Texas ABLE Account: The Complete Guide

Texas ABLE Account Basics

Texas ABLE is the state's official ABLE program. This section covers what the account is, the father who fought to create it, and the seven benefits that make it worth opening.

What is a Texas ABLE account, and how does it work?

A Texas ABLE account is a tax-advantaged savings and investment account for Texans with disabilities. It lets the account holder save money without losing eligibility for means-tested benefits like SSI and Medicaid.

Yes, Texas has its own ABLE program. It's called the Texas ABLE Program, it's currently open for enrollment, and it doesn't accept out-of-state residents (ABLE NRC). The Texas Legislature created it in 2015, and it's administered by the Texas Prepaid Higher Education Tuition Board through the Texas Comptroller of Public Accounts (Texas ABLE).

The federal law behind it. ABLE stands for Achieving a Better Life Experience. The law's full name is the Stephen Beck Jr. Achieving a Better Life Experience Act. Congress created these accounts in 2014 by adding a new section, 529A, to the tax code (IRS final regulations). That's why you'll see them called "529A" or "529 ABLE" accounts. They're loosely modeled on 529 college savings plans but built for disability expenses. The ABLE Act states that its first purpose is to help families save "for the purpose of supporting individuals with disabilities to maintain health, independence, and quality of life."

The law is named for Stephen Beck Jr., a father who fought so his daughter, and families like his, could save for the future. Read his story at the end of this guide.

How it works:

• One beneficiary, one account. The person with the disability owns the account. Each person can have only one ABLE account (The Arc).
• Anyone can contribute. Friends, family, a corporation, a trust, or another legal entity can all add money (Texas ABLE).
• Contributions are capped. Total contributions from all sources can't exceed $20,000 a year, unless the expanded limit for working beneficiaries applies (more in Section 9). New contributions stop once the balance, including earnings, reaches $500,000. It's important to know the account can keep growing past $500,000; it just won't accept new contributions. If the balance falls back below $500,000, you can contribute again (Texas ABLE).
• The money can be invested. Growth is tax-free.
• Withdrawals for qualified disability expenses are tax-free. These cover far more than medical bills (see Section 6).
• It's cheap to start. The minimum to open an account is $50, and later contributions can be as small as $25 (Texas ABLE).

What are the benefits of a Texas ABLE account?

A Texas ABLE account lets you save past SSI's $2,000 limit, keeps Medicaid protected, grows tax-free, and gives the beneficiary control of their own money.

1. You can save more than $2,000 without losing SSI. SSI caps countable resources at $2,000 for an individual, which has historically kept people with disabilities from saving. With ABLE, up to $100,000 of the account balance, including earnings, is excluded from the beneficiary's resources for SSI purposes (Texas ABLE). That means you can save, work, and keep your benefits.

2. Medicaid stays protected. ABLE balances are disregarded for Medicaid eligibility, regardless of size (see Section 5).

3. Tax-free growth and withdrawals. Earnings aren't taxed when the money is spent on qualified disability expenses, so the account grows tax-free. Since Texas has no state income tax, though, you won't get a state deduction for contributions like you would in some other states.

4. Broad spending flexibility. Qualified expenses include housing, transportation, education, technology, and basic living costs, not just medical care.

5. Independence and control. A beneficiary 18 or older can open and manage their own account (TSBVI). For many adults with disabilities, this is the first account that's truly theirs.

6. Extra savings for workers. Employed beneficiaries can contribute some of their wages above the annual limit through ABLE to Work. For Texas residents, that's up to $15,650 more (ABLE NRC). They may also qualify for the Saver's Credit (more on taxes in Section 9).

7. Low cost and easy access. There's no enrollment fee, and you can change investment options up to twice a year. The whole program runs online (Texas ABLE).

Texas ABLE Eligibility Requirements

Eligibility comes down to three things: where you live, when the disability began, and how it's documented. Here's who qualifies, how specific diagnoses are judged, and who can open an account for someone else.

Who qualifies for a Texas ABLE account?

