ABLE Accounts
The Stephen Beck, Jr., Achieving a Better Life Experience (ABLE) Act of 2014 was passed to give individuals with disabilities the opportunity to save for disability-related expenses in a tax-advantaged account without losing eligibility for certain public benefits programs, like Medicaid and Supplemental Security Income (SSI). The ABLE Act allows states to establish and maintain tax-advantaged ABLE plans where contributions and investment earnings can be used to pay for the designated beneficiary’s qualified disability expenses.
Anyone may contribute to an ABLE account, also known as a 529A account. Investment gains grow on a tax-deferred basis, and withdrawals used for qualified disability expenses are tax-free.
Certain ABLE account beneficiaries who work and earn income are allowed to contribute above the annual ABLE contribution limit, and designated beneficiaries are eligible for the Retirement Savings Contribution Credit (known as the Saver’s Credit). In addition, qualified tuition programs allow a limited amount of funds to be rolled over to an ABLE account from the designated beneficiary’s own 529 savings plan, or from that of a family member, without being subject to income tax.
Both 529 plans and ABLE accounts are considered "municipal fund securities" and are regulated under rules of the Municipal Securities Rulemaking Board (MSRB).
How ABLE Accounts Work
In general, individuals (designated beneficiaries) are eligible for an ABLE account if they’re already receiving benefits under SSI and/or Social Security Disability Insurance (SSDI). If not, they may still be eligible if they meet the Social Security Administration definition and criteria regarding significant functional limitations and have a letter of certification from a licensed physician. As of January 1, 2026, under all circumstances, the onset of the disability must have begun prior to age 46.
A designated beneficiary is limited to only one ABLE account at a time; however, the money in an ABLE account can be used for disability expenses over the lifetime of the beneficiary. Like 529 savings plans, ABLE account owners can make changes to their investments two times per year.
For taxable years beginning in 2026, the total amount of contributions in a single year may not exceed $20,000. Contributions aren’t tax-deductible at the federal level, although some states may provide an income tax deduction for contributions made to an ABLE account.
The first $100,000 saved in an ABLE account is exempt from the $2,000 SSI individual resource limit (beneficiaries will still receive Medicaid if the account exceeds $100,000). Check with the state that administers your ABLE account for additional details related to this exemption and whether it applies to your situation.
State Administration
States establish, administer and regulate their ABLE plans. Most have joined collaborative structures in which groups of states combine their individual ABLE plans under the same program design and fee structure.
Almost all ABLE plans are direct-sold, where individuals open ABLE accounts directly through the plan.
