Answers to common ABLE questions, Information to help you get ABLE ready

Frequently Asked Questions

ABLE History and Background General Eligibility Medical Criteria, Certifications and Improvement

Enrollment Contributions Qualified Disability Expenses Other Considerations


ABLE History and Background

For more information on this topic, please visit our History of the ABLE Act and About ABLE Accounts website pages.

The ABLE Act was passed on December 19, 2014 and amends Section 529 of the Internal Revenue Service Code of 1986 to create tax-advantaged savings accounts for individuals with disabilities, meaning ABLE investment earnings grow tax-free when used for qualified disability expenses (QDEs). By making tax-advantaged savings accounts available to cover qualified disability expenses, this law aims to ease financial strains faced by individuals with disabilities. The funds contributed into these accounts will not negatively impact the person’s eligibility for most means-tested, federally-funded benefits such as Medicaid. The funds in these accounts supplement, but do not replace, benefits provided through private insurance, Medicaid, Supplemental Security Income (SSI), the beneficiary’s employment and other sources.
Millions of individuals with disabilities and their families depend on a wide variety of public benefits for income, health care, food and housing assistance. Many of these benefits require meeting a means or resource test that limits the eligibility of individuals with more than $2,000 in liquid resources such as cash savings, non-ABLE checking and savings accounts, and some retirement funds.

For the first time in public policy, the ABLE Act recognizes the extra and significant costs of living with a disability. ABLE accounts allow eligible individuals the opportunity to save and fund a variety of qualified disability expenses without endangering eligibility for certain benefits that are critical to their health and well-being, such as Medicaid and Supplemental Security Income.

For more information, visit Tools: ABLE Basics/General.

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 you might live, and whether or not your state has decided to establish an ABLE program, you are free to enroll in any state’s program provided that the program is accepting out-of-state residents.

For a map of states to help you determine which state ABLE programs accept out-of-state residents, refer to the individual state pages on our Select A State Tool.

There have been quite a few changes affecting ABLE accounts in the last five years. Here are a few:
  • The annual contribution limit was raised to its current limit of $15,000 per calendar year (to adjust for inflation). The contribution limit has remained at $15,000 for 2021.
  • Employed individuals can contribute the lesser of earnings into their ABLE account or $12,760 ($15,950 for Alaska and $14,680 for Hawaii residents) each year so long as they do not have a retirement plan available to which they or their employer contributed in the same calendar year. This is in addition to the annual contribution limit of $15,000. 
  • Owners of both an ABLE account and a 529 college savings account (or if a family member is the 529 College Savings account beneficiary as defined by the law), may transfer funds from the 529 College Savings account to an ABLE account without incurring tax or penalty. However, the funds transferred from the 529 college savings account count toward your annual contribution limit of $15,000 for the tax year.
  • Contributions to an ABLE account are included in the IRS Retirement Savings Contributions Tax Credit (i.e., Saver’s Credit). For low- to moderate-income wage earners, contributions to an ABLE account may qualify the individual for a tax credit of up to $2,000. There are additional requirements that must be met to be eligible for this non-refundable credit. Visit the IRS website to find a free tax preparer.

    For more information, visit Changes to ABLE Summary

    General

    For more information on this topic, please visit our ABLE Basics/General Tools.

    No. The ABLE NRC does not administer ABLE accounts nor do we have information regarding a specific individual’s ABLE account. Please contact a state plan directly for information about opening and managing an ABLE account.

    To view states that currently have an ABLE program, please view the state map on the ABLE NRC website. Some states have a rule that you must live in their state to open an ABLE account, but most do not. To help you choose the ABLE program that's right for you, you may find these tools helpful:

  • State Comparison Tool
  • Search by Program Feature
  • Select A State Map
  • No, you are limited to one 529 ABLE account. Other types of 529 accounts, such as a 529 College Savings Plan, are different in that you may hold more than one.

    For more information, visit 10 Things You Should Know.

    The Social Security Administration (SSA) counts shelter costs that someone else provides or pays as “unearned income” which reduces the SSI payment as much as one-third. An ABLE account owner, however, is in a unique position where contributions made by others into their ABLE account can help pay for housing and related expenses without an impact upon SSI or other means-tested benefits.

    Housing expenses are considered a qualified disability expense distribution from an ABLE account. The following housing and related expenses are identified in the SSA POMS and include: Mortgage payments, including property taxes required by the mortgage holder, real property taxes, rent, heating fuel, gas, electric, water, sewer and garbage removal.

