ABLE accounts are tax-advantaged savings accounts designed for individuals with disabilities, allowing them to save money for qualified disability expenses without losing eligibility for certain public benefits. These accounts can help cover costs related to education, housing, transportation, and more, while allowing contributions and investment growth to be tax-free.
Overview of ABLE Accounts
ABLE accounts, established under the Achieving a Better Life Experience (ABLE) Act of 2014, are tax-advantaged savings accounts designed for individuals with disabilities. These accounts allow eligible individuals to save money for qualified disability expenses without losing eligibility for federal benefits like Medicaid and Supplemental Security Income (SSI).
Eligibility Criteria
To open an ABLE account, individuals must meet the following criteria:
- Disability Onset: The disability must have begun before age 46.
- Benefit Eligibility: Must be receiving SSI or Social Security Disability Insurance (SSDI) or have a certification from a physician confirming significant functional limitations.
Contribution Limits
- Annual Contribution: The total contributions to an ABLE account cannot exceed $20,000 per year (as of 2026).
- Additional Contributions: If the beneficiary is employed, they may contribute additional amounts based on their earnings.
Qualified Disability Expenses
Funds in an ABLE account can be used for various qualified expenses, including:
- Education
- Housing
- Transportation
- Employment training and support
- Health and wellness
- Assistive technology
Key Benefits
- Tax-Free Growth: Earnings on the account grow tax-free.
- Resource Exemption: Up to $100,000 in an ABLE account does not count against the SSI resource limit.
- Single Account Rule: An individual can only have one ABLE account at a time.
These accounts provide a valuable financial tool for individuals with disabilities, helping them manage expenses while maintaining essential benefits.
