There are exciting updates for ABLE account holders! Learn what’s been extended and what’s new – including tax credits, rollovers, and expanded eligibility for families.
Full Transcript
Hi, I’m Mike Walter from Oak Wealth Advisors with some 2025 year-end updates regarding ABLE accounts, which have become wonderful planning tools for our clients with loved ones with disabilities.
First, there are a couple of things that the recent legislation extended through the end of 2025 and into future years. The first of which is that if an individual has a college 529 savings plan, they’re able to roll that balance directly into their ABLE account on a tax-free basis and continue to invest and use the monies within the ABLE account on a going-forward basis. The only limit to that is you can only put in the $19,000 a year. So if your 529 plan has more than that, you have to spread those transfers over multiple years.
Second, the ABLE to Work plan has been extended. That’s the plan that allows an individual who’s employed to add their earnings up to $15,060 to their ABLE account in addition to the $19,000 cap from all other sources. So it’s two wonderful additional benefits from new legislation that will be available on an ongoing basis.
Vessels were made permanent in 2025. In addition, new legislation was passed this year that extends the age of onset for accessing the ABLE account. Previously, you had to be aged 26 or younger with your disability diagnosis in order to enable account. Now, anytime up till age 46, you can be diagnosed with disability and use the ABLE account. It’s a wonderful additional benefit to our veterans and other folks who suffer disability injuries that occur after they were 26 years old. That becomes effective on January 1st, and that’s going to help millions of additional people use ABLE accounts for their future benefit.
And then finally, there’s a new Savers Credit. This is an opportunity for the individual to contribute to their ABLE account and then get a tax credit back of between 10 and 50 for a maximum credit value of $1,000. That credit can reduce their taxes but not generate a refund. So again, it’s going to reduce their tax liability, if any, for 2026, but it would not generate a credit if that was the only thing driving their taxes below zero. That’s been available for the 2026 tax year, so that’ll really benefit them when they’re filing their return for 2026 in 2027.
And those are the new elements that have been put through through recent legislation affecting ABLE accounts. If you have any questions about your ABLE planning or any other part of your special needs planning, please reach out to your team at Oakwood Advisors. Also, check us out on the socials. Listen to The Special Needs Voice podcast for some inspirational stories from the disability community. We truly look forward to helping you with all of your planning needs.
With that, we’ll share our disclosures. You can read that as quickly as you can. We appreciate listening to our updates and we look forward to helping you in the future. All the best.
