What Is An ABLE Account And How Does It Work For Massachusetts Families?

An ABLE account is a tax advantaged savings account that lets a person with a disability save and invest money without losing eligibility for needs based government benefits like Supplemental Security Income or MassHealth. If you have a family member with a disability, you have probably run into the frustrating catch that comes with these benefits: save too much money in the wrong kind of account, and you risk disqualifying them from the very support they rely on. An ABLE account is designed to solve exactly that problem, and recent changes have made it available to far more families than before.

How Do ABLE Accounts Actually Work?

ABLE accounts were created under federal law, specifically Section 529A of the Internal Revenue Code, and they function somewhat like a 529 college savings account, except the funds are earmarked for disability related expenses rather than education. Contributions grow tax free, and withdrawals used for qualified disability expenses, things like housing, transportation, education, and healthcare, are not taxed either. Perhaps most importantly, funds held in an ABLE account are largely disregarded when determining eligibility for SSI and Medicaid, up to a certain threshold, which means a family member can build savings without automatically losing access to benefits that took years to secure.

Who Actually Qualifies for an ABLE Account Now?

This is where the recent changes matter most. For years, ABLE account eligibility was limited to individuals whose disability began before age 26, a cutoff that excluded a large number of people who acquired a disability later in life. As of January 1, 2026, that threshold was raised significantly. Eligibility now extends to anyone whose disability began before age 46, opening the door to millions of additional people nationwide. If you were previously told a family member did not qualify because their disability started too late, it may be worth revisiting that question given how much the rules have shifted.

What Are the Current Contribution Limits and Protections?

Understanding the numbers involved can help you see how an ABLE account might fit into a broader financial plan. Consider the following:

• The annual contribution limit for 2026 is $20,000, though working account holders without an employer sponsored retirement plan may be able to contribute additional earned income on top of that base amount.
• Up to $100,000 held in an ABLE account is generally disregarded when calculating SSI resource limits, meaning it will not count against the usual $2,000 asset cap.
• Anyone can contribute to the account, including parents, grandparents, other family members, or friends, as long as the combined total stays within the annual limit.
• Funds from an existing 529 college savings account can generally be rolled into an ABLE account without triggering taxes or penalties.

Why This Matters for Your Family’s Broader Estate Plan

An ABLE account is a valuable tool, but it rarely stands alone as a complete plan for a loved one with a disability. It works best alongside other planning strategies, such as a special needs trust, which can hold significantly more assets over the long term and coordinate carefully with an ABLE account rather than competing with it. Every family’s situation looks different depending on the nature of the disability, the benefits involved, and what resources are already in place, which is exactly why this kind of planning tends to benefit from a closer look at your specific circumstances rather than a one size fits all approach.

Contact Our Team for Guidance

If you are trying to figure out how an ABLE account fits alongside a special needs trust or your family’s broader estate plan, we would be glad to help you think it through. Our Norwood special needs planning attorneys at Fisher Law, LLC have helped many Massachusetts families put thoughtful, coordinated plans in place for a loved one with a disability. To learn more about how an ABLE account or a special needs trust might work for your family, reach out to Fisher Law, LLC today.

Source:

law.cornell.edu/uscode/text/26/529A