On July 4, 2025, Congress passed the One Big Beautiful Bill Act (OBBBA), a wide-ranging reform package that reshaped federal tax and transfer laws. While much of the public discussion has centered on changes to estate and gift taxation, the legislation also introduced important updates to ABLE accounts. For individuals with disabilities in Florida and their families, these provisions can significantly alter how ABLE accounts are opened, funded, and managed. To provide clarity, the Vero Beach attorneys at Kulas Crawford & Smith explain what ABLE accounts are, why they are important, and the specific ways the OBBBA reshapes them.
What Is an ABLE Account?
An Achieving a Better Life Experience (ABLE) account is a tax-favored savings tool created to help individuals living with disabilities. Established under federal law in 2014, these accounts allow beneficiaries and their families to set aside funds for disability-related costs while preserving eligibility for critical public benefits such as Medicaid and Supplemental Security Income (SSI). The key advantage is that qualified withdrawals do not count against the resource limits for government programs. As long as distributions are used for approved expenses and spent within the proper time frame, they do not interfere with access to government benefits.
Qualified Disability Expenses (QDEs)
The Internal Revenue Service (IRS) defines Qualified Disability Expenses in broad terms to reflect the diverse needs of people with disabilities. These expenditures are intended to improve health, independence, and quality of life. Examples include:
- Education: Tuition, specialized training, books, and assistive learning tools.
- Health Care: Physician visits, therapy, prescription medications, and mental health treatment.
- Support Services: Mobility aids, personal care attendants, or respite care.
- Employment Needs: Coaching, adaptive equipment, or job training programs.
- Housing: Rent, mortgage payments, utilities, or home modifications.
- Transportation: Public transit passes or wheelchair-accessible vehicles.
- Professional Assistance: Legal or financial services tied to disability planning.
Key Changes Under the OBBBA
The OBBBA builds upon earlier measures, such as the ABLE Age Adjustment Act, and represents one of the most substantial overhauls of disability savings law in decades. For Floridians, these revisions expand access to ABLE accounts and provide new tax benefits. The most notable changes include:
- Permanent ABLE-to-Work Provision: Working beneficiaries previously had temporary permission to make additional deposits beyond the standard annual limit through the ABLE-to-Work program. That rule was set to expire, but the OBBBA makes it permanent. For 2025, the annual contribution limit remains $19,000. Under the revised law, an employed beneficiary may also contribute an additional amount equal to their wages or the federal poverty level, whichever is less, so long as they are not contributing to an employer-sponsored retirement plan. For Florida residents with disabilities, this means a long-term ability to increase savings without losing benefits.
- Permanent 529 Plan Rollovers: Families often save for higher education through 529 plans. If the designated student does not use all those funds, choices were previously limited. The OBBBA now permanently allows tax-free transfers from a 529 plan into an ABLE account. This ensures that money originally saved for school can still support a family member with disabilities, making planning more flexible for Florida households.
- Eligibility for the Saver’s Credit: Another major change involves the federal Saver’s Credit, which provides a tax break for lower- and middle-income savers. Contributions to ABLE accounts are now eligible. Beginning in 2027, the maximum qualifying contribution increases to $2,100, and the maximum credit rises to $1,050. This adjustment allows Florida families to receive both tax-free growth inside the ABLE account and a direct tax credit that lowers their annual tax bill.
- Expanded Age of Onset for Eligibility: One of the most transformative provisions relates to eligibility. Until now, only individuals whose disability began before age 26 could open an ABLE account. Effective January 1, 2026, the threshold increases to age 46. This expansion dramatically increases access, allowing many adults who develop disabilities later in life, whether from chronic illness, injury, or mental health conditions, to qualify. For Floridians who previously did not meet the age requirement, this change provides long-awaited access to a powerful planning tool.
Why These Updates Matter for Florida Families
The OBBBA’s changes go beyond technical details. They represent meaningful opportunities for families of individuals with disabilities in Florida. With the state’s large population of retirees and veterans, many adults acquire disabilities later in life. The increased onset age ensures they are no longer excluded. In addition, families in Florida’s diverse communities can benefit from the ability to move unused education savings into an ABLE account, as well as from the enhanced tax incentives provided through the Saver’s Credit. The ability to save more, while still preserving eligibility for Medicaid and SSI, is especially valuable in Florida, where access to disability services can vary by region. Whether funds are used for medical care, transportation, housing, or support services, the expanded rules make it easier to plan for both immediate and long-term needs.
Despite these advancements, ABLE accounts are not a complete solution on their own. Contribution limits remain in place, and balances that exceed certain thresholds may affect SSI eligibility. For larger sums or more complex planning, a special needs trust may still be necessary to ensure benefits are protected.
Do You Have Questions about How the OBBBA Impacts Your Florida ABLE Account?
To learn more, please join us for an upcoming FREE seminar. If you have additional questions or concerns about how the OBBBA impacts your Florida ABLE account, please contact an experienced Port St. Lucie estate planning attorney at Kulas Crawford & Smith by calling (772) 398-0720 to schedule a consultation.
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