ABLE Accounts: What’s New for 2025

ABLE Accounts Offer Tax Advantages for People with Disabilities in 2025

People with disabilities and their families can take advantage of Achieving a Better Life Experience (ABLE) accounts to save money for disability-related expenses without affecting eligibility for government assistance. These tax-advantaged accounts come with important updates for 2025.

2025 Contribution Limits

The standard contribution limit for ABLE accounts in 2025 is $19,000.

Employed ABLE account beneficiaries may also contribute more up to the amount of their compensation for the year, or:

$15,650 for residents of the continental U.S.
$19,550 in Alaska
$17,990 in Hawaii

Claiming the Saver’s Credit

ABLE beneficiaries who meet certain conditions may qualify for the Saver’s Credit, a non-refundable tax credit based on contributions to the account.

To qualify, the beneficiary must:

Be at least 18 years old
Not be claimed as a dependent
Not be a full-time student
Meet income requirements

This credit is claimed using Form 8880, Credit for Qualified Retirement Savings Contributions.

Rollovers from 529 Plans

Families can roll over funds from a 529 college savings plan to an ABLE account, as long as both accounts share the same beneficiary or are for eligible family members.

Rollovers count toward the annual contribution limit. For example, if the limit is $19,000 and $8,000 is rolled over from a 529 plan, only $11,000 in new contributions can be made that year.

Qualified Disability Expenses

ABLE accounts can be used for a wide range of qualified disability expenses, including education, housing, transportation, and medical care.

While contributions are not deductible for federal tax purposes, earnings and distributions are tax-free if used for qualified expenses. For a full list, see IRS Publication 907.

Need More Info?

Helpful IRS forms and instructions include:

Form 1099-QA: Reports ABLE account distributions
Form 5498-QA: Reports contributions to ABLE accounts
Instructions for Forms 1099-QA and 5498-QA

ABLE accounts are a powerful tool for financial independence, be sure to take advantage of the benefits available to you in 2025.

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