    As a best practice, when third parties such as a special needs trust (SNT), parent or relative make contributions to the ABLE account, the money must not be given directly to the ABLE account owner. It is suggested that automatic bill payments be set up on predetermined dates to pay for these recurring expenses. It is not appropriate for a parent to pay housing expenses directly and then reimburse themselves from the ABLE account. When withdrawals are made for housing and related expenses, the withdrawal and payment must be made in the same month or it is counted as a resource along with other resources.

    For more information, visit Qualified Disability Expense Fundamentals and Social Security’s Updated ABLE Guidance: A Deeper Dive.

    No. The FAFSA application instructions specify that 529 ABLE accounts are excluded as investments or savings.

    For more information, visit the FAFSA website.

    When the account owner passes away, the funds in the ABLE account can be used for any outstanding qualified disability expenses, including funeral and burial expenses. The ABLE plan can advise you on what is needed such as a death certificate or whether there is a special form to complete. It is up to the individual state, whether or not to file a claim for Medicaid recovery of funds which were paid on behalf of the account owner since the account was opened. If someone has never received Medicaid, this is not an issue. If the state pursues a claim, In addition to allowing for the repayment of outstanding QDEs, including funeral and burial expenses, Medicaid buy-in premiums paid since opening the ABLE account will be reimbursed. Thereafter, the remainder of funds are payable to the Estate.

    Eligibility

    For more information on this topic, please visit Step 2 on the Roadmap to Enrollment: Eligibility.

    Individuals of any age are eligible to open an ABLE account if they have a disability with onset prior to their 26th birthday and meet the severity of disability requirement in one of two ways: 1) receiving SSI or SSDI (Social Security Disability Insurance) or 2) possessing a disability certification signed by a licensed physician stating that the individual's disability meets the "marked and severe" functional limitations standard stated in the ABLE statute and that the individual's disability occurred prior to their 26th birthday. Please see Sample Disability Certification. The ABLE account may be established by a person selected by the eligible individual; or If an eligible individual (whether a minor or adult) is unable to establish his or her own ABLE account, an ABLE account may be established on behalf of the eligible individual by: the eligible individual’s agent under a power of attorney or, if none, by a conservator or legal guardian; spouse, parent, sibling, grandparent of the eligible individual; or a representative payee appointed for the eligible individual by the Social Security Administration (SSA), in that order. An account opened by a representative payee appointed by SSA must meet all of the SSA account rules and requirements. For more information, view the Webinar: Opening an ABLE Account: Key Decisions for Success.
    Yes, an ABLE account can be opened for a person with a disability regardless of their age. Even though you may be over the age of 26, if disability began before age 26 and you meet the other criteria, you are eligible. If you are not currently receiving a disability-based benefit from the Social Security Administration (SSA), it is recommended that you ask your physician to indicate specifically whether or not you meet or equal the disability criteria outlined in the Listing of Impairments. The eligibility criteria for setting up an ABLE account is two-pronged. It requires:
  • Disability to be established before age 26, and
  • Either receiving Social Security benefits from SSI and/or SSDI or
  • If not receiving SSI or SSDI benefits, meet SSA’s definition of disability and criteria regarding significant functional limitations and have a disability certification from a licensed physician.
  • The definition of disability for Section 529A was clarified under final regulations and is applied without regard to whether or not the individual is working or engaged in substantial gainful activity.
    Not exactly. If the Social Security Administration (SSA) determines that your disability began before age 26 and awards you a disability-based benefit, you can immediately open an ABLE account. When SSA determines the date disability began, they are required to consider both medical and non-medical factors which could result in a disability onset date which is later than the date in which disability actually began. Various technical factors, such as substantial gainful activity (work), insured status, savings or even a parent’s earnings can result in SSA establishing this date much later than when the onset of the disability occurred. If disability began before age 26, but SSA has established a date after age 26, your physician will need to give you a disability certification stating that your disability began before age 26 and that you meet the SSA definition and criteria regarding significant functional limitations. SSA staff are not responsible for determining when the disability began for an ABLE account. According to SSA, SSA staff have been advised to direct ABLE eligibility inquiries to the state. Please see Sample Disability Certification.

