What are the ABLE account contributions limits for 2023?
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- In 2023, people with disabilities or family members can deposit $17,000 in an ABLE account annually.
- You might be able to contribute more money to an ABLE account if you have a job.
- If you also want to be eligible for SSI, you can only have $2,000 in limited resources.
The amount of money you can contribute to an ABLE account each year is the same as the annual exclusion amount for gift taxes.
For 2023, the Internal Revenue Service has made several inflation adjustments for tax provisions — including gift taxes — which means that the contribution limit for ABLE accounts has also increased. If you have an ABLE account, we'll cover how much money you can save in your account this upcoming year.
How much money can you deposit in an ABLE account in 2023?
People with disabilities and family members will be able to deposit $17,000 in an ABLE account for 2023, a $1,000 increase from the previous year's contribution limit.
If the designated beneficiary of the account has a job and their employer isn't contributing to a retirement plan, they will also be able to contribute an additional amount. You'll be able to deposit an amount that's equal to your annual gross salary or that meets the individual Federal Poverty Level — whichever is less.
The following table provides an overview of the Federal Poverty Level for a one-person household in 2023, according to the IRS:
Location | Poverty Line |
Continental US | $13,590 |
Hawaii | $15,630 |
Alaska | $16,990 |
How much money can you deposit in an ABLE account in 2022?
In 2022, people with disabilities and family members may deposit $16,000 in an ABLE account.
If you have a job and your employer isn't contributing to a retirement plan, you'll also be able to deposit an amount that's equal to your annual gross salary or that meets the individual Federal Poverty Level.
The following table provides an overview of the Federal Poverty Level for a one-person household in 2022, according to the IRS:
Location | Poverty Line |
Continental US | $12,880 |
Hawaii | $14,820 |
Alaska | $16,090 |
What are the advantages of an ABLE account?
Alexandria Dunn, CFP® professional, CTFA, wealth advisor, and partner of Affinia Financial Group, points out that ABLE accounts serve as an important savings option for people with disabilities who still want to be eligible for government assistance. With an ABLE account, Dunn says people with disabilities can save for the future instead of focusing on trying to qualify for benefits
"If you think about it, all of us may have some type of emergency expense that would come up that our monthly expenses would not cover. These individuals were never able to save for emergency savings, let alone a long-term goal, such as retirement," explains Dunn. "With an ABLE account, individuals that had a disability prior to the age of 26 can save more money that's accessible to them."
You'll be able to keep up to $100,000 in an ABLE account, and that won't impact your eligibility to get SSI.
If you own an ABLE account, you will be able to save money for expenses related to your disability. For example, money in your account can go toward transportation costs or a down payment on a home.
What to know if you've met the ABLE account contribution limit but still want to be eligible for SSI
To be eligible for Supplement Security Income (SSI), you must have $2,000 or less in limited resources.
Any of the following may be counted as limited resources, according to the Social Security Administration:
- cash
- bank accounts
- stocks, mutual funds, savings bonds
- cars (if you or a household member have one vehicle, it isn't counted as a limited resource)
- personal property or land (the home where you live and that land it is on does not count, nor is property used for a business)
- life insurance (if your life insurance policy has a face value of $1,500 or less, it isn't counted as a limited resource)
- items that can be turned into cash and used for shelter or food
There are some exceptions that aren't factored into these expenses. You can learn about the exceptions by reading this list from the Social Security Administration.
If you're looking for additional savings options that do not affect SSI eligibility, you might consider a special needs trust or pooled trust. Dunn says parents can set up one of these types of trusts so their children can save for the future.