ABLE Account Decision Guide Series

Determining Whether Something is a Qualified Disability Expense (QDE)

Sept 2026

QDE Decision Guide 2026

Q1: Does the expense directly benefit the ABLE account owner?

Yes: Continue to question #2 below.

No: The expense is not a QDE. An example of an expense that is not a QDE is using ABLE funds to buy a gift for someone else.

Q2: Does the expense fit into one of the broad categories of expenses below?

Education
Employment training and support (includes self-employment)
Food
Housing
Transportation
Assistive technology and personal support/caregiving services
Health, prevention, and wellness
Financial management and administrative services
Expenses for ABLE account oversight and monitoring
Legal fees
Funeral and burial

Yes: The expense is a QDE.

No: Continue to question #3 below.

Q3: Does the expense help the account owner to be independent, healthy or have a good quality of life?

Yes: The expense is a QDE. Keep record of expenses and receipts for up to 7 years.

No: The expense is not a QDE.

Q4: Is the expense related to an illegal activity or item?

Yes: The expense is not a QDE.

No: The expense is a QDE.

General QDE Guidance For Able Account Users

This Guidance should be useful to the ABLE account owner and to their circle of support who is assisting, advising or making decisions with the ABLE account owner.

If expense fits a QDE category, it need not be disability related.

For example, payments for general education/training (college or vocational school tuition as a QDE) and housing expenses (such as rent or mortgage, utilities, trash removal, real property taxes) are QDE categories that do not need a connection to the disability. The repayment of an overpayment of Supplemental Security Income or Social Security Disability Insurance benefits would be a QDE; these overpayments fall under the category of “financial management” in IRS rules

When in doubt, best to use ABLE savings for QDEs and use non-ABLE money for questionable expenses.

For example, while good arguments can be made for things like the cost of transportation to a casino (but not the cost of gambling) for a relaxing evening with friends, this may raise questions by the IRS. It would be better to use non-ABLE funds for transportation to a casino. ABLE funds may be used for rent (housing QDE) or a telephone or cell phone (basic living expense QDE), for example, freeing up other money for the non-ABLE QDE expense.

Look to public benefits first for key expenses, saving ABLE funds for expenses less likely to be paid by benefit programs.

For example: Medicaid may be able to pay for transportation costs to a health care provider (health, prevention, and wellness QDE); a special education program or state vocational rehabilitation agency may be able to pay for specially adapted computer equipment or a basic laptop or tablet for the person with a disability (assistive technology or education-related QDE); or a Medicaid waiver program may be able to cover the costs of adaptations to a bathroom to make it accessible to a wheelchair user (housing or assistive technology QDE.) When the public benefit program can pay for an expense, it frees up precious ABLE account funds to be used for items that public benefits programs cannot fund or are less likely to fund.

Be prepared to explain why ABLE account distributions are not income in key public benefit programs.

This is because ABLE accounts are still very new and benefit program staff may not be aware of their own agency’s ABLE account guidance. See Decision Guide, Understanding the Impact of an ABLE Account on Various Public Benefits, regarding federal policies for SSI and Medicaid, for example, providing that ABLE account distributions for QDEs are not counted as income.} See ABLE Federal statements from IRS, SSA, CMS / Medicaid & Medicare, HUD / Section 8, USDA / SNAP: https://www.ablenrc.org/what-is-able/federal-guidance/.

Chose one of the following common QDE Categories to continue:

Note: Our ABLE Decision Guide Series is designed as an aid to decision making as it relates to establishing and using an ABLE account. This document does not cover every possible issue related to the topic and is not a substitute to more in-depth analysis that may be required in some cases.