Step 3: How Can Funds Be Used?

Woman smiling and riding on mobility scooter.

Understanding How ABLE Funds Can Be Used

Funds in an ABLE account can be used to purchase qualified disability-related expenses (QDE). A QDE is any expense related to the account owner’s blindness or disability that assists them in increasing and/or maintaining their health, independence and/or quality of life. These may include expenses related to education, housing, transportation, employment training and support, assistive technology, personal support services, health care expenses, financial management and administrative services and other expenses.

Topics at a Glance

What can funds in an ABLE account be used for?

Funds in an ABLE account are meant to be used to off-set the costs associated with living with a disability. Funds are meant to assist a person in the purchase of items and services that are covered as QDEs.

What are “qualified disability expenses”?

A qualified disability expense (QDE) is any expense related to the account owner’s blindness or disability that assists them in increasing and/or maintaining their health, independence and/or quality of life. These may include expenses related to education, housing, transportation, employment training and support, assistive technology, personal support services, health care expenses, financial management and administrative services and other disability-related expenses that the ABLE account owner might incur as a result of having a disability.

Who makes sure that ABLE funds are being used appropriately?

The Internal Revenue Service (IRS) makes sure that funds in an ABLE account are being used correctly. They may do this by audits.

Should I keep records of the qualified disability expenses paid for by my ABLE account?

We recommend that you save the receipts of your purchases in case you are ever questioned by the IRS. Some ABLE programs even have ways to track your spending online. We also recommend that you consider keeping a record of how each expense is related to your disability and how it helped you increase or maintain your health, independence, and/or quality of life. This may come in handy if you’re ever audited by the IRS.

What happens if I spend ABLE funds on a non-qualified expense?

It is important to keep in mind that misuse of the funds in an ABLE account may result in penalties and may affect the account owner’s eligibility for public benefits.

Additional Information

The webinar, #ABLEtoSave Series: Understanding Qualified Disability Expenses, details what funds in an ABLE account can cover, such as housing, transportation, job training, education and more. Actual, or soon-to-be, ABLE account holders discuss what they plan to use their ABLE accounts for, and ABLE program administrators discuss which types of expenses would be considered “qualified disability expenses” and how this is determined.

  1. ABLE funds must be used for the purposes of purchasing qualified disability expenses.
  2. The IRS is responsible for making sure ABLE funds are being used correctly.
  3. Misuse of ABLE funds will result in tax penalties and may affect the account owner’s eligibility for public benefits.

Ready to move to step 4? How Do I Open An Account? >>

Go back to the full Roadmap to Enrollment

Scroll Up