ABLE Accounts Enhanced by the One Big Beautiful Bill Act

By: Anthony J. Enea, Esq.

As a result of the enactment of the One Big Beautiful Bill Act (OBBBA) on July 4, 2025, and the ABLE Age Adjustment Act of 2022, ABLE (Achieving a Better Life Experience) accounts for those with disabilities will be enhanced and available for a larger pool of disabled persons starting January 1, 2026.

The ABLE Age Adjustment Act, which was enacted as part of the Consolidated Appropriations Act of 2023, will allow those diagnosed with disabilities before the age of forty-six (46)—increased from the prior onset age of twenty-six (26)—to use an ABLE account. This will expand the pool of individuals potentially eligible to use ABLE accounts by millions in the new year.

Additionally, on January 1, 2026, the contribution limit that was based on the current gift tax exclusion amount of $19,000 per year for 2025 will be increased to the lesser of either (a) the beneficiary’s compensation for the year, or (b) the applicable federal poverty level for a one-person household in the year prior to the contribution. The inflation adjustment for the limit base amount is also extended for an additional year of inflation commencing on January 1, 2026.

Furthermore, beginning January 1, 2026, those making qualified contributions to their ABLE account will permanently qualify for a non-refundable Saver’s Credit. This provides the disabled person who is making the contribution with a tax credit. The more that one saves in an ABLE account, the larger the credit they receive toward any federal income tax liability.

In 2027, the Saver’s Credit will increase from $2,000 to $2,100, with a maximum credit of $1,050 as determined by the Adjusted Gross Income (AGI) of the individual.

Finally, effective in 2026, assets from a 529 education savings account can be rolled over tax-free into an ABLE account for the 529’s designated beneficiary or qualified family member so long as the amount within the account is not greater than $19,000 for 2025 or the larger permitted amount for 2026.

These enhancements should make ABLE accounts a much more desired planning tool for people with disabilities.

Anthony J. Enea is the managing attorney of Enea, Scanlan and Sirignano, LLP of White Plains, and Somers New York. He focuses his practice on Wills, Trusts, Estates and Elder Law. Anthony is the Past Chair of the Elder Law and Special Needs Section of the New York State Bar Association (NYSBA) and is the past Chair of the 50+ Section of the NYSBA. He is a Past President and Founding member of the New York Chapter of the National Academy of Elder Law Attorneys (NAELA). Anthony is also a Past President of the Westchester County Bar Foundation and a Past President of the Westchester County Bar Association. He is fluent in Italian. He can be reached at 914-948-1500 or at [email protected]