TaxBandits Knowledge Base
Have questions? We've got you covered!What is an ABLE account?
An Achieving a Better Life Experience (ABLE) account is a tax-advantaged savings account in the United States designed to help individuals with disabilities and their families save and pay for disability-related expenses without jeopardizing eligibility for critical public benefits such as Supplemental Security Income (SSI), Medicaid, and other federal programs.
One of the key benefits of an ABLE account is the tax-free growth of earnings on investments. Any interest, dividends, or capital gains generated within the account are not subject to federal taxes. Additionally, withdrawals from the account are tax-free as long as the funds are used to pay for qualified disability expenses (QDEs). These expenses include various costs, such as education, housing, transportation, healthcare, etc.
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