    Medical Criteria, Certifications and Improvement

    If an individual is not receiving a disability-based benefit from SSA, they must possess a disability certification, which includes the individual’s diagnosis, which is signed by a 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. Please see Sample Disability Certification. The disability must:
  • meet the "marked and severe" functional limitation standard stated in the ABLE statute
  • have occurred prior to age 26, and
  • have lasted or can be expected to last for at least 12 months or result in death.
  • The IRS and the Treasury Department use the Social Security Administration Listing of Impairments which describes each of the major body systems that cause marked and severe functional limitations. Most of the listed impairments are permanent or expected to result in death, although some refer to specific periods of time for which an impairment will meet a listing. In addition, SSA maintains a list of “compassionate allowance conditions” which are so severe that they are deemed to meet the requirements without a physician’s diagnosis provided the condition was present before age 26. Each qualified ABLE program determines what is needed to establish eligibility to open an ABLE account. For example, an ABLE program could require an individual to provide a copy of a benefit verification letter from SSA and allow the individual to certify, under penalty of perjury, that blindness or disability occurred before age 26. For more information, visit Understanding Eligibility, Webinar: ABLE Myths vs. Facts and Webinar: Advantages of ABLE for Those Not Receiving Public Benefits.
    A condition that results in marked and severe functional limitations will qualify an individual to open an ABLE account so long as the disability began before the age of 26. The condition may be physical, developmental, mental or another condition. There are examples in the Social Security Administration's Blue Book (Parts A and B), as well as the SSA's List of Compassionate Allowances Conditions.

    For more information, visit Case Summary Series: The Impact of an ABLE Account on Social Security and SSI Disability Benefits.

    If a beneficiary no longer meets eligibility requirements, and they no longer qualify for an ABLE account, their account will remain open and they can continue to use the account until the end of the calendar year. After the end of the year, they stop being eligible, no new contributions are permitted and account withdrawals will be treated as non-qualified withdrawals. Distributions from an ABLE account during a period when an individual is no longer an eligible individual are possibly subject to taxation. The earnings portion of the distribution may be taxable. Non-qualified withdrawals may affect eligibility for SSI and other federal benefits.

    For more Information, visit November 2019 AchievABLE Newsletter: Top Three Questions.

    Enrollment

    For more information on this topic, please visit Step 4 on the Roadmap to Enrollment: How Do I Open an Account?

    For information on how to enroll in an ABLE program, please refer to the ABLE NRC Roadmap to Enrollment which includes short videos, as well as a five-step guide. The five-step guide will help you: 1) learn more about ABLE, 2) determine who is eligible, 3) learn what you can use the funds for, 4) learn how to open an ABLE account and, finally, 5) learn how to manage an ABLE account.

    To view states that currently have an ABLE program, please view the ABLE NRC state map. Some states have a rule that you must live in their state to open an ABLE account, but most do not. To help you choose the ABLE program that's right for you, you may find these tools helpful:

  • State Comparison Tool
  • Search by Program Feature
  • Select A State Map
  • For more information, visit Get Started or How Do I Open an Account.

    Regardless of where you live, and whether or not your state has decided to establish an ABLE program, you are free to enroll in any state ABLE program provided that the program is accepting out-of-state residents and you meet the requirements for opening an account. You may find the comparison tools on the ABLE NRC website helpful to make your decision easier. The Roadmap to Enrollment is also helpful and contains step-by-step information from eligibility to enrollment to help you understand ABLE accounts better.

    In addition to looking into your state program, we encourage you to explore other state ABLE programs. There are a variety of reasons for taking this extra step. Some ABLE programs provide residents with a state income tax deduction on contributions made to ABLE accounts opened in that state (although all contributions are made with after-tax dollars). Other states may offer debit card or checking account options that can make it easier to use ABLE account assets for qualified disability expenses. For helpful information and resources, visit the ABLE National Resource Center website.

    For more information, visit the Roadmap to Enrollment.

    No, at the present time, enrollment in an ABLE account is done solely online through the state ABLE program of your choice. However, some states allow for a paper application, as requested.

    Contributions

    For more information on this topic, please visit Step 2 on the Roadmap to Independence: Building a Circle of Support and Strategies for Funding an ABLE Account Webinar.