You qualify if you're a Texas resident, your disability began before age 46, and you can prove it through SSI or SSDI, SSA's Compassionate Allowances list, or a physician's written diagnosis. In detail, the three requirements are (Texas ABLE):

1. Be a Texas resident.
2. Have a disability that began before age 46.
3. Prove the disability in one of three ways:
   • SSI or SSDI. They currently receive SSI or SSDI benefits based on blindness or disability, or their SSI was suspended only because of excess income or resources.
   • Physician's diagnosis. A licensed physician has given a written diagnosis of blindness, or of a physical or mental impairment causing marked and severe limitations expected to last at least 12 months or result in death.
   • Compassionate Allowances. They have a condition on the Social Security Administration's Compassionate Allowances list.

What changed in 2026: Until this year, the disability had to begin before age 26. On January 1, 2026, the ABLE Age Adjustment Act raised that to 46. The Arc cites a National Disability Institute projection that about 6 million more people will qualify. The age that matters is when the disability began, not the beneficiary's current age. A 60-year-old whose disability started at 40 qualifies.

What isn't required:

• No income limit. You can open an account with any amount of income.
• No benefits requirement. You don't need to be on benefits to qualify. A physician's diagnosis is enough.
• No paperwork upfront. You don't need to submit your diagnosis documents when enrolling, but you must have them on hand if the program asks (Texas ABLE).

Do autism, ADHD, or other specific diagnoses qualify?

There's no list of approved diagnoses. Eligibility depends on how severely the condition limits daily functioning, not on the diagnosis's name.

The standard. If the beneficiary isn't on SSI or SSDI or the Compassionate Allowances list, the test is whether a physician will certify "marked and severe functional limitations." The same diagnosis can qualify one person and not another, and it's your physician who makes that call.

Autism. Many autistic individuals qualify, especially those whose autism significantly limits communication, social functioning, or self-care. But a diagnosis alone doesn't settle it. The physician must certify that the functional limitations are marked and severe, matching the definition in federal regulations.

ADHD. ADHD by itself qualifies less often. Under SSA's evaluation criteria, it generally needs an extreme limitation in one area of mental functioning, or marked limitations in two. Those areas are:

• Understanding or applying information
• Interacting with others
• Concentrating or maintaining pace
• Managing oneself

ADHD that co-occurs with another condition, such as autism, is more likely to meet the standard.

One important nuance: Under the federal ABLE law, a disability certification for ABLE can't be used to infer eligibility for Social Security, SSI, or Medicaid. Qualifying for ABLE doesn't mean you qualify for benefits, and vice versa.

Can I open an ABLE account for my child or another relative?

Yes, if you're an authorized legal representative (ALR). An eligible adult 18 or older can open their own account. If the beneficiary is under 18, or can't or chooses not to manage the account, an ALR can act for them.

The IRS sets the order of who can serve as ALR (Texas ABLE):

1. An agent under a power of attorney
2. A legal guardian or conservator
3. A spouse
4. A parent
5. A sibling
6. A grandparent
7. An SSA-appointed representative payee

Rules every ALR should know:

• The beneficiary owns the account, even with an ALR named, and only one ALR can be on the account at a time.
• The ALR can't benefit personally. They can't hold any beneficial interest in the funds and can't make gifts to themselves.
• Documentation may be requested. For example, a birth certificate for a parent, or court orders for a guardian. If the program asks, the documents must arrive within 90 days, or the account may be suspended or closed.

Aunts, uncles, cousins, and family friends can't open the account, but anyone can contribute to it.

What happens to the account if the beneficiary is no longer disabled?

The account stays open, but new contributions stop and withdrawals lose their tax-free status until the beneficiary qualifies again. Here's how it works (Texas ABLE):

• Contributions stop. Starting with the first tax year the beneficiary no longer meets the eligibility rules, the program won't accept new contributions.
• Withdrawals lose tax-free status. Spending during ineligibility doesn't count as a qualified disability expense, so the earnings portion of withdrawals is subject to income tax plus a 10% federal penalty.
• Everything resumes if they re-qualify. Contributions are accepted again, and qualifying expenses are tax-free again.
• The family has to report it. The beneficiary or their ALR is responsible for notifying the program of the change.

