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Frequently Asked Questions

General questions about ABLE accounts, how they work, and how your savings can be used.

An ABLE Account is a tax-advantaged account that people with disabilities and their families can open to save, invest, and spend their money for expenses related to living with a disability. ABLE Accounts allow individuals to build savings while preserving benefits, such as SSI, Medicaid, HUD and others, and are an alternative or add-on to a special needs trust.

ABLE Accounts and Special Needs Trusts both offer certain financial solutions for people with disabilities, and both provide a way for people with disabilities to save money in a tax-advantaged way without jeopardizing eligibility for various public programs. Yet, ABLE Accounts and Special Needs Trusts differ in a number of important ways. For example, ABLE Accounts have an annual contribution limit while Special Needs Trusts do not. ABLE Accounts can be managed by the Account Owner, but Special Needs Trusts are administered by appointed trustees. ABLE Accounts generally allow for easier access to funds than Special Needs Trusts. In addition, funds in an ABLE Account can be used to cover housing expenses without affecting SSI, while using funds from a Special Needs Trust for housing could impact SSI benefits. ABLE Accounts are generally lower in cost to open and manage than a Special Needs Trust. A person with disabilities usually is not limited to choosing one or the other and maintaining both an ABLE Account and a Special Needs Trust might be desirable. Individual circumstances vary; consultation with a financial advisor should be sought when choosing among ABLE Account and Special Needs Trust opportunities to manage personal financial goals.

Generally, the earnings on your ABLE Account investments will not be subject to federal income tax as long as funds withdrawn from the Account are used for Qualified Disability Expenses. The same holds true for state income taxes in Louisiana, as generally the earnings portions of distributions from your ABLE Account used for Qualified Disability Expenses also will not be subject to Louisiana adjusted gross income tax. In addition, an individual who is an Louisiana taxpayer may receive a tax credit against Louisiana adjusted gross income tax for contributions made to an LA ABLE Account. For information related to Louisiana tax credit, refer to FAQ, “Are contributions to my ABLE Account deductible on may state income tax return?” The tax consequences from transactions involving an ABLE Account can be complicated, and individuals contributing to or benefiting from ABLE Accounts are encouraged to consult their tax advisors regarding their individual circumstances.

No. An Account Owner is limited to one ABLE Account, except in the case of an Indirect Rollover or a Direct Rollover from another ABLE account.

In the case of Indirect Rollovers and Direct Rollovers to and from the same ABLE Account Owner, the entire balance of the ABLE account must be transferred. For Indirect Rollovers, the ABLE account from which the funds are withdrawn must be closed within 60 days of the withdrawal and for Direct Rollovers, the ABLE account from which the funds are withdrawn must be closed upon completion of the Direct Rollover.

  • SSI disregards ABLE Account balances when determining benefits, except in 2 situations:
    1. When ABLE Account balances exceed $100,000; and
    2. When you withdraw funds for housing expenses and the funds are not used in the same calendar month as the withdrawal and/or Non-Qualified Withdrawals.
  • Medicaid disregards ABLE Account balances when determining Medical Assistance (Medicaid) eligibility.
  • SNAP (Supplemental Nutrition Assistance Program) disregards ABLE Account balances when determining SNAP eligibility.
  • HUD (US Department of Housing and Urban Development) disregards amounts in an ABLE Account for the purpose of determining eligibility and continued occupancy.
  • Assets in an ABLE Account are not considered resources for purposes of means-tested state benefits, and distributions for Qualified Disability Expenses are not considered income for Louisiana state benefits eligibility programs that limit eligibility based on income.
  • The Louisiana Family & Social Services Administration (FSSA), through its Estate Recovery Program, may make a claim against an ABLE Account after an Account Owner’s death to recover certain medical assistance paid under Medicaid. For more information, go to https://www.in.gov/fssa.