ABLE Accounts

The Basics

A tax-free Achieving a Better Life Experience (ABLE) account lets people with disabilities save for their future without affecting their benefits. It also lets family and friends give them money.

If you have a qualifying disability that began before you turned 26, you may be able to save up to $32,580 each year in an ABLE account without affecting Medicaid, Supplemental Security Income (SSI), and most other benefits, as long as you meet all the other benefits rules.

Of that $32,580 per year, up to $18,000 can come from any source, including your family, friends, benefits, or other unearned income. If you have a job, you can save up to another $14,580, which can only come from your own earned income.

An ABLE account lets you:

  • Build up savings without affecting your benefits: Up to $100,000 in your ABLE account won’t affect your SSI benefits. And no matter how much you have in your ABLE account, the money in it won’t affect Medicaid, Kentucky Transitional Assistance Program (K-TAP), Supplemental Nutrition Assistance Program (SNAP), and most other programs with a resource limit.
  • Get money from family and friends without affecting your benefits: Whether you earn the money yourself or it’s a gift from others, up to $18,000 each year can be added to your ABLE account without any changes in your SSI or other benefits.
  • Have a job, and save some or all of your earned income in your ABLE account.
  • Spend the money saved in your ABLE account on many types of daily expenses, not just medical costs: There are rules about how to spend the money, but there’s also a lot of flexibility.
  • Enjoy tax advantages: The growth of the investments in an ABLE account isn’t taxed, so your wealth will grow faster. However, when you take money out of the account, you have to spend it on qualified disability-related expenses, or it will be taxed as income.

ABLE programs are set up by each state. Kentucky's ABLE account program is STABLE Kentucky, which is only open to Kentucky residents. The ABLE National Resource Center provides details about the ABLE programs in other states.

If you qualify, you can open an ABLE account in any state that has an ABLE program open to customers nationwide (you do not have to live in the state where you open an ABLE account). However, you can only open one ABLE account, so you need to decide which state offers the ABLE program that works best for you. The good news is that you can switch your ABLE account from one state program to another. You do not have to stick with the first state program you choose.

When did ABLE start?

The federal Achieving a Better Life Experience Act was signed into law in December 2014. The first ABLE programs opened to the public in 2016.

An ABLE account can be set up in addition to a Special Needs Trust, but an ABLE account costs less to set up and gives you more choice and control. Individuals with disabilities and their families may choose to have both an ABLE account and a trust.

If you have an ABLE account and work:
  • You can put up to an extra $14,580 of your earnings into your account (on top of the regular $18,000 that is allowed). The $14,580 must be from your own earnings – it cannot be contributions from others or money you get from benefits or other unearned income.
    • Note: This means that if you earn $14,580 or more, you could have a total of up to $32,580 go into your ABLE account in a year. If you earn less than $14,580, the amount you could contribute would be lower.
    • 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.
  • You may qualify for the Saver’s Credit when you file your federal taxes.
  • You have to make sure that too much money isn’t contributed into your account (even if it is other people making the deposits). Check with your ABLE program if you have questions about this.

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