If you expect the disability to improve or end, think carefully about how much to put in. If the beneficiary no longer meets the disability criteria, the money isn't locked in, but withdrawals no longer qualify. The earnings portion is then taxed plus a 10% penalty.

Opening a Texas ABLE Account

Opening an account takes one online session and $50, and it's done through the state program, not a bank. Here's what to gather, the six steps, and how to reach Texas ABLE for help.

How do I open a Texas ABLE account?

You open a Texas ABLE account online at TexasABLE.org: confirm eligibility, enter the beneficiary's details, choose your investments, and deposit at least $50. There's no application fee, and most families finish in one sitting if they gather this information first.

Before you start, have ready (per Texas ABLE):

• The beneficiary's details: contact information, Social Security or Taxpayer Identification Number, and date of birth.
• Physician details, if certifying by diagnosis: the physician's name and address, the date of diagnosis, and the diagnosis code.
• Your details, if opening as an authorized legal representative: contact information, SSN or TIN, and date of birth.
• Bank routing and account numbers for the opening deposit.

Opening a Texas ABLE account in 6 steps:

1. Confirm eligibility. Texas resident, disability began before age 46, and proof through SSI/SSDI, a physician's diagnosis, or the Compassionate Allowances list.
2. Gather documents. Use the checklist above.
3. Enroll online. Go to TexasABLE.org and certify that you have the eligibility documentation. You don't upload it at this step.
4. Choose investments. Pick from four managed allocation options and an FDIC-insured bank savings option, or split money among them.
5. Fund the account. Deposit at least $50. Later contributions can be as little as $25.
6. Respond to document requests. ALRs may be asked to prove their authority. Documents are due within 90 days.

Optional at enrollment: You can request the Focus Card, a reloadable prepaid Visa debit card issued by U.S. Bank, for paying qualified expenses directly.

Bring in family contributions. After the account is open, the eGift tool lets you email friends and family a link to contribute. Contributions can also come by check, payroll deduction, a 529 rollover, or a transfer from another ABLE program.

Do banks offer ABLE accounts?

Generally, no. ABLE accounts are created under federal law as state-based programs, so you open one through a state program, not at a bank or credit union.

In Texas, that's the Texas ABLE Program, administered by the Texas Prepaid Higher Education Tuition Board through the Texas Comptroller. Orion Advisor Solutions manages it day to day.

Where the confusion comes from: Banks are involved behind the scenes. Texas ABLE's savings option is an FDIC-insured bank account, insured up to $250,000, and U.S. Bank issues its debit card. But you can't open a Texas ABLE account at a U.S. Bank branch, or any other bank.

Can Texans use another state's plan? Texas ABLE only accepts Texas residents, but many other states accept out-of-state residents. See Section 9 for whether that makes sense.

Contributions, Fees, and Growth

Up to $20,000 a year can go into a Texas ABLE account. It costs $42 a year plus small investment fees, and the money can be invested to grow tax-free.

What are the 2026 Texas ABLE account contribution limits?

A Texas ABLE account has a $20,000 annual contribution limit, a $500,000 balance cap, and an extra allowance for working beneficiaries.

The annual limit is shared. $20,000 is the total from everyone: parents, grandparents, the beneficiary, and 529 rollovers combined. It isn't $20,000 per person giving.

What happens if you go over? The Texas ABLE system is designed to reject contributions that would break either limit. If an excess contribution slips through and isn't returned by the beneficiary's tax filing deadline, the beneficiary owes a 6% excise tax on the excess.

It's no longer tied to the gift tax exclusion. Historically, the ABLE limit matched the annual gift tax exclusion. Under the One Big Beautiful Bill Act, the two were decoupled: the 2026 ABLE limit is $20,000, while the gift tax exclusion stays at $19,000.

The limit stayed flat at $14,000 for four years, then has risen every year since 2022.

What fees does Texas ABLE charge?

Texas ABLE charges $3.50 a month ($42 a year) with no enrollment fee, plus asset-based investment fees of 0.25% to 0.60% a year, depending on the option you choose.

