiary or the Designated Beneficiary's Legal Representative. Funds shall not be distributed from an ABLE Account until the tenth (10th) calendar day following the State's receipt of the respective funds. The distributed funds will be sent to the Designated Beneficiary. The distributed funds may be sent to the Designated Beneficiary's Legal Representative or directly to a third party should it be permitted by the State.(2) Amount and Timing of Distributions. The Distribution amount will be equal to the amount requested, not to exceed the Redemption Value of the Beneficiary's ABLE Account at the time the Distribution is processed. The Distribution amount will be paid within a maximum of sixty (60) calendar days after the State's receipt of a written Distribution request.(3) Types of Distributions. (a) Distributions for Qualified Disability Expenses. The Designated Beneficiary or the Designated Beneficiary's Legal Representative may direct a Distribution and payment to the Designated Beneficiary, the Designated Beneficiary's Legal Representative or a third party as payment for a Qualified Disability Expense. The Designated Beneficiary or the Designated Beneficiary's Legal Representative shall provide the documentation requested by the State to substantiate that the Distribution will be used for the payment of Qualified Disability Expenses.(b) Distributions for Non-Qualified Disability Expenses. The Designated Beneficiary or the Designated Beneficiary's Legal Representative may direct a Distribution and payment to a the Designated Beneficiary or the Designated Beneficiary's Legal Representative provided that the funds have been on deposit in the ABLE Account for at least ten (10) calendar days and provided that there is at least one hundred dollars ($100.00) in the ABLE Account once the Distribution is made. The earnings portion of the Distribution made for non-Qualified Disability Expenses may be subject to federal taxation as prescribed under the Code.(c) Death of a Designated Beneficiary. In the event of a Designated Beneficiary's death, the State shall make any outstanding payments for Qualified Disability Expenses. Subject to the outstanding payments and to the extent permitted by the Code:1. The funds remaining in an ABLE Account not in excess of the amount equal to the total medical assistance paid for the Designated Beneficiary after the establishment of an ABLE Account, net of any premiums paid from the ABLE Account or paid by or on behalf of the Designated Beneficiary to a Medicaid Buy-In program under any state Medicaid plan established under title XIX of the Social Security Act, shall be distributed to such state upon filing a claim for payment by such state. In the event that the State does not receive a claim from a state Medicaid plan for reimbursement within thirty (30) days after the Designated Beneficiary's death, then the State shall distribute the remaining funds in an ABLE Account after the payment of outstanding Qualified Disability Expenses, and after the expiration of the thirty (30) day period. Should the Code establish a period of time different from the thirty (30) day period established in these rules, in which the State must wait for the filing of a state Medicaid claim, then the State will use the time period established by the Code; and2. The Designated Beneficiary's Legal Representative, estate administrator, estate executor or next of kin may request a Distribution of any remaining moneys in the Designated Beneficiary's ABLE Account remaining after outstanding payments for Qualified Disability Expenses and payments pursuant to subdivision (i) in this paragraph, or may request an Account and Contract termination. In the event that a Person does not request a Distribution of the remaining funds or request an Account or Contract termination, then the remaining funds shall be payable to the Tennessee Department of Treasury's Unclaimed Property Division pursuant to title 66, chapter 29, part 1.(d) Rollovers. Any Designated Beneficiary or Designated Beneficiary's Legal Representative may request a Rollover. Any Rollover made pursuant to this rule shall be administered in accordance with the applicable Rollover provisions contained in the Code. Any Rollover made pursuant to this rule shall not exceed the Redemption Value of the Designated Beneficiary's ABLE Account minus any applicable fees charged by the State. The Redemption Value of the ABLE Account shall be determined as of the date that the Rollover is made. The portion of the Rollover amount that constituted an investment into an ABLE Account from which the Distribution was made, shall be added to the investment portion in the recipient ABLE Account, and the earnings from the ABLE Account from which the Distribution was made shall be added the into the earnings of the recipient ABLE Account.(e) Program-to-Program Transfers. Any Designated Beneficiary or Designated Beneficiary's Legal Representative may request a Program-to-Program Transfer. The portion of the Program-to-Program Transfer amount that constituted an investment into an ABLE Account from which the Distribution was made, shall be added to the investment portion in the recipient ABLE Account, and the earnings from the ABLE Account from which the Distribution was made shall be added the into the earnings of the recipient ABLE Account.(4) Individualized Education Account Distributions from an ABLE Account. An Eligible Individual or Eligible Individual's Legal Representative may withdraw IEA funds from the Eligible Individual's ABLE Account while the Eligible Individual is under the age of thirty (30); however, the Eligible Individual or Eligible Individual's Legal Representative shall use the withdrawn funds only for the Eligible Individual's educational expenses that constitute Qualified Disability Expenses. Either the Eligible Individual or the Eligible Individual's Legal Representative shall indicate through a completed and signed certification, affidavit, attestation, verification or declaration that the withdrawn funds will only be used for the Eligible Individual's educational expenses that constitute Qualified Disability Expenses. The Eligible Individual or Eligible Individual's Legal Representative shall be responsible for maintaining and providing the documentation requested by the Tennessee Department of Education relative to the use of the IEA funds deposited in an ABLE Account, and shall be responsible for complying with the Tennessee Department of Education's rules relative to the use of IEA funds deposited in an ABLE Account, if applicable. Any IEA funds remaining in an Eligible Individual's ABLE Account after the Eligible Individual reaches the age of thirty (30), may be used by the Eligible Individual or the Eligible Individual's Legal Representative for any Qualified Disability Expenses.Tenn. Comp. R. & Regs. 1700-08-01-.06
Original rule filed October 8, 2015; effective January 6, 2016. Amendments filed December 4, 2018; effective 3/4/2019.Authority: T.C.A. §§ 71-4-804(b); 71-4-805; 71-4-806; 71-4-807; and Chapter 470 of the 2015 Public Acts.