On December 19, 2014, the Achieving a Better Life Experience (ABLE) Act was signed into law. The ABLE Act was a bipartisan effort and a victory for disability rights. Many people with disabilities rely on government benefits like Supplemental Security Income (SSI) and Medicaid. These benefits are means-tested, which means that a recipient who has too much income or assets could lose their eligibility for aid.

The income and asset limits for government benefits are very strict—typically, individuals need to have less than $2,000 in assets to qualify for the benefits they need to survive. As such, it was nearly impossible for people with disabilities to save money. ABLE accounts, made possible by the ABLE Act, were the solution.

What is an ABLE Account?

An ABLE account is a savings account that enables people with disabilities to save money while maintaining eligibility for essential benefits. Qualifying accounts with balances under $100,000 do not affect eligibility for SSI or Medicaid. If a disabled person has an account containing more than $100,000, SSI eligibility is suspended, but the person continues to receive Medicaid benefits.

However, if there are funds in the account after the disabled person’s death, Medicaid may be able to recover funds the program paid on their behalf from the account.

Who Can Have an ABLE Account?

An ABLE account holder must have a qualifying disability with an onset before age 26. (As of January 1, 2026, the disability must have an onset before the recipient turned 46, thanks to the ABLE Age Adjustment Act.)

In addition, the person who wants to open the account must either:

• Already be receiving either Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI) payments, or
• Be “self-certified, which means to have a disability diagnosis from a licensed physician who certifies that the condition causes “marked and severe functional limitations.” The condition must also be expected to last at least 12 months or result in death, and it must prevent the diagnosed person from engaging in “substantial gainful activity.”

Examples of qualifying disabilities include Down syndrome, cerebral palsy, blindness, muscular dystrophy, and epilepsy, though there are many more conditions that would qualify a sufferer for an ABLE account.

How Do ABLE Accounts Work?

Account holders, or a family member or friend, can contribute up to an annual total limit into an ABLE account. For 2025, that amount is $19,000, the same as the federal gift tax exclusion. Under some circumstances, an account holder who is employed may be allowed to contribute additional amounts—more on that in a moment.

The lifetime balance cap on ABLE accounts varies by state, but is typically between $300,000 and $500,000. However, as noted above, only the first $100,000 in the account is shielded from the SSI resource limit; a balance above that amount could cause the account holder to become temporarily ineligible for SSI.

In addition to helping disabled people save while remaining eligible for government benefits, ABLE accounts offer significant tax benefits. In Michigan and other states, contributions to the earnings in the account grow tax-free, and distributions from the account are also tax-free if used for qualified disability expenses (QDE).

What are Qualified Disability Expenses?

Qualified disability expenses relate to a beneficiary’s disability and allow them to maintain independence, health, and quality of life.

QDE includes expenses for:

• Housing, including rent or mortgage, utilities, property taxes, and maintenance and repairs. (If housing expenses are not paid in the same month that the distribution from the account is made, they could affect SSI.)
• Education, including tuition for K-12, college or graduate school, or vocational school; books and materials; tutoring; educational software; online courses; and the assistance of an aide for educational purposes
• Transportation, including vehicle payments, modifications, maintenance, and insurance; public transit costs; and rideshare services such as Uber or Lyft.
• Technology and assistive devices, including computers, tablets, and smartphones; prosthetics and mobility aids; and screen readers, hearing aids, and Braille displays.
• Health and wellness, including medical, dental, and mental health expenses; counseling; medications; and co-pays, premiums, and deductibles.
• Legal and financial services
• Personal support services, such as in-home caregivers
• In-home accessibility measures
• Employment services

The IRS and the Social Security Administration have expanded what expenses are considered QDEs in recent years. That said, not all expenditures fall into the category of QDE, and account holders should be prepared to document the need for certain expenditures that may be questioned.

Can ABLE Account Recipients Work?

A person who meets the disability requirements of the program can work on a full- or part-time basis, if their disability permits. The ABLE to Work program was established in 2017 as part of the Tax Cuts and Jobs Act (TCJA). The program allows people with disabilities to enter or remain in the workforce and save money in their ABLE accounts—above and beyond the standard contribution limits.

ABLE to Work participants can contribute an additional $15,650 each year to their ABLE accounts, for a total limit of $34,650 in 2025. This additional amount must be from the beneficiary’s own earned income, not a contribution from a friend or family member. In addition, the participant may not contribute to an employer retirement plan in the same year.

Unfortunately, like many of the TCJA provisions, ABLE to Work is scheduled to “sunset” at the end of 2025, but it could be extended.

Are ABLE Accounts the Same as Special Needs Trusts?

No, ABLE accounts are different, but they can work with special needs or supplemental needs trusts to ensure that a person with a disability has the highest possible quality of life. The estate planning attorneys of Barron, Rosenberg, Mayoras & Mayoras, P.C. will work with you to create a plan to ensure your loved one with disabilities has everything they need to thrive.

Schedule a consultation today by calling (248) 641-7070 in Michigan or (941) 222-2199 in Florida to learn how we can assist you. You can also use our simple online contact form.