More Veterans Get Access to ABLE Savings Accounts with Tax Breaks
A change in federal law has opened the door for qualifying disabled veterans to open Achieving a Better Life Experience (ABLE) accounts for people with disabilities. These are tax-advantage type accounts formerly restricted to those whose disabilities began before they turned 26. The new disability age threshold has been raised to age 46.
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More Veterans Get Access to ABLE Savings Accounts with Tax Breaks
An ABLE account is a specialized account designed for people with disabilities and their families. It functions similarly to a 529 college savings plan but covers a much broader range of life expenses.
Contributions are made with post-tax dollars, meaning the money you put in has already been taxed. However, the investments within the account are considered tax-free (at press time). More importantly, withdrawals are also tax-free when used for what the law calls qualified disability expenses.
The primary barrier for veterans has always been the “age of onset.” Many service-connected disabilities, such as those resulting from combat injuries, toxic exposures, or the physical toll of a military career, do not manifest until later in life.
Under the old rules, a veteran who became disabled at age 30 was ineligible for an ABLE account. By raising the age to 46, the ABLE Age Adjustment Act now includes thousands of veterans previously locked out of this benefit.
ABLE Advantages for Veterans
For many veterans, the most compelling reason to open an ABLE account is to protect other benefits. Many government programs have strict asset limits. For instance, Supplemental Security Income typically requires recipients to have less than $2,000 in countable resources.
Up to $100,000 kept in an ABLE account is ignored by the Social Security Administration when determining eligibility for SSI. If your balance exceeds $100,000, your SSI payments may be suspended, but your eligibility for Medicaid remains.
ABLE account funds are generally not counted as assets for VA pension purposes, SNAP, or HUD housing assistance.
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Who Qualifies for ABLE Accounts
To open an account, your disability must have begun before your 46th birthday. Second, the disability must meet the Social Security Administration’s definition of “marked and severe functional limitations” expected to last at least 12 months.
- If you receive Social Security Disability Insurance, you may already be eligible. If you do not receive those benefits, you may qualify by obtaining a signed “disability certification” from a licensed physician. This document must confirm that your condition meets the required severity and started before age 46.
- It is important to note that having a VA disability rating does not automatically grant ABLE eligibility. The VA and the Social Security Administration use different sets of medical criteria. However, veterans with high VA ratings may find they meet the medical threshold.
- This option features a contribution limit. In 2026, that limit was set at $20,000, but this number will vary in successive years.
ABLE savings account funds can come from the veteran, family members, friends, or even an employer. There is no limit on how many people can contribute to a single account, but a veteran can only own one ABLE account.
For veterans who can still work, there is an additional benefit known as “ABLE to Work.” If you are employed and do not participate in an employer-sponsored retirement plan, you may be able to contribute more than the $20,000 limit.
How ABLE Money Can Be Spent
The definition of a “qualified disability expense” is broad. Common examples include:
- Rent, mortgage payments, property taxes, and home modifications for accessibility.
- Buying a car, vehicle repairs, and rideshare services.
- Out-of-pocket medical costs, dental care, vision care, and mental health services not fully covered by the VA.
- Computers, specialized software, and assistive devices.
- Even daily expenses like groceries and clothing can qualify if they relate to the individual’s needs.
ABLE accounts are managed by individual states. You do not have to open an account in your home state; you can shop around for the plan that offers the best investment options or the lowest fees. Most states allow you to open an account online.
When you sign up, you will need your Social Security number and basic personal information. If you are not on SSI or SSDI, you should keep your physician’s disability certification in your own files. You do not usually need to submit it to the state when opening the account, but you must have it ready if the Internal Revenue Service asks for proof of eligibility later.
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About the author
Editor-in-Chief Joe Wallace is a 13-year veteran of the United States Air Force and a former reporter/editor for Air Force Television News and the Pentagon Channel. His freelance work includes contract work for Motorola, VALoans.com, and Credit Karma. He is co-founder of Dim Art House in Springfield, Illinois, and spends his non-writing time as an abstract painter, independent publisher, and occasional filmmaker.
