By Rob Wrubel, CFP ^®

ABLE accounts felt like a gift when they were put into place by Congress in 2014. For the first time, a person receiving SSI could have an account above the allowable resource limit (of $2,000), get tax advantages on that money and not lose their benefits. A huge win for people with disabilities and their families.

Modeled loosely after 529 college savings accounts, ABLE accounts allow individuals to have an account with up to $100,000 without affecting eligibility for SSI, Medicaid, and other means-tested programs. They offer:

• Tax-free growth on investments
• Tax-free withdrawals for qualified disability expenses
• Exemption from asset limits for SSI (up to $100,000) and Medicaid

Last month, a new tax bill was signed into law and important and helpful updates came to the original ABLE act and accounts. Some of the updates go into effect this year and others come in 2026 and 2027.

2025 updates: Savings and rollover protections

• The ABLE-to-Work provision, which under the Tax Cuts and Jobs Act of 2017 had been slated to expire at the end of 2025, is now permanent. This provision allows employed individuals with disabilities to contribute additional income to their ABLE accounts beyond the $19,000 annual limit (up to the federal poverty level or their earnings for the year, whichever is less) if they are not contributing to a defined contribution retirement plan.
• Tax-free rollovers from 529 college savings plans into ABLE accounts are now permanent as well, providing more flexibility if education plans are no longer needed. Make sure to check that your state allows for these without tax issues.
• ABLE account contributions are now eligible for the Saver’s Credit, a tax credit that helps lower-income workers save for the future. This benefit applies immediately and becomes even more generous starting in 2027.

2026: Millions More Qualify for ABLE Accounts

Starting January 1, 2026, the ABLE Age Adjustment Act dramatically expands who is eligible to open an ABLE account.

• Previously, only individuals who acquired their disability before age 26 could qualify.
• Under the new law, the cutoff age increases to 46, opening the door for millions of additional people with disabilities to access ABLE accounts.

Expanded eligibility is a game-changer for adults who may have developed disabilities later in life — including those with mental health conditions, chronic illnesses, or injuries acquired in adulthood — and may have previously been excluded from ABLE account benefits. As 2026 approaches, and the law takes effect, it’s worth revisiting eligibility.

2027: A More Generous Saver’s Credit

In 2027, the Saver’s Credit gets an upgrade that can help contributors save more.

• The maximum contribution eligible for the credit increases to $2,100.
• The maximum credit amount increases to $1,050. ABLE savers can receive a tax credit up to this amount each year just for contributing to their account, an incentive designed to reward long-term saving and financial independence.

Even better, these 2027 changes stack on top of the ABLE-to-Work and 529 rollover provisions already in place.

Rules and contribution limits may vary slightly by state, so it’s important to work with a professional familiar with your state’s ABLE account program.

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This article is not intended as investment advice or representative of any specific investment strategy. Consult with your legal, tax, benefits and investment team before taking any action.