ABLE Act: Things To Know

The ABLE (Achieving a Better Life Experience) Act

At the end of 2014, Congress passed the ABLE Act, which was subsequently signed into law by President Obama. This legislation is a break-through in allowing individuals with disabilities to save for their future needs while still retaining eligibility for critical federal assistance programs.

The ABLE National Resource Center has created a website to help you and your family understand eligibility and the application process for creating ABLE Accounts. For access to webinars and more information about what other states are doing, visit

Washington State's ABLE Program has launched and is now live. Information and instructions are posted at Beneficiaries with accounts through Oregon’s ABLE for All Program can transfer their account to Washington for free.

The Department of Commerce has also announced that residents who enroll before June 30, 2019 will be able to waive the $35 account maintenance fee

In order to best help navigate this new law, below is a list of the top things you should know.

  1. Under the new law, states will be able to establish and operate ABLE programs. Under the program, eligible state residents will be allowed to set up special tax-free savings accounts (i.e. an ABLE account) to help cover their disability related expenses.
  2. Individuals are limited to one ABLE account.
  3. Contributions to ABLE accounts can be made by any person – the account holder, relatives, friends, anyone! However, there is an annual cap on the amount individuals may contribute to an ABLE account. 
  4. Income earned from the ABLE accounts will not be taxed, and withdrawals from the accounts for qualified expenses are not taxable.  Withdrawals made for ineligible expenses, however, are subject to income tax plus a 10% penalty.
  5. Qualified expenses are those directly related to the individual’s disability, such as health care, education, housing, transportation, employment training and services, assistive technology, personal support and other related services and expenses that states choose to allow under their respective ABLE programs.
  6. To be eligible for an ABLE account, an individual must meet two criteria:
    1. Have become disabled before the age of 26, and;
    2. Either receive federal benefits under the Supplemental Security Income (SSI) or Social Security Disability Insurance (DI) programs, or receive a disability certification under pending IRS rules
  7. ABLE accounts do not impact an individual’s eligibility for Medicaid.  However, states would be required to recoup certain expenses through Medicaid upon the death of the individual.
  8. The first $100,000 in ABLE account balances are not counted towards the SSI program’s $2,000 individual asset limit.  (This means in effect an individual may have up to $102,000 in an ABLE account and remain eligible for SSI.)  Any distributions from an ABLE account for housing, however, would be treated as income for the purposes of the SSI program.