Account fees (Texas ABLE fee schedule):

Asset-based fees are charged yearly as a percentage of your balance (Texas ABLE allocation worksheet):

Each fee combines the underlying fund cost, a 0.15% program management fee, and a 0.10% state fee. Note that the more conservative options cost more, because their underlying funds are more expensive.

Watch the $3.50 monthly fee on small balances. On a $1,000 account, $42 a year is a 4.2% drag. Choose e-delivery to avoid the $10 paper fee, and batch withdrawals to stay within the two free ACH transactions each month.

Can a Texas ABLE account be invested, and does it earn interest?

Yes to both. You can choose from four invested options or an FDIC-insured bank savings option, and earnings don't count as income for SSI. Texas ABLE offers five investment options:

• Four managed allocation options: Aggressive, Moderate, Moderately Conservative, and Conservative. These invest in mutual funds holding U.S. and international stocks, bonds, and bank loans.
• One FDIC-insured Bank Savings Account option.

What's inside the managed options. The four allocation options are built from mutual funds investing in U.S. stocks, international stocks, core bonds, and bank loans. The ABLE National Resource Center lists Vanguard, PIMCO, and Eaton Vance as the underlying investment firms. The options differ by mix:

Current returns are posted on Texas ABLE's investment performance page. To see which option fits your risk tolerance, read our guide: How to invest your Texas ABLE account.

How splitting your money between options works. You don't have to pick just one option. Texas ABLE lets you divide your account among any of the five options:

• New contributions: You choose how each deposit is divided among the options, for example 30% to Bank Savings and 70% to Moderate. You can change this split for future contributions at any time.
• Money already in the account: You can move it between options only twice per calendar year, so set your split thoughtfully.
• A useful workaround: Because changing where future deposits go is unlimited, you can often shift your mix without using one of your two yearly changes. Just direct new contributions to whichever option you want to build up.

Example: A family has $15,000 in the account and expects about $3,000 in therapy and equipment costs over the next six months. They keep $3,000 in Bank Savings to cover those bills and invest the other $12,000 in the Moderate option for later. Near-term bills are covered by cash, so a market dip doesn't force them to sell investments at a loss.

Investment earnings don't hurt benefits. SSA excludes ABLE earnings from the beneficiary's income. Growth only counts toward the $100,000 SSI threshold as part of the balance.

A caution on the bank option: Texas ABLE notes that it waives some fees to try to keep the bank option's return from going below 0%, but there's no guarantee, and the $3.50 monthly fee still comes out. Money held only in the bank option can shrink over time.

Is my money safe in a Texas ABLE account?

It depends on where the money sits in the account. Cash in the bank option is FDIC-insured; invested money can go up or down like any investment.

• Bank Savings option: FDIC-insured up to $250,000. This is the only part of the account with a federal guarantee.
• Managed allocation options: Not insured or guaranteed by the FDIC, the State of Texas, or anyone else. Texas ABLE states plainly that you could lose money, including principal.
• The program itself: Texas ABLE is administered by a state board through the Texas Comptroller and managed by Orion Advisor Solutions. Your account belongs to the beneficiary, not the program.
• The Focus Card: Funds loaded on the card are protected against unauthorized transactions if the card is lost or stolen, provided you report it right away.

The bigger risk is usually rules, not markets. Families more often lose value by breaking SSI timing rules or making non-qualified withdrawals than through investment losses. Sections 5 and 6 cover how to avoid both.

How a Texas ABLE Account Affects Government Benefits

An ABLE account is built to protect benefits: SSI ignores the first $100,000, Medicaid ignores the balance entirely, and SNAP, SSDI, and Medicare aren't affected at all.

Does an ABLE account affect SSI?

For most families, no: up to $100,000 is completely protected. SSI normally caps countable resources at $2,000 for an individual. In SSA's own policy manual, the instruction to staff is: "Exclude up to and including $100,000 of the balance of funds in an ABLE account from the resources of the designated beneficiary."

What SSA doesn't count (POMS SI 01130.740):

• Contributions from family and friends are not income to the beneficiary.
• Investment earnings are not income.
• Distributions are never counted as income, whatever they're spent on. SSA treats them as converting a resource from one form to another.