    The ABLE Act allows any “person” to contribute to an ABLE account. The Internal Revenue Service does not refer to a “person” in the usual sense of a living human being. Rather, a person includes an “individual, corporation, partnership, trust or estate, joint stock company, association, syndicate…guardian…” A special needs trust is also a “person” (IRC 7701(a)(1), Reg. 301.7701-1(a)) and a pooled trust is a “person” who may contribute to an ABLE account. The ABLE Act allows contributions by the first party (i.e., account owner) as well as a third party (family, friends, co-workers, etc.). Learn More: “Strategies for Funding an ABLE Account”

    The total annual contributions by all individuals – family, friends, an employer or a 529 rollover – for the 2020 tax year is $15,000. The total amount that the ABLE account can grow to is subject to the individual state and its limit for education-related 529 savings accounts. You can find up-to-date information on the total amount for a state ABLE program by using the ABLE NRC state comparison tools:

    Compare State Programs

    Search by ABLE Program Features

    ABLE Program Map Tool

    For individuals with disabilities who are recipients of Supplemental Security Income, the ABLE Act sets some further limitations. The first $100,000 in an ABLE account is exempt from the SSI $2,000 individual resource limit. If and when an ABLE account exceeds $100,000, when combined with countable resources that then exceed a beneficiary’s resource limit, the SSI cash benefit would be suspended until such time as the account falls back below the resource limit. It is important to note that, while the beneficiary’s eligibility for the SSI cash benefit is suspended, it has no effect on their ability to receive, or eligibility to receive, medical assistance through Medicaid.

    Webinar: Strategies for Funding an ABLE Account

    No. ABLE is not a tool to shield earnings, but it is a tool to increase assets/resources. ABLE is a protected savings opportunity for maintaining eligibility for means-tested public benefits such as SSI and SNAP. Earnings affect benefits the same as they always have, whether or not they are deposited into an ABLE account.

    Learn More: ABLE Best Practices for Working-age Adults

    Qualified Disability Expenses

    For more information on this topic, please visit our archived webinars on Qualified Disability Expenses.

    ABLE account funds may be used for qualified disability expenses, or QDEs, which may include any expense related to the beneficiary as a result of living a life with a disability. Examples of these expenses may include education or other expenses which help improve health, independence and/or quality of life.

    Examples of qualified disability expenses include, but are not limited to:

  • Education
  • Housing
  • Transportation
  • Employment training and support
  • Assistive Technology and related services
  • Health
  • Prevention and wellness
  • Financial management and administrative services
  • Legal fees
  • Expenses for oversight and monitoring
  • Funeral and burial expenses
  • Basic living expenses like food
  • Other expenses approved by the Secretary of the U.S. Treasury
  • For more information, visit Webinar: Qualified Disability Expense Fundamentals.

    As of a March, 2020 policy clarification, the Social Security Administration recognizes food as a basic living expense which is an ABLE qualified disability expense: https://secure.ssa.gov/apps10/poms.nsf/lnx/0501130740.
    Vehicle purchase, titling, registration, repairs and insurance are qualified disability expenses for the ABLE account owner who uses the vehicle for transportation or who is transported in the vehicle.

    Transportation expenses for UBER, LYFT, a taxi, bus or train services are also qualified disability expenses. They would not replace, but could supplement, benefits provided by other programs.

    For more information, visit Webinar: Qualified Disability Expense Fundamentals.

    Yes. Housing expenses and housing-related expenses include mortgage, rent, real property taxes, heat, fuel, gas, electric, water, sewer and garbage services. Payment of these expenses from an ABLE account will not affect means-tested benefits and will not result in the reduction of a Supplemental Security Income payment due to in-kind support and maintenance.

    Other Considerations

    Yes, you can use your ABLE account in conjunction with other types of trusts and accounts. Determining which option is the most appropriate will depend upon individual circumstances. For many individuals and families, it may make sense to have both an ABLE account and a special needs trust. The ABLE National Resource Center partnered with the Special Needs Alliance to prepare a comparison chart of ABLE Accounts and Special Needs and Pooled Trusts so that individuals can choose which option best meets their needs.
    Yes, families who have a 529 college savings plan can transfer funds to an ABLE account without incurring any tax or penalty. The rollover can be in amounts up to the annual ABLE contribution limit. Current law requires rollovers to be completed by December 31, 2025. Both accounts must have the same beneficiary or be a qualifying member of the beneficiary’s family.  There are direct rollovers where the two programs transfer assets directly from one to the other. And, there are indirect rollovers in which the account owner of the 529 plan would take possession of funds before they are transferred. The transfer must occur within 60 days of withdrawal.