- A disability certification, to be signed by the individual or someone else establishing the ABLE account for the individual:
- Certifies that the individual is blind or has a physical or mental impairment that results in marked and severe functional limitations and that such blindness or disability began before age 26;
- Includes a certification that the individual has a copy of the diagnosis relating to their relevant impairment(s), signed by a physician.
- An eligible individual may have only one ABLE account.
- A contribution is the deposit of funds into an ABLE account. Any person may contribute to an ABLE account for an eligible beneficiary. Typically, contributions for an ABLE account may not exceed the annual gift tax exemption ($18,000 in 2024). However, if the beneficiary is working, and they or their employer are not making certain retirement plan contributions, the beneficiary may contribute an additional amount equal to the lesser of their annual compensation or the individual Federal Poverty Level for a one-person household in their state of residence for the prior calendar year (which for 2023, would be $13,590 in the continental US, $16,990 in Alaska, and $15,630 in Hawaii). For 2024 the additional amounts are $14,580 in the continental US, $18,210 in Alaska, and $16,770 in Hawaii.
- The distribution of all or some of the funds from one ABLE account to the ABLE account of the designated beneficiary or a member of their family; or
- A limited amount from a qualified tuition plan (also called a 529 plan) to the SSI applicant, recipient, or deemor’s ABLE account.
- the entire balance of an ABLE account into an ABLE account of the same designated beneficiary in which the first ABLE account is closed upon the transfer of the funds; or
- part or all of the balance to an ABLE account of an eligible individual who is a member of the family of the designated beneficiary.
TREATMENT OF ABLE UNDER FEDERAL MEANS-TESTED PROGRAMS
- SSI Program
- Medicaid Program
- Medicaid Payback Provision
SSI Program
We disregard the first $100,000. Only assets above $100,000 count as a resource. If an ABLE balance exceeds $100,000 by an amount that causes you to exceed the SSI resource limit -- whether alone or with other resources, we suspend the SSI payment until the countable resources are below the allowable limit.
Medicaid Program
A beneficiary's Medicaid continues when an SSI recipient's ABLE account exceeds $100,000 by an amount that causes the recipient to exceed the SSI resource limit--whether alone or with other resources. The recipient retains eligibility for Medical Assistance (Medicaid) without a time limit as long as he or she remains otherwise eligible. If ABLE resources above $100,000 cause an individual to exceed the resource limit, then Medicaid continues uninterrupted. If non-ABLE resources over $100,000 cause an individual to exceed the resource limit, Medicaid is suspended.
Medicaid Payback Provision
A portion or all of the balance remaining in the ABLE account of a deceased designated beneficiary must be distributed to a State that files a claim against the designated beneficiary or the ABLE account itself with respect to benefits provided to the designated beneficiary under that State's Medicaid plan. The payment of such claim (if any) will be made only after providing for the payment from the designated beneficiary's ABLE account of the designated beneficiary's funeral and burial expenses and all outstanding payments due for their other qualified disability expenses, and will be limited to the amount of the total medical assistance paid for the designated beneficiary after the establishment of the ABLE account over the amount of any premiums paid, whether from the ABLE account or otherwise by or on behalf of the designated beneficiary, to a Medicaid Buy-In program. After the expiration of the applicable statute of limitations for filing Medicaid claims against the designated beneficiary's estate, a qualified ABLE program may distribute the balance of the ABLE account to the successor designated beneficiary or, if none, to the deceased designated beneficiary's estate. Some States have taken steps to limit payback. See state plan disclosure documents for specific details.
Frequently Asked Questions:
An Achieving a Better Life Experience (ABLE) account is a tax-advantaged savings account to which contributions can be made to meet the qualified disability expenses of the owner, or designated beneficiary. ABLE accounts receive favorable treatment and are excluded from resources in whole or in part, for purposes of certain means-tested Federal programs.
The Stephen Beck, Jr., Achieving a Better Life Experience (ABLE) Act became law on December 19, 2014. The law aims to increase financial independence and improve quality of life while easing financial hardship faced by many individuals with disabilities and their families.
In order to be eligible to own an ABLE account, a person must be:
- receiving Supplemental Security Income (SSI) based on blindness or disability that began before age 26;
- in SSI suspense due solely to excess income or resources but otherwise eligible for SSI based on blindness or disability that began before age 26;
- receiving Social Security Disability Insurance benefits (DIB), childhood disability benefits (CDB), or widow’s with disabilities or widower’s benefits (DWB) based on blindness or disability that began before age 26; or
- the subject of a disability certification.
- A disability certification, to be signed by the individual or someone else establishing the ABLE account for the individual:
- Certifies that the individual is blind or has a physical or mental impairment that results in marked and severe functional limitations and that such blindness or disability began before age 26;
- Includes a certification that the individual has a copy of the diagnosis relating to their relevant impairment(s), signed by a physician.
Most ABLE programs simply require individuals to certify that they have a disability and are eligible to open an account. You do not, generally, have to send in medical records or diagnoses in order to open an ABLE account. The person must make the proof available for the IRS or the ABLE program if requested to satisfy the disability certification requirement. Account owners must recertify their eligibility annually.
The person with the disability is the owner and the beneficiary of the ABLE account. Therefore, you may see “owner” and “designated beneficiary” used interchangeably when you get information about ABLE accounts.