What happens above $100,000. If the excess over $100,000 is what pushes the beneficiary over the resource limit, SSA suspends SSI cash without a time limit. The beneficiary keeps Medicaid, and SSI isn't terminated after 12 months the way it normally would be. Payments resume once the balance drops.

The exception that catches people: If the beneficiary's other resources alone exceed $2,000, the special suspension rule doesn't apply. In SSA's own example, a beneficiary with $101,000 in ABLE and $3,000 in checking loses SSI and Medicaid under normal rules. Keep outside accounts under $2,000.

Three SSI traps to avoid:

1. Housing money kept past the month. A housing withdrawal still unspent on the first of the next month counts as a resource. Pay rent in the same month you withdraw it.
2. Non-qualified withdrawals kept past the month. These also count as resources.
3. The beneficiary's own income. Wages or benefits deposited directly into ABLE still count as income when received. SSA states plainly that direct deposit can't be used to avoid income counting.

Non-housing qualified withdrawals can be held past the month without counting, as long as they stay identifiable and you still intend to use them for a qualified expense.

Does an ABLE account affect Medicaid?

No, regardless of balance. Texas ABLE states that balances are disregarded for Medicaid eligibility, even above $100,000 when SSI cash is suspended. As one law firm guide notes, the practical Medicaid ceiling is the state's account limit ($500,000 in Texas), not a benefits rule.

Two Medicaid cautions:

• Non-qualified withdrawals can be counted as assets and affect Medicaid eligibility (Texas ABLE).
• Medicaid payback at death applies (Section 9).

Does an ABLE account affect SNAP, Medicare, or Social Security (SSDI)?

No. An ABLE account doesn't affect SNAP, Medicare, SSDI, or HUD housing assistance. Here's how each program treats it:

Spending ABLE Money

ABLE money can pay for almost any expense tied to the beneficiary's disability and quality of life, from rent and food to education and health care, as long as you keep records.

What are qualified disability expenses?

Qualified disability expenses (QDEs) are costs related to the beneficiary's disability that maintain or improve their health, independence, or quality of life, including housing, food, transportation, education, and health care. According to Texas ABLE, a QDE must be:

1. Incurred while the beneficiary is eligible
2. Related to the beneficiary's disability
3. For maintaining or improving their health, independence, or quality of life

Federal regulations say the term should be broadly construed to include basic living expenses, not limited to items with medical necessity (26 CFR § 1.529A-2(h)).

QDE categories (SSA POMS):

• Education
• Housing
• Transportation
• Employment training and support
• Assistive technology
• Personal support services
• Health
• Prevention and wellness
• Financial management
• Legal fees
• Account oversight
• Funeral and burial
• Basic living expenses, including food

Keep receipts. Texas ABLE doesn't review or approve withdrawals. Proving the money went to a QDE is between the beneficiary, the IRS, and SSA.

What expenses are not allowed, and what happens if I use the money wrong?

Expenses that don't relate to the beneficiary's disability or well-being, or that mainly benefit someone else, aren't allowed. Misusing the money means income tax plus a 10% penalty on the earnings, and it can count against SSI and Medicaid. Common examples:

• Expenses that mainly benefit someone else. Distributions must be for the beneficiary's benefit (SSA POMS).
• Gifts to the ALR or family members.
• Discretionary spending with no link to the beneficiary's health, independence, or quality of life. SSA's own example is money lost gambling.

Consequences (Texas ABLE):

• Taxes: The earnings portion is subject to federal income tax plus an additional 10% tax. Only earnings are taxed, not contributions.
• Benefits: Unspent non-qualified money counts as a resource for SSI and can affect Medicaid eligibility.

Can I use an ABLE account for…

Yes, for most everyday costs: rent, utilities, a home, clothes, and food all qualify. Travel and entertainment can qualify when they're tied to the beneficiary's well-being.

Can ABLE money pay for a vacation? Maybe. There's no list of approved or banned purchases. Under SSA's ABLE guidance and the federal tax rules for qualified disability expenses, every expense must:

• be incurred while the person is eligible for the account,
• relate to that person's blindness or disability, and
• be for that person's benefit in maintaining or improving their health, independence, or quality of life.

