ABLE Accounts – Special Savings Plans for Disabled Individuals

Modeled after 529 Savings Plans, Congress passed the Achieving a Better Life Experience (ABLE) Act of 2014. The Act allowed states to create tax-advantage savings programs for individuals with disabilities. Disabled individuals and their families can save money in these accounts without risking losing their governmental benefits (i.e. Medicaid or Supplemental Security Income). Generally, an individual can open one ABLE Account at a time.

Who Can Qualify for the ABLE Account?

In general, an individual must have incurred a disability before the age of 26. If the disabled individual is 26 and receives Supplemental Security Income or Social Security Disability Income, that individual is automatically eligible to establish the ABLE Account.

How Much Can I Put into the ABLE Account?

All individuals may contribute up to $15,000 to this account in each calendar year.

States have set limits for total allowable ABLE savings. State ABLE limits range from $235,000 to $529,000.

If a disabled individual receives Supplemental Security Income benefits (“SSI”), the law has additional limitations. Until the ABLE Account attains an account balance of $100,000, the law exempts the account balance from the $2,000 resource limits for qualifying for SSI Benefits. After the account balance exceeds $100,000, the law will count the excess account balance towards the resource limit. If the account balance exceeds the limit, the law suspends SSI cash benefits to a disabled individual until the ABLE account balance goes below the $100,000 threshold amount.

Also, if a disabled individual is employed and does not participate in an employer-sponsored retirement account (i.e. 401(k) or 403(b)), they can make an additional contribution up to the lesser of: (1) the ABLE account owner’s compensation for the tax year, or (2) the poverty line amount of $12,760 (2021) in the continental U.S., $14,680 in Hawaii and $15,950 in Alaska.

Are the Contributions Tax-Free?

The beneficiary, the disabled individual, is the account owner. Any income earned by the ABLE Account is tax-free. Any contribution to the ABLE Account may not be deductible for federal tax purposes.  However, some states may allow for a state income tax deduction for any contribution made to an ABLE Account.

What Can The ABLE Account Be Used For?

The ABLE Account must be used for a disabled individual’s qualified disability expenses. Qualified disability expenses are expenses related to the disabled individual who incurs expenses related to living a life with a disability.  These expenses usually include education, food, housing, transportation, employment training and support, assistive technology, personal support services, health care expenses, financial management and administrative services, and other expenses which help improve health, independence, and/or quality of the disabled individual.

Where Can I Open The ABLE Account? 

You can open the ABLE Account in any state that operates a state-level ABLE program. You do not have to be a resident of that state to open an account in that specific state.

Clients should feel free to contact one of us in the Tax, Trusts & Estates Department if you have any questions regarding ABLE Accounts, tax planning, estate planning (i.e. Wills, Trusts, Living Wills, Health Care Proxies, etc.), and estate and trust administration.

Co-Chairs of the Tax, Trusts & Estates Department:

Martin J. Dever, Jr. and Jonathan Kukin


Arthur I. Goldberg

Peter J. Bakarich, Jr.


Doris Brandstatter

Victor Manuel Nazario III

E mail us to make an appointment or to find out more about the process.

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