What is ABLE?
A brief explanation for Service Providers…
What is an ABLE account?
ABLE accounts are tax-advantaged savings and investment accounts for individuals with disabilities. They were created as a result of the passage of the Stephen Beck Jr., Achieving a Better Life Experience Act of 2014, better known as the ABLE Act. The ABLE Act, considered by many to be one of the most significant pieces of legislation for the disability community since the Americans with Disabilities Act, had overwhelming bipartisan support in both the Senate and the House.
This law was the result of nearly a decade-long cross-disability grassroots effort. This effort originated with a group of parents of children with disabilities who recognized the unfairness of not being able to save funds in their child’s name for fear of losing essential benefits, benefits that allow their child to live independently in the community.
The individual with the disability is the ABLE account owner. The account owner, family, friends, an employer or the account owner’s Special Needs Trust (SNT) may contribute funds into the account. ABLE account owners – both those who receive and those who do not receive public benefits – may save for qualified disability expenses related to transportation, health care, housing, education, retirement and more.
Why the need for an ABLE account?
Millions of individuals with disabilities and their families depend on a variety of public benefits for income, health care and food and housing assistance. Eligibility for these public benefits requires meeting a means test that limits eligibility and requires individuals to report more than $2,000 in cash savings, retirement funds and other items of significant value. ABLE accounts allow eligible individuals to save and invest money, largely without affecting eligibility for public benefits; Medicaid eligibility is not affected by ABLE savings in any amount up to the individual state 529 savings limit.
What are the eligibility requirements?
The ABLE Act limits eligibility to individuals with disabilities with an age of onset of disability before turning 26 years of age. If an individual meets this age requirement and is also receiving benefits under SSI and/or SSDI, they are automatically eligible to establish an ABLE account. If an individual is not a recipient of SSI and/or SSDI but still meet the age of onset disability requirement, they could still be eligible to open an ABLE account if they meet Social Security’s definition and criteria regarding functional limitations and receive a letter of certification from licensed doctor of medicine or osteopathy, a doctor of dental surgery or dental medicine, and, for some purposes, a doctor of podiatric medicine, a doctor of optometry, or a chiropractor. A person does not have to be younger than 26 to be eligible for an ABLE account. They can be over the age of 26 but must have had an age of onset before their 26th birthday. Please see Sample Disability Certification.
*Please note, on 1/2026, the ABLE age of eligibility is expanded to include people who have a disabiltiy that began before age 46.
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 available here. The amount may be adjusted periodically to account for inflation. Under current tax law, $18,000 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 balance limit for education-related 529 savings accounts. Many states have set this balance limit at more than $550,000 per plan. 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 an ABLE account, along with non-ABLE resources, exceeds $100,000, by the resource limit, the beneficiary’s SSI cash benefit would be suspended until such time that resources are not exceeded. 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.
Additionally, upon the death of the beneficiary, the state in which the beneficiary lived may file a claim to all or a portion of the funds in the account equal to the amount in which the state spent on the beneficiary through their state Medicaid program. This is commonly known as the “Medicaid Payback” provision and the claim could recoup Medicaid-related expenses from the time the account was open.
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, housing, food, 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 an individual have more than one ABLE account?
No. The ABLE Act limits the opportunity to one ABLE account per eligible individual.
Does an individual have to wait for their state to establish a program before opening an account?
No. While the original law passed in 2014 did stipulate that an individual had to open an account in their state of residency, this provision was eliminated by Congress in 2015. This means that regardless of where an individual might live and whether or not their state has decided to establish an ABLE program, they are free to enroll in any state’s program provided that the program is accepting out-of-state residents.
To determine which state ABLE programs are accepting out-of-state programs, please refer to the individual state pages. Examples of state ABLE programs accepting enrollment nationwide include Ohio, Nebraska, and New York. An example of a state ABLE program only accepting in-state residents includes the Florida ABLE United program.
Will states offer options to invest the savings contributed to an ABLE account?
Like state 529 college savings plans, states do offer qualified individuals and families multiple options to establish ABLE accounts with varied investment strategies. Each individual and family will need to project possible future needs and costs over time, and to assess their risk tolerance for possible future investment strategies to grow their savings. Account contributors or designated beneficiaries 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 an ABLE account different than a Special Needs or Pooled 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. For more information, the webinar on ABLE Accounts and Special Needs Trusts is archived on our website along with its slides and transcript.
For a more detailed understanding of how an individual can begin to compare programs and for things to think about when preparing to open an ABLE account, visit Becoming ABLE Ready.