Comprehensive Guide to ABLE Accounts: Tax-Favored Savings for Disabled Family Members

ARTICLE | July 15, 2024

Authored by Vasquez + Company

The Achieving a Better Life Experience (ABLE) Act of 2014 allows for the establishment of tax-favored accounts to cover the qualified expenses of family members with disabilities. These accounts offer significant tax advantages and are supported by state-run programs. The Tax Cuts and Jobs Act has further increased the annual contribution limits through 2025. Contributions to ABLE accounts are not deductible for federal income tax purposes, but distributions used for qualified disability expenses are tax-free. The article outlines the eligibility criteria, contribution limits, tax treatments, and the importance of proper documentation and financial planning.

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