With the signing of the One Big Beautiful Bill Act, some significant changes are coming to ABLE accounts for disabled beneficiaries. Here's what you need to know.
A Quick Refresher: What Is an ABLE Account?
An ABLE account is a tax-advantaged savings account for individuals with disabilities. It allows people with disabilities to set aside money without risking the loss of means-tested federal or state benefits.
It's also tax-advantaged in the traditional sense: growth inside the account is tax-deferred, and withdrawals used for qualified disability expenses come out completely tax-free.
If you have a disability, or a loved one does, it's a powerful tool. Here's some of the biggest changes to these accounts brought by the OBBBA in July 4th 2025.
1. The ABLE to Work Provision Is Now Permanent
The ABLE to Work provision encourages people with disabilities to work in whatever limited capacity is available to them, by letting them contribute their own earnings to their ABLE account without jeopardizing means-tested benefits.
Normally, ABLE account contributions are capped at the annual federal gift tax exclusion — $19,000 for 2026. But if you're working, you can contribute additional amounts on top of that $19,000 limit.
This provision was set to expire, but the One Big Beautiful Bill Act made it permanent.
2. 529-to-ABLE Rollovers Are Now Permanent
A 529 account is a tax-advantaged college savings account — funds used for qualified college expenses come out tax-free. If a 529 beneficiary is disabled and either won't be attending college or has leftover funds after college, those dollars can be rolled over into an ABLE account instead of sitting locked up in the 529.
This rollover option, like several of these provisions, was originally established by the Tax Cuts and Jobs Act of 2017 and was set to sunset. The One Big Beautiful Bill Act made it permanent.
Whether a rollover actually makes sense for your situation is a separate question — it depends heavily on your circumstances, and it isn't always the right move. That's a topic for its own video and post down the road.
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3. ABLE Accounts Now Qualify for the Saver's Credit — Permanently
The Saver's Credit is available to lower-income families who contribute to a qualified retirement account like a 401(k) or an IRA — a credit on your tax return that offsets some of the cost of saving.
ABLE accounts now qualify as a recognized retirement savings account for purposes of this credit, alongside 401(k)s and IRAs. If you're contributing to an ABLE account, you may now be eligible for that credit as well.
A Related Change: SECURE 2.0 Raises the Age of Eligibility
Separately from the One Big Beautiful Bill Act, SECURE Act 2.0 took effect recently in 2026 and changed the age-of-onset rule for ABLE account eligibility. Previously, a disability had to have occurred before age 26 to qualify. That threshold has now been extended to age 46.
This is a significant expansion — it opens ABLE accounts up to millions more Americans, including many veterans with disabilities acquired later in life.
The Bottom Line
ABLE accounts are still relatively new — they were established in 2014 — and the rules continue to evolve with regular updates and tweaks. These are some of the biggest changes so far, but it's worth staying alert for more.
As always, this isn't personalized advice. Work with a qualified financial planner or advisor to figure out how these changes apply to your specific situation.
If you have questions about how these updates might affect your family's planning, visit Hamilton Financial Planning's website and schedule a quick call.
Thanks for reading.