What are ABLE Accounts?
ABLE accounts, also known as the 2014 law titled Achieving a Better Life Experience Act, allow states to provide tax-advantaged savings accounts to individuals with significant disabilities before the age of 26 years old (this age will increase to 46 in January 2026). Family members, friends, and the individual themself can contribute to the account.
Distributions are tax-free when used for qualified disability expenses. Qualified disability expenses can include, but are not limited to, personal support services, basic living expenses, health costs, legal fees, and others.
These accounts are provided by states (rather than by the federal government).
Why ABLE Accounts Matter
ABLE accounts help indivdiuals with disabilities save money and fund much-needed life expenses. Equally important, someone with an ABLE account can contribute to the account without compromising eligibility for Supplemental Security Income or Medicaid.
ABLE Account Limit Increase
As of this year, the annual contribution limit has been increased. Contributions from friends, family, employers, or anyone, can now be made to ABLE accounts up to $17,000 per year (an increase from $16,000). Additionally, individuals with an ABLE account can contribute up to $13,590 from work earnings.
How To Apply for ABLE Accounts
The steps for applying for an ABLE account will vary from state to state. Some states allow out-of-state participants, meaning you don’t necessarily need to live in the state in which you are applying.
Check out this state map for specific instructions and contact details for how to begin.
For more information on ABLE accounts, the ABLE National Resource Center is a wonderful tool. Additionally, The Arc of the United States has created this video.
Enabling Technology with SimplyHome
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