IRS raises ABLE account contribution limit to $19,000 for 2025

From Disability Scoop — By Michelle Diament — 

Starting this month, individuals with disabilities can accrue more money than ever before in a special ABLE account that allows people to save without jeopardizing access to Medicaid and other government benefits.

Contributions to ABLE accounts can total up to $19,000 for 2025. That’s an increase from $18,000 last year.

The change comes after the Internal Revenue Service raised the federal gift tax limit. Since the cap on annual deposits for ABLE accounts is tied to that figure, it will grow too.

ABLE accounts were established under a federal law a decade ago, offering people with disabilities the opportunity to save up to $100,000 without sacrificing eligibility for Social Security and other government benefits. Medicaid can be retained no matter how much is in the accounts.

Money saved in the accounts can be used to pay for qualified disability expenses including education, health care, transportation and housing. Interest earned is tax-free.

While annual ABLE account deposits are typically maxed at the gift tax limit, there is one exception. Individuals with disabilities who are employed can save some of their earnings so long as they do not contribute to a retirement plan and meet other requirements.

Workers with disabilities living in the 48 contiguous states are allowed to save up to $15,060 in earnings in ABLE accounts above and beyond the gift tax limit for this year, according to Kathy Brannigan with the ABLE National Resource Center. That figure rises to $18,810 for Alaska residents and $17,310 for those in Hawaii.

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