Braxton Taylor
Disabled veterans with “marked and severe” functional limitations may not realize they qualify for tax-free savings or investment accounts — or that many more veterans and others will qualify starting in 2026.
In a webinar in February presented by the Military Officers Association of America, Navy veteran and tax pro Kevin Matthews highlighted ABLE accounts — short for Achieving a Better Life Experience — among the “often overlooked” tax benefits that some veterans and military families may qualify to receive.
ABLE accounts are a way that people with disabilities can save money on taxes, or even invest money for tax-free gains, to help pay for their care. About a million veterans are estimated to currently qualify to open an ABLE account, according to the nonprofit ABLE National Resource Center (NRC), and that number should more than double in 2026.
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For now, a person may open an ABLE account if they became disabled before age 26, meaning not only some veterans may benefit but also military families who have children with special needs, Matthews said.
“This is a great way to have people save money for the benefit of the child, and they can do it in a tax-efficient way that allows them to spend the money to meet [the child’s] needs,” Matthews said.
Here’s what veterans and military families need to know, according to the ABLE NRC:
Who Can Benefit from an ABLE Account?
To qualify during the remainder of 2025 ,a person’s disability must have begun before age 26. On Jan. 1, 2026, the age limit goes up to 46, meaning many more veterans will qualify.
For individuals who receive need-based assistance such as Supplemental Security Income, or SSI, up to $100,000 of funds in an ABLE account won’t count against their qualification to receive the need-based benefit.
Disabled veterans who are in the workforce and/or receive military retirement and, therefore, don’t qualify for SSI can use the accounts to pay for certain expenses with pre-tax income.
Children with disabilities may also have ABLE accounts to which parents or others contribute for their care.
In addition to $100,000 of ABLE funds not counting against eligibility for SSI, no amount of money in an ABLE account will count against:
- Veterans benefits, including the income-limited Veterans Pension
- Social Security Disability Insurance (SSDI)
- Housing assistance received under Housing and Urban Development programs
- Supplemental Nutrition Assistance Program (SNAP)
- Free Application for Federal Student Aid (FAFSA) benefits
- Medicare Parts A, B, C or D and other Medicare programs
- Any Medicaid programs
Do I Qualify for an ABLE Account?
A VA disability rating doesn’t ensure ABLE eligibility, but a disabled veteran may still qualify.
Individuals automatically qualify for an ABLE account who already receive SSI payments or Social Security Disability Insurance benefits.
Those who don’t receive those benefits may ask a doctor to sign a document confirming “marked and severe” functional limitations.
How Do I Sign Up for an ABLE Account?
The states administer ABLE accounts like they do 529 college savings plans. ABLE accounts include savings, checking and investment options. It’s possible to open an account by selecting one option and adding others later.
Individuals may have one ABLE account. They can choose a plan from any state based on costs and features. Choosing the plan in the state where they live may come with additional benefits, such as a state tax deduction, which isn’t guaranteed, so check there first, the ABLE NRC advises.
The ABLE NRC maintains a comparison tool of state plans. States may or may not require applicants to file the documentation proving they qualify.
How Much Can I Contribute to an ABLE Account?
The owner of an ABLE account, friends and family members can contribute to an ABLE account. Funds from a special needs trust or a rollover from a 529 college savings plan also qualify as contributions.
Michael Meese, president of the American Armed Forces Mutual Aid Association, told Military.com that military retirees with incapacitated adult children should make the beneficiary of their Survivor Benefit Plan a special needs trust. A forthcoming article will address that in detail.
The annual maximum contribution to an ABLE account is $19,000, although adults who work but don’t contribute to an employer-sponsored retirement account may contribute an additional $15,060 ($18,810 in Alaska and $17,310 in Hawaii).
Plan limits range from $235,000 to $596,925.
How Can I Use the Money in an ABLE Account?
ABLE account holders can receive distributions at any time for qualified disability expenses (QDEs).
If an expense enhances “the health, independence and quality of life of the account owner,” it’s a QDE, according to the ABLE NRC. Categories of expenses include:
- Education
- Housing
- Transportation
- Employment training and support
- Assistive technology and related services
- Personal support services
- Health
- Financial management
- Legal fees
- Basic living expenses
Matthews’ only criticism of the program was what he considered the low annual contribution limit, because $19,000 in the kind of care covered under the program “is not hard to go through in a year.”
“I’m hoping this goes up,” he said. “It’s a good start, but we can do more on that.”
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