A person with signature authority over an ABLE account may administer the account on behalf of the individual. The person may be the eligible individual's agent under a power of attorney or, if none, a conservator or legal guardian, spouse, parent, sibling, grandparent of the eligible individual, or a representative payee appointed for the eligible individual by SSA, in that order. Be aware that the representative payee appointed by SSA may not be the same person who has signature authority over the beneficiary's ABLE account.
Up to and including $100,000 in the person’s ABLE account is excluded from being treated as a countable resource for SSI benefits calculations.
Up to and including $100,000 in an ABLE account is disregarded. Only assets above $100,000 count as a resource for SSI purposes. If the ABLE account balance exceeds $100,000 by an amount that causes the recipient to exceed the SSI resource limit, either alone or with other resources, SSI benefits will be suspended without a time limit (assuming that the individual otherwise remains eligible for SSI). SSI benefits are reinstated for all months in which the ABLE account balance no longer causes the individual to exceed the resource limit and the individual is otherwise eligible for SSI.
The SSI benefits will be suspended and the eligibility for Medical Assistance (Medicaid) will be lost. The SSI eligibility and Medicaid benefits can be reinstated for all months in which the resources, including the ABLE account, no longer exceed the resource limit. The SSI eligibility terminates after 12 months if the suspension continues for that period of time.
No. Medicaid eligibility continues even if the ABLE account exceeds $100,000 by an amount that causes the recipient to exceed the SSI resource limit, whether alone or with other resources, as long as the individual remains otherwise eligible for SSI.
Any person may contribute to, or deposit funds into, an ABLE account. (The Internal Revenue Code defines a person as including an individual, trust, estate, partnership, association, company, or corporation.)
Yes. Beneficiaries who receive Social Security or SSI benefits can deposit their benefits into their ABLE accounts. If the beneficiary has a representative payee (payee), the payee must ensure that the ABLE account adheres to all requirements of the Representative Payee Program. For more information for payees who use ABLE accounts to manage benefits, please visit our website: Social Security - Representative Payee Program - Payee and ABLE Accounts (ssa.gov).
For information on representative payees’ use of ABLE accounts to manage funds, please visit Use of ABLE Accounts by Representative Payees.
Total contributions from all sources are limited to the annual gift tax exclusion, unless the account owner is employed (see below). In 2023, the gift tax exclusion limit is $17,000. In 2024, the gift tax exclusion is $18,000.
Yes. ABLE account owners who are employed, and for whom certain retirement plan contributions have not been made for the taxable year, may contribute additional funds to their ABLE accounts beyond the annual gift tax exclusion limit ($17,000 in 2023; $18,000 in 2024). The additional annual contributions may not exceed the federal poverty level for a one-person household (in the designated beneficiary’s state of residence) for the previous calendar year or the designated beneficiary's compensation for the current taxable year, whichever is less.
A distribution is any payment from an ABLE account. Distributions (other than returns of contributions) may be made only to, or for the benefit of, the designated beneficiary. Distributions for Qualified Disability Expenses are not counted as taxable income.
Qualified Disability Expenses (QDE) are expenses that relate to the disability or blindness of the designated beneficiary and that are for the benefit of the designated beneficiary in improving health, independence, or quality of life. Such expenses include, but are not limited to, expenses related to the designated beneficiary’s: education; housing; transportation; employment training and support; assistive technology; healthcare, prevention, and wellness; financial management and administrative services; legal fees; account oversight and monitoring; funeral and burial expenses; and basic living expenses.
A distribution for a housing expense or for an expense that is not a QDE is counted as a resource, if the designated beneficiary retains the distribution into the month following the month of receipt. If the designated beneficiary spends the distribution within the month of receipt, there is no effect on SSI eligibility.
The ABLE account may be established by a person selected by the eligible individual; or If an eligible individual (whether a minor or adult) is unable to establish their own ABLE account, an ABLE account may be established on behalf of the eligible individual by: the eligible individual’s agent under a power of attorney or, if none, by a conservator or legal guardian; spouse, parent, sibling, grandparent of the eligible individual; or a representative payee appointed for the eligible individual by the Social Security Administration (SSA), in that order. An account opened by a representative payee appointed by SSA must meet all of the SSA account rules and requirements.
You can open an ABLE account by going directly to an ABLE program’s website or by calling their customer service. Some state programs may offer paper enrollment. You can view a list of all state ABLE programs and websites at www.abletoday.org/able-programs.
States administer ABLE programs. You can view a listing of all state ABLE programs at www.abletoday.org/able-programs.
No. Eligible persons or their authorized legal representatives may open an account in their own State’s plan or in a State plan that is available to out-of-State residents. Some State plans are available only to residents of that State. It is important to look at one’s home State plan first in case there are tax benefits for owning an ABLE account with that plan.
Only one ABLE account can be owned no matter what plan you enroll in.
ABLE accounts are transferrable to siblings who are also eligible individuals. See state plan disclosure documents for specific details.
Earnings on an ABLE account and distributions from the account for QDEs are not counted as taxable income.
OTHER USEFUL LINKS
Please note: Social Security provides this section as a courtesy to help notify you of ABLE accounts. However, Social Security is not affiliated with and does not endorse any ABLE account provider or its services.
- A disability certification, to be signed by the individual or someone else establishing the ABLE account for the individual: