Able Accounts

What is an ABLE account?

ABLE Accounts are tax-advantaged savings accounts for people with disabilities. The account owner—the person with a disability—can deposit their income in their ABLE Account, and in turn, the income earned on the account will not be taxed. All deposits made to the account must be post-tax, meaning the tax must already be deducted from the total income. Ultimately, ABLE Accounts help people with disabilities and their families save money for the future.

Why are ABLE accounts useful?

ABLE Accounts allow people with disabilities to save for the future while keeping their eligibility for public benefits like SSI and Medicaid. Most public benefits programs, such as SSI, Medicaid, and SNAP, require that an individual has less than $2,000 in savings to be eligible for benefits. This forces people with disabilities to stay poor, just so they can receive the benefits they need to survive. Fortunately, ABLE Accounts help change this narrative by allowing people with disabilities to save more than $2,000 while keeping their benefits. ABLE Accounts allow eligible people and their families to establish a savings account that, largely, does not affect their public benefits. The point of ABLE Accounts is to allow people with disabilities to save in order to secure disability-related funding for future expenses such as accessible housing, caregivers, and assistive technology.

Who is eligible for an ABLE account?

To be eligible for an ABLE Account, you must be:

  • An individual with a significant disability
  • An individual whose disability was acquired before turning 26 years old
  • An individual who receives SSI or SSDI benefits OR an individual who has significant functional limitations as described by a physician

If you do not currently receive SSI or SSDI benefits, you may still be eligible for an ABLE Account. To become eligible, you must meet the Social Security Administration’s definition of a significant disability that leads to functional limitations, and you must then receive a letter of certification from your physician.

What expenses are allowed by ABLE accounts?

ABLE Account savings can only be used for disability-related expenses. Disability-related expenses include any costs that are related to the individual with a disability as a result of their disability. Examples of disability-related costs include costs of education, transportation, caregiving, health care, assistive technology, and any other expense that is related to one’s disability. Disability-related expenses also include any products or services that could increase one’s independence or quality of life.

How much money someone put in an ABLE account?

Each year, an ABLE Account must not exceed $15,000 in deposits. As long as a person with a disability, along with their friends and family, does not deposit more than $15,000 into their ABLE Account in a given year, they can maintain their eligibility for public benefits.

The total limit an ABLE Account can hold over time varies from state to state based on state limits for education-related 529 savings accounts. Some states set their ABLE Account limit at $100,000 total, while others set their ABLE Account limit at $529,000 total. However, if you are an SSI recipient, you have further limitations on how much your ABLE Account can hold at a given time.

If you receive SSI and utilize an ABLE Account, you must keep your ABLE Account total under $100,000 to maintain your eligibility for SSI benefits. If your ABLE Account total exceeds $100,000, your SSI benefits will be suspended until the account falls back under the $100,000 limit. The good news is this: if your account exceeds $100,000 and if you’re on SSI, your Medicaid benefits will not be suspended. This means you can save over $100,000 through your ABLE Account and still receive Medicaid benefits.

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