Common Pitfalls

You must spend any money you take out of your ABLE account on qualified disability expenses. If you spend it on expenses that don’t qualify, or if you just put the money in a different account, you may have to pay income tax on that amount, plus a 10% penalty, and this might affect Supplemental Security Income (SSI), Medicaid, or other benefits.

There are two limits on how much can be put into your account each year, based on where the money comes from:

• Up to $19,000 from any source (including your family and friends, your benefits, and other unearned income
• Another $15,060 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.

It’s important to keep good records. Even if other people make deposits, you are the one who has to make sure that too much money isn’t put into your ABLE account.

Learn more about depositing money into your ABLE account.

If the amount in your ABLE account goes over $100,000, your SSI benefits stop. The suspension has no time limit, and your SSI benefits can start again if the balance drops below $100,000.

Even if SSI benefits stop because you have too much money in your ABLE account, you keep your Medicaid coverage as long as you meet all other eligibility rules.