1. What is an ABLE account and who can open one?

An ABLE (Achieving a Better Life Experience) account is a tax-advantaged savings/investment account designed for individuals with disabilities. Due to the net worth limitations for these individuals, this account was introduced in 2014 designed as a vehicle for individuals with disabilities and their families to save for certain lifestyle expenses without affecting disability benefits up to a certain amount. The funds in this account can be used for qualified disability expenses such as housing, education, transportation, health care, employment support, assistive technology, and more. Since 2014, federal and state rules have expanded to allow further account/withdrawal flexibility along with broadening the qualifications on who is able to open or contribute to an ABLE account. As of January 1, 2026, an individual may qualify to open an ABLE account if their disability began before age 46 (previously age 26), significantly expanding access to millions of Americans.

 

For further information go to ABLE National Resource Center at https://www.ablenrc.org/

​

2. What are the benefits of an ABLE account?

ABLE accounts allow money to grow tax-free, and withdrawals for qualified disability expenses to also come out of the tax-free. Most importantly, they allow individuals with disabilities to save money while helping preserve eligibility for important benefits like Supplemental Security Income (SSI) and Medicaid/Medicare. Limits tend to change yearly, but for 2026 an ABLE account can accumulate up to $100,000 and that money is excluded from SSI’s resource limit. This allows the individuals to find further independence for themselves to participate in day to day activities that they may not have been able to afford in previous years. It also allows families and caregivers to accumulate funds for the betterment of the individual’s quality of life without having to use funds dedicated to other expenses. This allows further cash flow flexibility for the families/caregivers along with growing financial independence for the individual. 

​

3. What can ABLE account funds be used for?

ABLE account funds can be used for a wide range of “qualified disability expenses,” including:

• Housing and rent

• Education and job training

• Transportation

• Health care and insurance premiums

• Assistive technology

• Personal support services

• Financial management and legal fees

• Basic living expenses that improve health, independence, or quality of life

​

4. How much can be contributed to an ABLE account each year?

For 2026, the standard annual contribution limit is $20,000, and anyone—parents, grandparents, friends, employers, or the account owner—may contribute. If an individual with disabilities is employed, they may be able to contribute additional amounts under the ABLE to Work provision. In 2026 this additional amount is the lesser of income that the individual made that year up to $15,650. In addition, employers are able to work with the ABLE account for payroll deduction and employer match as ABLE account contributions. 

Contributions to an ABLE account can be made through payroll deduction if the individual is working, check, ACH, EFT.

 

5. How did SECURE Act 2.0 change ABLE accounts?

SECURE Act 2.0 included the ABLE Age Adjustment Act, which increased the age of disability onset requirement from before age 26 to before age 46, effective January 1, 2026. This expansion opens the door for many individuals who were previously ineligible, including many veterans and adults who became disabled later in life. If an individual meets the Social Securities definition of disabled by 46 years old or younger, that individual is qualified to open an account.  

 

6. What other recent legislative updates should ABLE account owners know about?

Recent legislation made several important ABLE provisions permanent, including:

• The ABLE to Work provision, which allows eligible employed individuals to contribute more than the standard annual limit.

• The ability to roll funds from a 529 college savings plan into an ABLE account (subject to annual limits).

• Eligibility for the Saver’s Credit for qualifying ABLE account contributions, helping some individuals receive a tax benefit for saving.

These updates make ABLE accounts an even more powerful planning tool for individuals with disabilities and their families.

Disclaimer: Contribution limits, eligibility rules, and tax treatment may change and can vary by state. Individuals should consult with a qualified financial, tax, or legal professional regarding their specific situation.

 

7. Are There Any Potential Tax Deductions for Contributing to an ABLE Account?

Most states have a “state-sponsored” ABLE account that also allows individuals that contribute to an ABLE account to take potential state tax deductions. Michigan, for instance, offers up to a $5,000 state tax deduction per individual per year for contributing to an ABLE account. Each state is different, but as of this time there are no federal tax deductions. 

 

8. How Do I Open An ABLE Account?

Most states offer state-sponsored ABLE accounts. Michigan, for instance, offers the MiABLE. To open an account, you can go to https://www.michigan.gov/miable and click the option to “access or open an account”. The Michigan ABLE account is self-directed, meaning that there is no financial advisor on this account and for questions the individual or custodian will contact MiABLE for any questions. 

If you are in need of direction or would like to view an advisor-led ABLE account, please contact a financial professional and they can assist in opening an ABLE account.  

​

9. Midwest ABLE Account Comparisons:

For more information or other state ABLE account comparisons go to https://www.ablenrc.org/compare-states/

​