ABLE Accounts and the Impact of 'Big Beautiful' Changes
In July 2025, the passage of the One Big Beautiful Bill Act (OBBBA) marked a major milestone for the disability community. It secured the future of several key ABLE account provisions that were previously set to expire.
What is an ABLE account?
An ABLE account - short for Achieving a Better Life Experience - is a savings account that allows individuals with disabilities to set aside funds for qualified expenses without affecting their eligibility for means-tested benefits.
To qualify, the individual must have a disability that begun before age 26 (changing to age 46 effective January 1, 2026). The account can be used for a wide range of expenses, including:
Housing
Education
Transportation
Healthcare
Employment support
Assistive technology
Funds in an ABLE account grow tax-free, and contributions can be made by the beneficiary, family members, friends, or even through rollovers from other accounts like 529 plans. And like those college savings plans, ABLE account holders typically have a range of options for investing their funds.
Contribution limits and benefit protections
For 2025, the annual contribution limit for ABLE accounts is $19,000, with an additional $15,060 allowed for employed beneficiaries who do not participate in a workplace retirement plan.
States set their own maximum account limits, ranging from $235,000 to $596,925. Money from the beneficiary's special-needs trust moved into their ABLE account will have no tax consequences, while staying within the ABLE annual contribution limit. (Related: What are special needs trust?)
Importantly, up to $100,000 in ABLE savings is excluded from SSI resource calculations. If the account exceeds this threshold, SSI benefits may be suspended - but unaffected Medicaid eligibility remains unaffected, even if SSI is paused.
This is where the ability to move money between a special-needs trust and an ABLE account is critical. It allows ABLE account owners on SSI to move money to their special needs trust to stay under the $100,000 threshold to avoid having their SSI suspended. Conversely, money may be moved from a special-needs trust to an ABLE account to take advantage of the ABLE account's flexibility for qualified disability expenses, such as housing, without affecting SSI benefits.
Additional resources for understanding ABLE accounts can be found at ABLE National Resource Center and ABLE today.
The new lifeline for ABLE accounts
The latest enhancements to ABLE accounts were originally outlined in the ENABLE Act, a standalone bill. Those provisions were incorporated into the OBBBA and signed into law on July 4, 2025.
Passage of the new law made permanent several provisions that were previously temporary, ensuring long-term stability for ABLE account holders.
ABLE to Work
ABLE Saver's Credit
529-to-ABLE Rollovers
Looking ahead: Planning with confidence
With the ENABLE Act now permanently embedded in federal law, ABLE accounts are more powerful than ever. Disability advocates and families should revisit their planning strategies to take full advantage of these updates.
Key takeaways to consider:
ABLE accounts offer tax-free savings for disability-related expenses.
Contributions up to $19,000 annually (plus $15,060 for employed beneficiaries) are allowed in 2025.
SSI is unaffected up to $100,000 in ABLE savings, Medicaid remains unaffected regardless of balance.
The OBBBA makes permanent the ABLE to Work provision, Saver's Credit, and 529- to-ABLE rollovers.
As the landscape of disability financial planning evolves, ABLE accounts remain a cornerstone of independence, dignity, and opportunity.
This document is designed for general information only. The information presented in this document should not be construed to be formal legal or tax advice nor the formation of a lawyer/client.
For further information please contact me at www.kmckernanlaw.com kevin@kmckernan.com or 718-317-5007.