ABLE Accounts Help Families With Cost of Care

Many individuals with disabilities and their families depend on a variety of public benefits for income, health care, and food and housing assistance. However, recipients of these benefits are limited in the amount of financial resources they can have and still remain eligible – causing some families to struggle financially.

ABLE accounts are tax-advantaged savings accounts for individuals with disabilities ─ both children and adults ─ and their families. Income earned by the accounts is not taxed, and contributions may be made to an account by any person (the account beneficiary, family or friends). The total annual contribution by all participating individuals is currently $14,000.

In general, ABLE accounts do not affect a person's eligibility or the amount of a benefit or assistance provided under many federal programs such as Medicaid, Supplemental Security Income (SSI) and other public benefits. Although there are special rules and limits that apply to SSI. Go to page 6 of IRS publication 907 or www.irs.gov for more information on ABLE.

Funds in ABLE accounts can be used for any expense related to living life with a disability. These expenses may include education, housing, transportation, employment training and support, assistive technology, personal support services, financial management and administrative services, and health care not covered by insurance, Medicaid or Medicare.

ABLE accounts may be opened for individuals with significant disabilities with an age of onset of disability before turning 26 years of age. You need not be under the age of 26 to be eligible for an ABLE account but must have had an age of onset before your 26th birthday.

Not all states have established ABLE programs, but regardless of where you live, you are free to enroll in any state's program provided that it accepts out-of-state residents. To find which states have ABLE programs and which accept out-of-state enrollments, refer to the ABLE state pages.

Learn more about ABLE accounts and how to open one. Visit the ABLE National Resource Center website.

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