ABLE Accounts

Rules for Spending ABLE Money

You can spend the money in your ABLE account on any “qualified disability expense.” This can include:

  • Housing (which can be mortgage payments, real property taxes, rent, furniture, heating fuel, gas, electricity, water, sewer, or garbage removal)
  • Transportation (including gasoline and car repairs, public transportation, paratransit, and taxis)
  • Medical expenses, prevention, and wellness (including insurance premiums and copays)
  • Education
  • Employment training and support
  • Assistive technology and personal assistance services
  • Financial management and administrative services
  • Legal fees
  • Basic living expenses

It’s your job to make sure an expense qualifies, and to keep records of how you use your ABLE account money. If you are audited by the Internal Revenue Service (IRS), you will need to show them how you’ve used any money from your ABLE account. Keep all of your receipts. You can put your receipts for ABLE into a binder, or scan them and save them on your smartphone, tablet, laptop, or computer.

If you take money out of your ABLE account but do not use it for qualified disability expenses, you might have to pay federal income tax on that amount, plus a 10% penalty, and it could affect Supplemental Security Income (SSI) and other benefits.


In June, Eric takes $7,000 out of his ABLE account to pay his college tuition, which is due in September. He puts the money in his checking account, so he can pay the tuition in September. In August, Eric gets a job offer and decides not to return to school. He has to spend the $7,000 on qualified disability expenses. If Eric keeps the money but can’t show that he spent it on qualified expenses, his SSI and other benefits may be affected. He may also have to pay income tax and a 10% penalty on the amount.

The rules are stricter for housing-related expenses. If you take money out of your ABLE account for housing-related expenses, you must spend that money in the same month you took it out of the account.


On May 26, Amy takes $500 out of her ABLE account and puts it into her regular checking account so she can pay her June rent. On May 31, she takes out $500 in cash from her checking account and pays her landlord, who gives her a receipt dated May 31. Everything is fine, because she used the money for housing expenses during the same month she took it out of her ABLE account.

But if Amy doesn’t pay her landlord until June, the $500 housing-related ABLE money that is in her checking account on June 1 will be a countable resource and may affect her benefits.

Some states require you (or your parent, guardian, or agent) to prepare a withdrawal request saying how the money will be used for qualified disability expenses, and it can take 5 – 10 business days for you to get the money.

Other state ABLE programs offer a prepaid debit card that lets you (or your parent, guardian, or agent) load specific amounts from your ABLE account onto the card. You can then use the card to pay for qualified disability-related expenses up to the amount loaded on the card (but you still need to keep your receipts to document how you spent the money). You need to spend the amount loaded on the card on qualified expenses by the end of each year. If you don’t, it may affect your SSI benefits, and you may have to pay income tax and a 10% penalty.


Jordan transfers money out of his ABLE account in August and loads it onto the prepaid debit card that came with his account. He uses the card to buy gasoline, pay for car maintenance and repairs, and other transportation-related expenses. But in October, Jordan’s schedule changes, and he uses his car a lot less. By December, he still has quite a bit of ABLE money loaded on his debit card. Before the end of the year, Jordan must spend the ABLE money on a qualified disability expense or he may have to pay the income tax and 10% penalty, and his SSI and other benefits may be affected.

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