ABLE Accounts: Eligibility Rules and What Families Need to Know
By Kim Boyer | November 2, 2026
Families who have a loved one with a disability often face a balancing act. They want to help their loved one achieve more independence while providing a good quality of life, and without jeopardizing essential public benefits.
For someone receiving Supplemental Security Income (SSI), even a modest amount of money can create a problem if countable resources exceed the program’s strict limits. Losing the benefits can also mean losing access to health coverage through Medicaid.
That’s where an ABLE (Achieving a Better Life Experience) account may help. These tax-advantaged accounts allow eligible individuals with disabilities to save and invest money for qualified disability expenses. This means a loved one with a disability can save and spend money, up to limits, while protecting SSI and Medicaid eligibility.
In 2026, eligibility requirements for an ABLE account were updated. Before the change, the disability must have begun before the person’s 26th birthday. With the new change, the disability must have begun before the person’s 46th birthday, but the eligible person may open an account after turning 46. This expands who can take advantage of the ABLE accounts. The Centers for Medicare and Medicaid estimate that nearly 6 million additional Americans qualify who didn’t before this year.
With an ABLE account, you can keep $100,000 within it without compromising the $2,000 SSI resource limit. You can contribute money up to $20,000 per year, which grows tax-free, and even your withdrawals are tax-free as long as you spend them on qualified disability expenses. Contributions from parents and other sources count toward the same annual limit. Eligible employed account owners may qualify to contribute additional earnings under the ABLE-to-Work provision.
Types of qualified disability expenses includes:
- Housing, regardless of whether it’s rent, mortgage, property tax, or utility payments. (Housing withdrawals can interact with SSI’s income and resource rules)
- Food and basic living expenses (must meet applicable rules)
- Transportation, whether it’s public or the purchase of a private vehicle
- Education and job training
- Health care not covered by your insurance policy
- Assistive technology and personal support services
- Financial management and administrative services
- Legal fees
- Funeral and burial expenses
Common ABLE Account Mistakes to Avoid
Using funds for nonqualified expenses. The purchases you make after withdrawing money from an ABLE account must be for qualified expenses. Using that money for something completely unrelated to your disability or health will result in you owing income tax on the earnings plus a 10% penalty. As mentioned earlier, you have to keep your supporting documentation because an audit can happen unexpectedly.
Failing to monitor the account balance. If the account owner receives SSI, it is important to monitor the ABLE account balance and other countable resources. Families should plan ahead for qualified disability expenses and monitor the account regularly. Keep in mind that if your account grows beyond $100,000, only the amount above $100,000 counts as a resource, and SSI payments are suspended if that excess caused the person’s total countable resource to exceed the applicable limit. Medicaid may continue if the person remains otherwise eligible and the excess ABLE balance is the reason for the SSI suspension.
Not keeping supporting documentation. It is very important to keep records of withdrawals and supporting documentation for expenses. If funds are used for a non-qualified expense, the earnings portion of the distribution may be subject to income tax and an additional 10% tax. When in doubt, consult a qualified tax professional before making a withdrawal. Keeping accurate records of contributions, withdrawals, and expenses can also help with future questions about the account.
Overlooking what happens after death. The ABLE account is owned by the person with the disability. The ABLE account owner may be able to designate a successor beneficiary, depending on the program’s rules. However, the remaining funds may be subject to Medicaid estate recovery.
Planning Options
If a family member is thinking of leaving funds to a disabled loved one, they can plan ahead and create a third-party supplemental needs trust within their estate planning. The supplemental needs trust can allow for distributions into an ABLE account, which can give the beneficiary some autonomy without jeopardizing benefits. A trust and an ABLE account serve different purposes. The trust can hold and manage a larger inheritance, whereas the ABLE account can provide a more convenient way to pay for qualified disability expenses.
If a person with a disability receives an inheritance, settlement, or other substantial sum directly, it is important to obtain legal advice before transferring or spending the money. Depending on the circumstances, a first-party special needs trust or pooled trust may be an appropriate planning option.
ABLE accounts can help individuals with disabilities save for the future while maintaining access to important public benefits. The rules governing contributions, withdrawals, SSI and Medicaid eligibility, and Medicaid estate recovery can be complicated.
At Boyer Law Group, we help families explore ABLE accounts, special needs trusts, and other estate planning strategies to protect their loved ones and plan for the future. Contact us to discuss a plan tailored to your family’s needs.
Disclaimer: Information provided as a service of Kim Boyer, Certified Elder Law Attorney, updated as of 11/2/26. It does not constitute legal advice. For specific questions you should consult a qualified attorney.