That test is broad. A vacation can qualify if it maintains or improves the health, independence, or quality of life of the person living with a disability. Keep a short note with your receipts explaining how the trip met that test.

How do I withdraw money from an ABLE account?

Log in at TexasABLE.org and withdraw by electronic transfer (3–5 business days), paper check, or the Focus Card. Two electronic withdrawals a month are free. Here's how each method works:

1. Electronic transfer to your bank or directly to a vendor: 3–5 business days. Two per month are free, then $1 each.
2. Paper check: 7–10 business days, $5 each.
3. Focus Card: load the prepaid Visa and spend directly on qualified expenses. Each load counts as an ACH withdrawal, and the card can't be used for cash or ATMs.

Holds: The program may hold withdrawals for 10 business days after a new contribution or address change, or 15 after a change of ALR.

Taxes: You'll get Form 1099-QA each year. Texas ABLE doesn't withhold taxes, so you report any taxable non-qualified withdrawals.

ABLE Account vs. Special Needs Trust

Both protect government benefits, but they work very differently. Here's how they compare on cost, control, limits, and Medicaid payback, and why many families use both.

Which is better: an ABLE account or a special needs trust?

For many families, the answer is both. They solve different problems, and Texas ABLE confirms you can have both.

Payback comparison source: ABLE National Resource Center

The "use both" approach: A third-party SNT holds the family's long-term money with no payback. The trustee feeds the ABLE account up to the annual limit. The beneficiary then uses ABLE funds for rent and everyday expenses without the SSI reductions that trust-paid housing can trigger.

Myths and Facts About Texas ABLE Accounts

Most fears about ABLE accounts come from outdated or misunderstood rules. Here are the six most common myths, and the facts.

Beyond the Basics

These are the rules that matter most for long-term planning: what happens at death, saving more while working, rollovers, using another state's plan, and taxes.

What happens to a Texas ABLE account when the beneficiary dies? (Medicaid payback)

When the beneficiary dies, outstanding qualified expenses, including funeral costs, are paid first. Texas can then reclaim Medicaid costs paid since the account opened, and anything left goes to heirs.

Federal policy requires that, after outstanding qualified expenses are paid, remaining funds reimburse the state for Medicaid benefits received, if the state files a claim.

The order of payment:

1. Outstanding qualified expenses, including funeral and burial. Texas ABLE allows these before Medicaid recovery.
2. Medicaid payback, limited to Medicaid costs incurred after the account was opened, minus Medicaid Buy-In premiums paid (ABLE NRC).
3. Whatever's left passes to heirs.

Texas does pursue payback. The ABLE National Resource Center reports that Texas Medicaid recovers expenses paid while the account was open, including for Texans with accounts in other states. A different state's plan doesn't avoid Texas payback.

Planning tips:

• Prepay funeral arrangements from the ABLE account while the beneficiary is living.
• Spend ABLE money on qualified expenses before spending other resources.
• Hold large family gifts in a third-party SNT, which has no payback.

Naming who receives what's left. In Texas, whatever remains after qualified expenses and Medicaid payback becomes part of the beneficiary's estate (Texas ABLE Program Disclosure Statement). Texas ABLE asks for a copy of the beneficiary's will to make sure the money is distributed according to law (ABLE NRC). In practice:

• The will names the remainder beneficiary. To control who receives the leftover ABLE money, the beneficiary names that person in their will.
• No will means Texas law decides. Without a will, Texas intestacy law sets who inherits, usually a spouse, children, parents, or siblings.
• Legal capacity matters. A beneficiary must have legal capacity to sign a will. If they can't, the family can't name a remainder beneficiary for the ABLE account. Keep larger family gifts in a third-party special needs trust, where the family chooses who receives what's left.
• A sibling can take over the account during life. While the beneficiary is living, the account can be changed to a sibling or stepsibling who is also ABLE-eligible, with no tax (Texas ABLE Program Disclosure Statement).
• Submit final bills quickly. Funeral, burial, and other outstanding qualified expenses must reach Texas ABLE within 90 days of the beneficiary's death to be paid before Medicaid payback.

