Millions More Americans Can Now Use ABLE Accounts for Tax-Free Savings

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 account access 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 Supplemental 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, state plans differ. 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 advocacy, the age threshold of 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.”