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About ABLE

All You Need to Know About ABLE Accounts

What is ABLE?

ABLE Accounts, which are tax-advantaged savings accounts for individuals with disabilities and their families, were created as a result of the passage of the Stephen Beck Jr. Achieving a Better Life Experience Act of 2014 or better known as the ABLE Act.


ABLE accounts help those with disabilities save money while remaining eligible for disability benefits.

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The beneficiary of the account is the account owner, and income earned by the accounts will not be taxed.

Contributions to the account, which can be made by any person (the account beneficiary, family, friends Special Needs Trust or Pooled Trust), must be made using post-taxed dollars and will not be tax deductible for purposes of federal taxes; however, some states may allow for state income tax deductions for contributions made to an ABLE account.

Who is eligible for an ABLE account?

The ABLE Act limits eligibility to individuals with disabilities with an age of onset of disability before turning 26 years of age. If you meet this age requirement and are also receiving benefits under SSI and/or SSDI, you are automatically eligible to establish an ABLE account.

If you are not a recipient of SSI and/or SSDI but still meet the age of onset disability requirement, you could still be eligible to open an ABLE account if you meet Social Security’s definition and criteria regarding functional limitations and receive a letter of disability certification from a licensed physician

You do not have to be younger than 26 to be eligible for an ABLE account. You can be over the age of 26, but must have had an age of onset before your 26th birthday.

Are there limits to how much money can be put in an ABLE account?

The total annual contributions by all participating individuals, including family and friends, for a single tax year is $16,000. The amount may be adjusted periodically to account for inflation. Under current tax law, $16,000 is the maximum amount that individuals can make as a gift to someone else and not report the gift to the IRS (gift tax exclusion). The total limit over time that could be made to an ABLE account will be subject to the individual state and their limit for education-related 529 savings accounts. States have set limits for total allowable ABLE savings. State ABLE limits range from $235,000 to $550,000.


In consideration of the annual contribution limit per calendar year, accounts may reach the state limit over time. However, for individuals with disabilities who are recipients of SSI, the ABLE Act sets some further limitations. The first $100,000 in ABLE accounts would be exempted from the SSI $2,000 individual resource limit. If and when the ABLE account balance, when combined with other resources, exceeds $100,000 by the SSI resource limit, the beneficiary’s SSI cash benefit would be suspended.


In time if or when resources are no longer exceeded by the amount over $100,000, benefits are reinstated without time limit. This special rule does not apply if non-ABLE resources alone are over the limit. It is important to note that while the beneficiary’s eligibility for the SSI cash benefit is suspended, this has no effect on their ability to receive or be eligible to receive medical assistance through Medicaid.

Which expenses are allowed by ABLE accounts?

A “qualified disability expense” means any expense related to the designated beneficiary as a result of living a life with disabilities. These may include education, food, housing, transportation, employment training and support, assistive technology, personal support services, health care expenses, financial management and administrative services and other expenses which help improve health, independence, and/or quality of life.

Can ABLE contributions be invested?

Like state 529 college savings plans, states do offer qualified individuals and families multiple options to establish ABLE accounts with varied savings and/or investment strategies. Each individual has the opportunity to assess possible future needs and costs over time, and to assess their risk tolerance for possible future investment strategies to grow their savings. ABLE account owners are limited, by the ABLE Act, to change the way their money is invested in the account up to two times per year.

How is ABLE different than a Special Needs Trust?

An ABLE Account will provide more choice and control for the beneficiary and family. Cost of establishing an account will likely be considerably less than either a Special Needs Trust (SNT) or Pooled Income Trust. With an ABLE account, account owners will have the ability to control their funds and, if circumstances change, still have other options available to them. Determining which option is the most appropriate will depend upon individual circumstances. For many families, the ABLE account will be a significant and viable option in addition to, rather than instead of, a Trust program.

Want more info?

Visit the ABLE National Resource Center to learn more about which states offer ABLE plans here.


If you want to learn about the history of the ABLE Act, visit this page from the ABLE NRC which has additional information.

As always, feel free to email us if you have any questions and we'll help to point you in the right direction.

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