ABLE Account Decision Guide Series

Determining Whether Something is a Qualified Disability Expense (QDE)

A Range of Everyday Expenses, Including Food, as Basic Living Expense QDEs

This QDE category appears in the 2015 proposed regulations, but not in the ABLE Act itself. The IRS has stated, “Until the issuance of final regulations, taxpayers and qualified ABLE programs may rely on these proposed regulations.” The IRS ABLE final regulations published November 19, 2020 list basic living expenses as a QDE and notes that they are not limited to items for which there is a medical necessity or which solely benefit the individual with a disability. https://www.govinfo.gov/content/pkg/FR-2020-11-19/pdf/2020-22144.pdf

An April 2020 amendment to the SSI POMS SI 01130.740 B.9. notes that the SSI program considers food a basic living expense QDE, meaning the SSI program will not count a distribution for food as in-kind unearned income. SSI’s rules for counting income are incorporated into Medicaid, Medicare Savings Programs and the Medicare Part D Extra Help program. See Decision Guide, Understanding the Impact of an ABLE Account on Various Public Benefits.

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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.