As of January 1st, the rules for ABLE accounts have become less stringent in a number of ways that will make them more useful for more people with disabilities. But first, a short primer on what ABLE accounts are all about.
A Primer on ABLE Accounts
ABLE accounts are funds that people with disabilities may own and still receive Supplemental Security Income (SSI) and other public benefits. They are not subject to the $2,000 SSI asset limit and payments into ABLE accounts are not counted as income to the beneficiary. Thus, they can be a very useful way to assist people who are receiving benefits and provide considerable flexibility in light of the severe SSI asset limit which has not been adjusted for inflation in decades.
ABLE accounts are often used in conjunction with special needs trusts since they allow the trusts to make distributions directly to the beneficiary without affecting their eligibility for public benefits. This way, they can have some autonomy and control over their spending.
The accounts do come with a few restrictions. They may hold no more than $100,000 and may be funded with no more than $19,000 a year (in 2026), the same amount as the gift tax exclusion. Money in ABLE accounts may only be used for “qualified disability expenses,” but the definition of this term includes pretty much any spending on behalf of the beneficiary. Beneficiaries may have no more than one ABLE account.
Akin to 529 plans for higher education costs, earnings within ABLE accounts and distributions for qualified expenses are not subject to taxation. In Massachusetts, ABLE accounts are administered by Fidelity Investments.
ABLE accounts have just gotten better in three ways:
1. The Age Limit Has Increased to 45
The most significant change is that as of January 1st, anyone who became disabled before age 46 is eligible to open an ABLE account. Up until this year, the age limit was 25. Not only did this arbitrary limit bar many people from using the accounts, but it also caused difficulty for potential beneficiaries who could not produce documentation of having had a disability at a younger age even if they were disabled. The reason Congress imposed an age limit when they created ABLE accounts was that one of the arguments for doing so was that something like 529 plans should be available to younger people who may never go to college due to their disability. But it’s really not clear why there should be any age limit at all.
2. Beneficiaries Who Are Employed May Contribute More
This is a bit complicated, but employment income now may be contributed to an ABLE account up to the lesser of (1) the applicable federal poverty level for a one-person household in the prior year or (2) the beneficiary’s compensation for the year. The federal poverty level in 2025 was $15,650. This is in addition to the permissible $19,000 annual contributions.
3. Rollover of 529 Plan Funds
Funds in 529 accounts can be rolled over into ABLE accounts without being taxed up to the $19,000 annual contribution limit. This had already been in place on a temporary basis, but now it’s permanent.
For more information about ABLE accounts, check out the ABLE National Resource Center.