ABLE to Work: contributing above the $20,000 limit

Working beneficiaries can add up to $15,650 of their own earnings in 2026 on top of the $20,000 limit, as long as they don't contribute to a workplace retirement plan that year.

Working beneficiaries can contribute some of their own earnings on top of the $20,000 limit. Under federal rules summarized by SSA, the extra amount is the lesser of:

• the prior year's federal poverty level for a one-person household ($15,650 for 2026), or
• the beneficiary's earnings for the year.

The catch: It's only available if the beneficiary didn't contribute to a 401(k), 403(b), or 457(b) that year. The One Big Beautiful Bill Act made ABLE to Work permanent; it had been set to expire at the end of 2025.

ABLE to Work in practice:

• Example: A beneficiary earning $12,000 in 2026 with no workplace retirement contributions could have $20,000 contributed from all sources, plus up to $12,000 of their own earnings: $32,000 total. Someone earning $30,000 is capped at the extra $15,650.
• The beneficiary tracks it. The program can't see your paycheck, so the beneficiary is responsible for staying within the expanded limit.
• Wages still count for SSI. Saving paychecks in ABLE protects the balance, but SSA still counts the wages as income in the month earned, even with direct deposit or payroll deduction into ABLE.
• Pair it with the Saver's Credit. The same contributions may qualify for a tax credit (see taxes below).

Can I roll a 529 plan into a Texas ABLE account?

Yes, and the rule is now permanent under the One Big Beautiful Bill Act. Per Texas ABLE:

• The ABLE account must belong to the 529 beneficiary or a family member of the 529 beneficiary.
• The rollover counts toward the $20,000 annual limit, so a large 529 has to move over several years.
• It must be deposited within 60 days of the 529 withdrawal.
• Only one rollover is allowed per 12 months.

This helps families who started a 529 before a diagnosis, or whose child won't use the college savings.

Can I roll a Trump Account into a Texas ABLE account?

Yes, but only once and only in one year: the entire Trump Account must move by direct transfer during the calendar year the child turns 17. Miss that year and the option is gone (IRS Notice 2025-68).

Trump Accounts are tax-advantaged savings accounts for children under 18, created by the One Big Beautiful Bill Act. For a child with a disability, moving the money into an ABLE account before adulthood keeps it usable for disability expenses and protected for SSI. The rules (IRS Notice 2025-68):

• One-year window. The rollover can only happen during the calendar year the child turns 17.
• Direct transfer only. It must be a trustee-to-trustee transfer from the Trump Account to the ABLE account. Don't withdraw the money yourself.
• All or nothing. The entire Trump Account balance must move.
• Doesn't use up the annual limit. The rollover is excluded from the $20,000 annual ABLE contribution limit.
• The child must be ABLE-eligible. The child needs a qualifying disability that began before age 46 and an open ABLE account to receive the money.

Why the deadline matters: After that year, a Trump Account can no longer be rolled into an ABLE account. Once the child turns 18, it's treated much like a traditional IRA.

For a deeper look at the timing and the mistakes to avoid, read our post: The Trump Account trap: what families with a disabled child need to know.

Can I roll over or transfer money between ABLE accounts?

Yes. There are two ways to move ABLE money, and Texas ABLE charges no fee to roll money in or out:

Source: SSA POMS, Texas ABLE

Moving to a sibling's account. Money can roll to an eligible family member's ABLE account. For ABLE, "family member" means a sibling: brother, sister, stepsibling, or half-sibling, by blood, marriage, or adoption. Texas ABLE also allows changing the beneficiary to an eligible family member at no charge.

Remember: you can have only one ABLE account. When moving to another state's program, use a direct transfer and close the old account, so you never hold two at once.

Can Texans use another state's ABLE plan?

Yes. SSA confirms an eligible person can open an account in any state that permits it. Reasons a Texan might look elsewhere: lower fees, different investment choices, or a checking-style account.

What doesn't change:

• No state tax benefit. Texas has no income tax, so there's no deduction to lose by going out of state.
• Texas payback still applies to out-of-state accounts (ABLE NRC).
• One account only. You can still have only one ABLE account.

