Direct Answer
An ABLE account (Achieving a Better Life Experience, IRC Section 529A) is a tax-advantaged savings account for individuals with qualifying disabilities. The 2026 annual contribution limit is $18,000 from all contributors combined. Qualified disability expenses are broadly defined; withdrawals for QDEs are tax-free. Balances up to $100,000 are excluded from the SSI resource test. At death, states may file a Medicaid payback claim.
ABLE Account (529A) Profile: 2026 Limits, Eligible Expenses and Rules
What is an ABLE Account?
An ABLE account (also called a 529A account or 529 ABLE) is a tax-advantaged savings and investment account established under the Achieving a Better Life Experience (ABLE) Act of 2014, codified at IRC Section 529A. ABLE accounts allow individuals with qualifying disabilities to save money without losing eligibility for federal means-tested benefits such as SSI and Medicaid.
Eligibility: The designated beneficiary must have a qualifying disability (blindness or a physical or mental impairment that results in marked and severe functional limitations) with onset before age 26. The age-26 onset requirement will increase to age 46 beginning in 2026 under the ABLE Age Adjustment Act provisions included in SECURE 2.0.
Each eligible person may have only one ABLE account. Accounts are administered by states; you can open an account in any state that accepts out-of-state residents, not just your own. Contributions may be made by the beneficiary, family, friends, or anyone else.
2026 Contribution Limits
| Category | 2026 Limit |
|---|---|
| Annual limit (all contributors combined) | $18,000 |
| ABLE-to-Work additional contribution (employed beneficiary) | Up to lesser of earned income or FPL for one-person household (~$15,650 for 2025) |
| SSI resource exclusion | Up to $100,000 |
| State aggregate account limit | Varies by state ($100,000-$550,000) |
The $18,000 annual limit equals the 2026 gift tax annual exclusion. ABLE-to-Work contribution is available only to employed beneficiaries who do not also contribute to an employer-sponsored retirement plan. FPL figures adjust annually. Source: IRS Rev. Proc. 2025-19; SECURE 2.0 Act of 2022.
Qualified Disability Expenses
Qualified disability expenses (QDEs) are broadly defined to include any expense that maintains or improves the health, independence, or quality of life of the designated beneficiary. Specific examples include:
- Education (including K-12 tuition, vocational training)
- Housing (rent, utilities, mortgage payments, modifications)
- Transportation (vehicle purchases, public transit, Uber/Lyft for disability)
- Employment training and support (job coaches, workplace modifications)
- Assistive technology and personal support services
- Health, prevention, and wellness
- Financial management and administrative services
- Legal fees and oversight
- Funeral and burial expenses
- Basic living expenses (food, clothing, household items)
Non-qualified withdrawals are included in gross income and subject to a 10% additional tax on the earnings portion. Non-qualified ABLE distributions may also affect SSI and Medicaid eligibility.
SSI and Medicaid Rules
ABLE account funds are excluded from the SSI resource test up to $100,000. If the balance exceeds $100,000 above the SSI resource limit for the beneficiary, SSI payments are suspended (not terminated) until the balance falls below the threshold. ABLE account funds do not affect Medicaid eligibility regardless of balance.
Medicaid payback: At the beneficiary's death, states may file a claim for Medicaid costs paid on behalf of the beneficiary after age 26 (or the applicable age of onset cutoff for eligibility). This claim takes priority over transfers to other beneficiaries. Rolling an ABLE account balance to another eligible beneficiary's ABLE account, or rolling back to a 529 plan before death, can be used to reduce or avoid Medicaid payback.
Frequently Asked Questions
- What is the 2026 ABLE account contribution limit?
- The 2026 ABLE account annual contribution limit is $18,000 from all contributors combined. Employed beneficiaries who do not participate in an employer retirement plan may contribute an additional amount up to their own compensation or the federal poverty level for a one-person household, whichever is less. Source: IRS Rev. Proc. 2025-19.
- What are qualified disability expenses for an ABLE account?
- Qualified disability expenses (QDEs) include any expense that maintains or improves the health, independence, or quality of life of the beneficiary. Examples include education, housing, transportation, employment training, assistive technology, personal support services, health and wellness, financial management, legal fees, funeral costs, and basic living expenses. The IRS definition is broad. Non-qualified withdrawals are taxed plus a 10% penalty on earnings. Source: IRC Section 529A; IRS Notice 2015-18.
- How does an ABLE account affect SSI and Medicaid eligibility?
- ABLE account balances are excluded from the SSI resource test up to $100,000. Balances above that may temporarily suspend (not terminate) SSI payments. ABLE funds do not affect Medicaid eligibility. At death, states may file a Medicaid payback claim for costs paid after age 26. Rolling balances to another ABLE account or back to a 529 plan before death can reduce this exposure. Source: Social Security Administration; IRC Section 529A.