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Millions More Americans Can Now Use ABLE Accounts for Tax-Free Savings
By Adam Hardy MONEY RESEARCH COLLECTIVE
A major rule change expands tax-free ABLE savings accounts to millions more Americans with disabilities.
A once-niche savings account for people with disabilities has just relaxed its eligibility rules, expanding tax-free savings and investing perks to millions more Americans.
As of Jan. 1, tax-advantaged ABLE accounts — named after the 2014 Achieving a Better Life Experience Act — are available to Americans who were diagnosed with a qualifying disability by the age of 46.
Previously, the age threshold was 26, limiting access to the account to 8 million people. Now, about 14 million Americans may qualify for one, according to the National Disability Institute.
The accounts come with a slew of tax benefits for those who qualify. In 2026, the contribution limit is $20,000, plus up to $15,650 extra if you don’t have a 401(k) or other employer-sponsored retirement plan.
Contributions can be invested, and the earnings grow tax-free. Crucially, the value of the account is entirely exempt from the means-testing rules for Medicaid and federal student aid through the FAFSA. For the Supplement Security Income program, up to $100,000 is excluded.
ABLE withdrawals aren’t taxed as long as the money is used on qualifying disability-related expenses, housing, health care, wellness or education. (Withdrawals outside of these categories incur a 10% tax penalty and are taxed as income.)
Despite the benefits, relatively few people who qualify have signed up for one. At the end of September 2025, of the estimated 8 million eligible Americans, only about 223,000 of them opened an ABLE account.
Who qualifies for ABLE accounts?
ABLE accounts are now available to U.S. residents with qualifying disabilities that began before the age of 46, or about 14 million Americans.
The disability must be severe to qualify. If you receive Supplemental Security Income or Social Security Disability Insurance, you’re automatically eligible. Otherwise, the key qualification is a signed eligibility letter from your physician stating that your condition is long-term, “marked and severe.”
Much like 529 college savings plans, ABLE accounts — formally known as 529A plans — are operated at the state level. Currently, 46 states offer ABLE plans, which are administered by partnering banks and investment firms. Idaho, North Dakota, South Dakota and Wisconsin do not offer ABLE accounts. However, many plans accept out-of-state applicants. Eligible applicants can own only one account.
While the core qualifications are the same nationwide, there are some differences among state plans. Namely, the maximum account balance varies by state, usually running between $300,000 and $600,000. The partnering banks and investment firms often vary by state as well, with most states offering between four and eight investment options.
The new age adjustment from 26 to 46 has been a long time coming. After years of pushing from advocates since ABLE’s 2014 inception, the threshold of age 46 was enacted by former President Joe Biden in 2022 as part of a sprawling $1.7 trillion spending package. That legislation also included the SECURE 2.0 retirement-reform bill, as well as changes to ABLE’s sister account — the 529 college savings plan. The ABLE changes did not take effect until this month.
“It’s no exaggeration to say that ABLE is a life-changing savings program,” Pennsylvania Treasurer Stacy Garrit, who oversees the state’s ABLE plans, said at the time. “[A]nd the ABLE Age Adjustment Act will have a huge positive impact.”
“It will help millions of Americans with disabilities, including 1 million veterans,” she added, “by providing financial empowerment and increased independence.”
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Adam Hardy is Money's lead data journalist. He writes news and feature stories aimed at helping everyday people manage their finances. He joined Money full-time in 2021 but has covered personal finance and economic topics since 2018. Previously, he worked for Forbes Advisor, The Penny Hoarder and Creative Loafing. In addition to those outlets, Adam’s work has been featured in a variety of local, national and international publications, including the Asia Times, Business Insider, Las Vegas Review-Journal, Yahoo! Finance, Nasdaq and several others. Adam graduated with a bachelor’s degree from the University of South Florida, where he studied magazine journalism and sociology. As a first-generation college graduate from a low-income, single-parent household, Adam understands firsthand the financial barriers that plague low-income Americans. His reporting aims to illuminate these issues. Since joining Money, Adam has already written over 300 articles, including a cover story on financial surveillance, a profile of Director Rohit Chopra of the Consumer Financial Protection Bureau and an investigation into flexible spending accounts, which found that workers forfeit billions of dollars annually through the workplace plans. He has also led data analysis on some of Money’s marquee rankings, including Best Places to Live, Best Places to Travel and Best Hospitals. He regularly contributes data reporting for Best Colleges, Best Banks and other lists as well. Adam also holds a multimedia storytelling certificate from Poynter’s News University and a data journalism certificate from the Investigative Reporters and Editors (IRE) at the University of Missouri. In 2017, he received an English teaching certification from the University of Cambridge, which he utilized during his time in Seoul, South Korea. There, he taught students of all ages, from 5 to 65, and worked with North Korean refugees who were resettling in the area. Now, Adam lives in Saint Petersburg, Florida, with his pup Bambi. He is a card-carrying shuffleboard club member.