The Securities and Exchange Commission issued a bulletin this week (Updated Investor Bulletin: An Introduction to ABLE Accounts | Investor.gov) providing information on ABLE accounts including the changes made by H.R. 1. An Achieving a Better Life Experience (ABLE) account provides a tax-advantaged method to save for qualified disability expenses. Contributions are not tax deductible for federal income tax purposes, but investments can grow tax free and remain so when withdrawn and used for qualified disability expenses. Qualified disability expenses are expenses used to maintain or improve the account owner’s “health, independence, or quality of life.” Qualified disability expenses are broadly defined and may include expenses related to education, food, housing, transportation, employment training and support, assistive technology, personal support services, health care expenses, financial management, administrative services and other expenses.

An eligible individual who is 18 years or older may open an ABLE account or select someone to assist them in opening the account. If an eligible individual is a minor or an adult without the legal capacity to enter into contracts, the ABLE account may be opened by one of the following individuals in order of priority:1. Agent under power of attorney; 2. Legal guardian or conservator; 3. Spouse; 4. Parent; 5. Sibling; 6. Grandparent; or 7. Representative payee.

Like 529 college-savings plans, ABLE programs are administered by states. Most states have established ABLE programs, and many ABLE programs are open to both in-state residents and out-of-state residents.

As with most 529 plans, an account owner can typically choose among several investment options, which may include mutual funds and money market funds.

As of January 1, 2026, new tax laws made permanent the following changes to ABLE accounts:

1. The ABLE to Work provision for ABLE accounts allows eligible employed ABLE account owners to contribute above the annual contribution limits.
2. Savings in a 529 account may be rolled over into an ABLE account subject to the annual contribution limit.  The 529 account must be for the same beneficiary as the ABLE account or for a member of the same family as the ABLE account owner.
3. ABLE account owners who deposit employment income into their ABLE account may be eligible for a Federal Saver’s Credit. For additional information on this credit please consult a tax professional or carefully review information about the credit on the Internal Revenue Service’s website.  

NAIFA Staff Contact: Jayne Fitzgerald – Director – Government Relations, at jfitzgerald@naifa.org.