ABLE accounts and taxes: tax-free growth and the Saver's Credit

Contributions aren't tax-deductible, but earnings grow tax-free and withdrawals for qualified expenses are tax-free. Working beneficiaries may also qualify for a Saver's Credit of up to $1,000.

• Contributions: After-tax dollars. No federal deduction, and Texas has no state income tax (Texas ABLE).
• Growth: Tax-deferred, and tax-free when spent on qualified expenses.
• Saver's Credit: Beneficiaries who contribute to their own accounts may qualify for a non-refundable credit of up to $1,000 (ABLE Today), now permanent. The eligible contribution amount rises from $2,000 to $2,100 in 2027 (Congressional Research Service).
• Gift tax: Third-party contributions are completed gifts for gift tax purposes (SSA POMS).

2026 Saver's Credit income limits (adjusted gross income, Fidelity):

The credit applies to up to $2,000 of contributions per person, for a maximum credit of $1,000. To claim it, the beneficiary must be 18 or older, not a full-time student, and not claimed as a dependent on someone else's return.

How each money movement is taxed:

Source: Texas ABLE

Tax forms you'll receive (Texas ABLE):

• Form 1099-QA: withdrawals for the year, split into earnings and contributions.
• Form 5498-QA: contributions, rollovers, and the account's year-end value.

Texas ABLE doesn't withhold taxes. If a withdrawal is taxable, it's reported on the beneficiary's own return.

A Brief History of ABLE Accounts

ABLE accounts became law in 2014, Texas launched its program in 2015, and in 2026 eligibility expanded to anyone whose disability began before age 46.

Before 2014, a person on SSI could have no more than $2,000 in countable savings. Families were left with two choices: keep their loved one poor on paper, or pay an attorney to set up a special needs trust. ABLE accounts created a third option, and the program has expanded almost every year since.

• 2014: The ABLE Act becomes law. The U.S. House passed the Stephen Beck Jr. ABLE Act on December 3, 2014, and it was signed into law on December 19 as part of the Tax Increase Prevention Act of 2014. It added Section 529A to the tax code and let each state create its own ABLE program.
• 2015: Texas creates its program. The Texas Legislature passed the Texas ABLE Act of 2015, establishing the Texas ABLE Program under the Texas Prepaid Higher Education Tuition Board.
• 2016: The first accounts open. Ohio, Tennessee, and Nebraska launched the first state ABLE programs in June 2016.
• 2018: New ways to save. Following the 2017 Tax Cuts and Jobs Act, working beneficiaries could contribute above the annual limit (ABLE to Work), families could roll 529 college savings into ABLE accounts, and beneficiaries could claim the Saver's Credit on their own contributions.
• 2022: The age limit is set to rise. The SECURE 2.0 Act raised the age-of-onset limit from 26 to 46, effective in 2026.
• 2025: The 2018 changes become permanent. The One Big Beautiful Bill Act, signed July 4, 2025, made ABLE to Work, 529 rollovers, and the Saver's Credit permanent. They had been set to expire at the end of 2025.
• 2026: Millions more qualify. On January 1, 2026, anyone whose disability began before age 46 became eligible, and the annual contribution limit rose to $20,000.

Who was Stephen Beck Jr.?

Stephen Beck Jr. was an incredible father of two daughters whose life's passion was making sure his daughter Natalie had the same opportunities to save as everyone else. Beck and other families fought for a new savings account that would let Americans with disabilities save for their future.

On December 3, 2014, Beck saw the U.S. House of Representatives pass the ABLE Act. He died unexpectedly a few days later and didn't get to see President Obama sign it into law on December 19, 2014 (ABLE Today). Although he didn't see the act become law, his love for his family and his hard work live on through it.

His widow, Catherine, said of the ABLE account: "I think it's a symbol for a father who made a change. A symbol of what our country represents -- that one person can make a difference. It's not so much the Steve Beck Bill, but a father who stood for what they believe should happen in our country." (FOX 5 DC)

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This guide is for educational purposes only and is not legal, tax, or investment advice. Rules and figures are current as of October 2026 and can change. Past performance is not a guarantee of future results. Talk with a qualified professional about your situation.