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More Disabled Veterans Eligible for Tax-Free ABLE Accounts

Andrew Freeze

Military veteran who uses a wheelchair poses in front of American flag.Takeaways

  • Achieving a Better Life Experience (ABLE) accounts offer tax-free growth and tax-free withdrawals for qualified disability expenses such as housing and health care.
  • As of January 1, 2026, more veterans can qualify for ABLE accounts because the disability onset age has increased from 26 to 46.
  • Up to $100,000 in an ABLE account generally won’t count toward the Supplemental Security Income (SSI) $2,000 resource limit.
  • Eligibility is based on when the disability began — not when it was diagnosed — which can help veterans with later-diagnosed service-connected conditions.

A long-overdue change by the federal government now makes roughly 1 million more veterans eligible for tax-advantaged savings accounts, but many don’t know they qualify.

For years, one of the most useful financial tools available to people with disabilities was largely out of reach of veterans. The reason was simple and frustrating: eligibility rules ignored the reality of military service. That has changed. As of January 1, 2026, a new federal rule is in effect and if you are a veteran with a disability, it is worth understanding what it means for you.

What Is an ABLE Account?

Created by federal law in 2014, Achieving a Better Life Experience (ABLE) accounts are tax-advantaged savings accounts designed for individuals with disabilities. Money saved in an ABLE account grows tax-free, and withdrawals for qualified disability expenses are also tax-free. Qualified expenses include housing, transportation, health care, assistive technology, employment support, and more – costs that can directly improve quality of life.

Perhaps most importantly, ABLE account balances, up to $100,000, are not counted against the $2,000 asset limit that would otherwise disqualify a person from Supplemental Security Income (SSI), a federal assistance program for people with limited income and resources. This means veterans can build real savings without risking their federal benefits.

Why the Old Rule Left Veterans Behind

Under the original ABLE Act, a person could only open an account if their disability began before age 26. That cutoff made sense for people with congenital conditions or childhood disabilities, but it was poorly matched to the experience of most veterans.

Many service-connected disabilities develop during or after active duty, often when a person is in their late 20s, 30s, or 40s. Combat injuries, traumatic brain injury, PTSD, and other conditions frequently emerge or worsen well after age 26. As a result, millions of disabled veterans could not qualify for accounts that were designed to help people in their situation.

What Changed on January 1, 2026

The ABLE Age Adjustment Act, passed as part of the federal SECURE 2.0 Act in December 2022, raised the disability onset age from 26 to 46, effective January 1, 2026. The change opens eligibility to approximately 6 million additional people across the United States, including an estimated 1 million more veterans.

In addition to the age adjustment, the annual contribution limit increased to $20,000 as of 2026. Anyone can contribute to an ABLE account, including family members, friends, and employers. There are also no income limits imposed on those who want to open accounts. Working veterans who don’t participate in an employer-sponsored retirement plan may be able to contribute even more under the ABLE to Work Act.

Who Is Eligible for an ABLE Account

To be eligible for an ABLE account, you must meet two criteria:

  • Disability onset. Your disability must have begun before age 46. Note that eligibility is based on when the disability began, not when it was officially diagnosed. This distinction can be especially pertinent for veterans, since a condition may have developed during service but well before a diagnosis was made.
  • Severity. The disability must be severe enough to meet the Social Security Administration’s definition, meaning it results in marked functional limitations expected to last at least 12 months. Veterans receiving VA disability compensation, SSI, or Social Security Disability Insurance (SSDI) may already meet this threshold.

If you do not receive SSI or SSDI, you may still qualify. You may need a physician to complete a disability certification confirming that your disability began before age 46 and meets the severity standard.

How to Open an ABLE Account

ABLE accounts are administered at the state level, but you do not have to use your home state’s plan. You can choose any state program that accepts out-of-state applicants. Be sure to compare options, since plans differ in fees, investment choices, and features. To get started:

  • Visit ABLE National Resource Center to compare state plans and find one that fits your needs.
  • Gather your Social Security number, date of birth, mailing address, primary disability type, and information about any Social Security benefits you receive.
  • If you need a disability certification, ask your treating physician or VA provider to complete one.
  • Enroll online. Most plans allow you to complete the application through their website.

The Bottom Line

ABLE accounts, which have long been underutilized, offer a meaningful combination of tax savings, financial flexibility, and protection for government benefits, without income limits or employment restrictions.

If you are a veteran with a disability that began before your 46th birthday, consider opening an ABLE account. The accounts are free to explore, the application process is straightforward, and the financial benefits can be substantial.

For additional reading on topics of interest to service members, check out the following articles:

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Andrew Freeze

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