ABLE Account Decision Guide Series

Determining Whether Something is a Qualified Disability Expense (QDE)

April 2021

Section 529A(e)(5) of the ABLE Act, 26 US Code 529A(e)(5), provides a list of expenses that would be considered QDEs, including, but not limited to:
  • Education
  • Employment training and support
  • Food (as clarified by SSA) https://secure.ssa.gov/apps10/poms.nsf/lnx/0501130740
  • Housing
  • Transportation
  • Assistive technology and personal support services
  • Health, prevention and wellness
  • Financial management and administrative services
  • Expenses for ABLE account oversight and monitoring
  • Legal fees
  • Funeral and burial
  • And other expenses approved through the U.S. Treasury Department/IRS regulations (proposed regulations from 2015 add “basic living expenses” to this list).

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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.

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.
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.
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.
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.

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