Money held in an ABLE account provides individuals with disabilities a powerful tool to save and manage funds without losing eligibility for vital public benefits like SSI or Medicaid. However, it’s important to understand that there are restrictions on how ABLE funds may be used.
ABLE account funds can only be used for Qualified Disability Expenses (QDEs) – costs that relate to maintaining or improving the health, independence, or quality of life of the account holder. The IRS defines QDEs broadly, covering many everyday needs and services. Examples include:
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Education – tuition, books, or specialized training
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Food and housing – rent, mortgage payments, and groceries
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Transportation – vehicle purchase, maintenance, or public transit
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Employment training and support – job coaching, internships, and employment assistance
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Assistive technology – computers, communication devices, or mobility aids
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Personal support services – caregiving or in-home assistance
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Medical and wellness expenses – healthcare, therapy, or adaptive equipment
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Financial management and administrative services – accounting or investment help
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Legal fees – costs associated with financial or benefits planning
Using ABLE funds for non-qualified expenses can result in tax penalties and may affect eligibility for government benefits. For that reason, it’s essential to keep records and track spending carefully to show that withdrawals are used for qualified purposes.
When used correctly, an ABLE account can be an invaluable way to promote independence, inclusion, and financial security for people with disabilities.
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