What TSNY Is and Who Can Use It

TSNY (Trapeze Savings New York) is a tax-advantaged savings account designed for people with disabilities in New York State. It lets you set aside money for disability-related expenses — medical care, housing, education, employment support, and other costs — without losing means-tested benefits like Supplemental Security Income (SSI) or Medicaid.

The account works because it is structured as a may have access to ABLE account under federal law. This means the money you save in TSNY does not count against the asset limits that normally disqualify you from SSI or Medicaid. Without TSNY or a similar account, saving more than $2,000 (for an individual) would cause you to lose these benefits.

You can open a TSNY account if you are a New York resident with a disability that began before age 26, or if you are blind. You do not need to be on SSI or Medicaid to open one — the account is available to anyone who meets the disability requirement.

Key Takeaways

  • TSNY lets you save up to $17,000 per year (the 2023 annual gift tax exclusion amount) without losing SSI or Medicaid, as long as your account balance stays under $100,000.
  • Money in TSNY can be used for any disability-related expense: medical bills, housing costs, education, employment support, transportation, and assistive technology.
  • You open TSNY through Fidelity Investments, which administers the account and handles all deposits and withdrawals.
  • Earnings in the account grow tax-free, and you pay no federal income tax on the money you withdraw for disability expenses.
  • If your account balance reaches $100,000, your SSI payments pause (but Medicaid continues) until the balance drops below that threshold.

How Much You Can Save and What Happens to Your Benefits

You can deposit up to $17,000 per year into TSNY without triggering gift tax issues. That limit is set by federal law and may change year to year. Family members, friends, or your employer can also contribute to your account on your behalf.

As long as your account balance stays below $100,000, your SSI and Medicaid continue unchanged. The money in the account does not count as an asset for SSI purposes, which is the whole point — you can save without losing your benefits.

Once your account reaches $100,000, your SSI payments stop. Medicaid continues, however, so you keep your health coverage. If your balance drops back below $100,000, your SSI resumes the following month. This is called the $100,000 resource limit, and it applies to each individual account holder.

Money you withdraw from TSNY for disability-related expenses is not counted as income, so withdrawals do not reduce your SSI or Medicaid. This is different from regular savings, where withdrawals might be treated as income and affect your benefits.

What You Can Use TSNY Money For

TSNY funds can cover a broad range of disability-related costs. The law defines a "may have access to disability expense" as anything that helps you live, work, or go to school because of your disability.

Common uses include medical and dental care, prescription medications, mental health treatment, assistive devices (wheelchairs, hearing aids, communication devices), housing costs (rent, mortgage, utilities, home modifications), education and job training, employment support services, transportation, and childcare. You can also use TSNY money to pay for a service animal or to cover the cost of moving to a more accessible home.

The account is flexible — you decide what counts as a disability-related expense and withdraw money as you need it. Keep receipts and documentation in case you are ever asked to show that a withdrawal was for a may have access to expense, though TSNY does not require pre-approval before you spend the money.

How to Open and Fund a TSNY Account

You open TSNY directly through Fidelity Investments, which runs the program for New York. You can start the process online at the TSNY website or by calling Fidelity's ABLE account team. You will need to provide proof of your disability (medical records, a letter from your doctor, or documentation from SSA if you receive SSI or SSDI) and proof that you are a New York resident.

Once your account is open, you can fund it in several ways: by electronic transfer from your bank account, by check, by payroll deduction if your employer offers it, or by having someone else deposit money on your behalf. Fidelity also allows recurring monthly deposits, which makes it straightforward to save a set amount each month.

There is no minimum opening deposit, and there are no monthly fees to maintain the account. Fidelity may charge a small fee for certain transactions (like wire transfers), but basic account maintenance is free.

How Earnings and Taxes Work in TSNY

Any money your TSNY account earns — through interest, dividends, or investment gains if you choose to invest the balance — grows tax-free. You do not pay federal income tax on those earnings as long as you use the money for may have access to disability expenses.

When you withdraw money for a may have access to disability expense, that withdrawal is not taxed. If you withdraw money for something that is not disability-related, you will owe federal income tax on the earnings portion of that withdrawal, plus a 10 percent penalty.

TSNY does not affect your federal income tax filing. The account is separate from your regular tax return, and Fidelity handles the tax reporting for any non-may have access to withdrawals.

What Happens to TSNY If You Move or Your Circumstances Change

TSNY is specific to New York residents. If you move out of New York, you can keep your account open, but you cannot make new deposits. You can continue to withdraw money for disability expenses, and the account will still protect your SSI and Medicaid as long as your balance stays below $100,000.

If your disability status changes or you no longer meet the age requirement, you can still keep the account and use it. The account does not close if your circumstances change — it remains yours to use for disability-related expenses.

If you pass away, the money in your TSNY account goes to your estate or beneficiary. There may be tax consequences depending on how much is in the account and whether it was used only for may have access to expenses, so it is worth discussing this with a financial advisor or attorney if you have a large balance.

TSNY Compared to Other Savings Options for People with Disabilities

TSNY is one of several ways to save money without losing SSI or Medicaid. A Special Needs Trust (also called a Supplemental Needs Trust) is another option, but it requires a lawyer to set up and involves a trustee managing the money on your behalf. TSNY is simpler and cheaper — you control the account yourself.

A regular savings account does not work because any balance over $2,000 disqualifies you from SSI. A PASS plan (Plan to Achieve Self-Support) is another federal option that lets you set aside income for work-related goals, but it has stricter rules about what the money can be used for and requires approval from Social Security.

TSNY is the most straightforward option for most people: you open it yourself, you control it, and it covers a wide range of disability expenses. If you have a large amount of money to protect or complex family circumstances, a Special Needs Trust might make sense alongside or instead of TSNY.

Frequently Asked Questions

Can someone else manage my TSNY account for me?

You can authorize someone to help you manage the account (a family member or representative payee), but you remain the account owner. Fidelity allows you to set up a power of attorney or authorize a co-signer. If you need full management by someone else, a Special Needs Trust might be a better fit.

Does TSNY affect my Medicaid coverage?

No. TSNY does not count as an asset for Medicaid purposes, and your Medicaid continues even if your account balance reaches $100,000. Only SSI payments pause at that threshold.

What if I withdraw money and then realize it was not a may have access to expense?

You will owe federal income tax on the earnings portion of that withdrawal, plus a 10 percent penalty. You cannot put the money back and undo the withdrawal. Keep good records of what you spend TSNY money on to avoid this situation.

Can I invest the money in my TSNY account?

Yes. Fidelity offers investment options within TSNY, ranging from conservative savings to stock and bond funds. You choose how to invest your balance, or you can keep it in a savings option that earns a small amount of interest with no investment risk.

What if I do not use all the money in my account before I turn 65?

There is no age limit on TSNY. You can keep the account open and continue using it for disability expenses for the rest of your life. The account does not close or force a withdrawal at any age.