ABLE Accounts

Frequently Asked Questions

If you have a disability that meets Social Security adult standards and began before you were 26, you can save money in a tax-free ABLE account without affecting your Supplemental Security Income (SSI), Medicaid, and most other benefits (as long as you meet all other benefit criteria). The growth of the investments in an ABLE account is tax-free, and you can spend the money on disability-related expenses, like housing, transportation, or education.

However, there are limits on how much can be deposited into your ABLE account in a single calendar year. Also, if the total amount in your ABLE account goes over $100,000, your SSI benefits stop until the balance falls below $100,000.

ABLE accounts are available to anyone who has a disability that began before they were 26 and meets the Social Security Administration’s (SSA) standards for a disability. (SSA has different standards for children, for adults, and for blindness.) Supplemental Security Income (SSI), Social Security Disability Insurance (SSDI) , Medicaid, and other programs use the SSA standards, so if you are receiving benefits from those or similar programs, you definitely qualify for an ABLE account. If you don’t get these benefits, you can still qualify for an ABLE account by having a doctor verify that your disability meets the SSA standard, and causes “marked and functional limitations.”

Learn more about whether your disability qualifies.

ABLE accounts offer tax advantages that help your wealth grow faster. And ABLE accounts let people who get benefits from programs with a resource limit, like Supplemental Security Income (SSI), Medicaid, Food Assistance Program (SNAP), and FIP, build up a savings safety net and plan for the future without having to worry that their savings will cause them to lose their benefits. The goal of the ABLE accounts program is to give people with disabilities more financial independence.

An ABLE account is fairly easy and inexpensive to set up. You can set up the account yourself or your parent, legal guardian, or an agent with a valid power of attorney can set up the account for you. Each state is allowed to set up an ABLE account program, but ABLE is fairly new, so not all states have a program yet. Michigan's ABLE account program is MiABLE.

You can open an ABLE account in any state you choose — you do not have to open an account in the state where you live. States with ABLE programs list their program details and explain their application process online. The ABLE National Resource Center lists details about each state’s ABLE legislation progress and programs, with links to the websites for states that have their ABLE programs up and running.

Use the ABLE National Resource Center to find out which states have ABLE account programs. States with ABLE programs post account details online, including how to enroll online.

When comparing programs, check:

  • The minimum amount you need to open an ABLE account, and the cost of any fees
  • How you can deposit and withdraw money from the account — electronic transfer, paper check, debit card, etc. — and how long it takes to get your money when you need it
  • The investment choices you have (each state offers multiple options, but some offer more than others)
  • The level at which the program stops letting you make more deposits (usually somewhere between $200,000 and $500,000)

No. You can only have one ABLE account, but you can transfer your account from one state to another if the first state program you choose doesn’t meet your needs (there may be minor fees to make the transfer).

If you get Supplemental Security Income (SSI) benefits and the total amount in your ABLE account goes over $100,000, your SSI benefits stop until the balance drops below $100,000. And each state sets the maximum amount that can be in its ABLE accounts; that maximum can be $200,000 – $500,000 or more.

However, there are two limits on how much money can be put in your ABLE account each calendar year:

  • Up to $18,000 in total deposits can come from any source — you, your family and friends, your benefits, and other unearned income, and
  • If you have a job, you can deposit another $14,580 of your own earned income.

Combined, this means that if you work, you could save as much as $32,580 in your ABLE account in 2024.

Learn more about depositing money into your ABLE account.

Anyone — you, your family, your friends — can put money into your ABLE account, but there are two limits on how much can be deposited in a calendar year, depending on where the money comes from:

  • Up to $18,000 from any source (including your family and friends, your benefits, and other unearned income)
  • Up to another $14,580 from your own earned income (if you have a job)
    • Note: If you or your employer make contributions to a retirement plan set up by your employer, you might not qualify for the extra ABLE contribution amount based on having a job (you can still make regular ABLE contributions). If you aren't sure about this, ask your ABLE account program or check with a tax expert. Get more information about this rule from the ABLE National Resource Center.

Learn more about depositing money into your ABLE account.

Rules vary by state, but you can typically use a paper check, electronic fund transfer, payroll deduction, or an automatic investment plan to deposit money in your ABLE account. After you deposit the money, you may have to wait 5 – 10 business days before you can use it. You as the account beneficiary or your family or friends can deposit money into your ABLE account.

Rules vary by state. Some accounts ask for a signed withdrawal request stating how you’ll use the money on a qualified disability expense, and it can take 5 – 10 business days to get the money. Some accounts include a prepaid debit card. You can load money from your ABLE account onto the card and then use the card to pay for qualified expenses. You need to spend the amount loaded on the card on qualified expenses by the end of the calendar year, or you will have to pay income tax and a 10% penalty on the leftover amount, and it might affect Supplemental Security Income (SSI) or other benefits.

You can spend money you take out of your ABLE account on any “qualified disability expense,” which means anything that helps you increase or maintain your health, independence, or quality of life. This includes housing, transportation, medical expenses, prevention, wellness, education, employment training and support, assistive technology, personal assistance services, financial management, administrative services, legal fees, and basic living expenses. You will need to keep all receipts to prove you spent the money on qualified expenses.

Learn more about spending the money in your ABLE account.

ABLE accounts can have two tax benefits:

  1. The growth of your investments isn’t taxed, and
  2. If you work and save earned income in your ABLE account, you may qualify for the federal Saver’s Credit.

However, to get these tax benefits any money taken out of your ABLE account must be spent on qualified disability-related expenses. If you take money out of your ABLE account and don’t spend it on disability-related expenses, you may have to pay income tax plus a 10% penalty.

Learn more