In December 2014, Congress passed the Stephen Beck, Jr. Achieving a Better Life Experience Act of 2014 (ABLE Act). This law, found at Section 529A of the Internal Revenue Code, provides an opportunity for “qualified” individuals with disabilities to have a tax-free savings accounts similar to a 529 college savings plan. Mississippi’s ABLE Account became available in June 2019.  The account will not be counted as the person’s assets for SSI or Medicaid eligibility and may be used to pay for a broad range of goods or services.

Overview

Under the original law, a single ABLE account may be created by or for a person with a disability that began prior to age 26, with annual contributions to such account not to exceed $19,000 (the amount in 2025). If the total amount in the ABLE account stays below $235,000 in Mississippi, the account will not be counted as a resource for Medicaid eligibility. The first $100,000 in an ABLE account will not be counted for SSI eligibility.

2026 Changes

Two recent law changes have expanded eligibility for ABLE accounts. In 2026, these accounts will be available to persons with disabilities that began before age 46. And the limit for annual contributions to ABLE accounts will rise to $20,000 for 2026.

In addition, an ABLE beneficiary who earns income from employment may make additional contributions not to exceed the lesser of their earned income or the Federal Poverty Level ($15,650 in 2026), in addition to their annual contribution limit ($20,000). However, the earnings-into-ABLE provision is unavailable if the beneficiary has actually made contributions to a defined contribution plan (e.g., a 401k, SIMPLE or SEP/IRA), a 403b or a 457 plan. The provision allows the beneficiary of an ABLE account to claim the saver’s credit for contributions made to his or her ABLE account.

For more information about ABLE accounts, click here.