Why 97% of SSI-Eligible People Miss Out on Tax Savings
Written by
Chris Adam
Edited by
Amen Oyiboke
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In 2014, Congress passed the Achieving a Better Life Experience (ABLE) Act, creating tax-advantaged savings accounts for people with disabilities. Yet, according to some experts, only 3% of eligible individuals use them.
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While contributions aren’t tax-deductible, earnings remain untaxed if used for qualified disability expenses like medical care, education and job training.
GOBankingRates talked to Mark Raymond Jr., quadriplegic and the national outreach lead for ABLE, about why so few people are using these accounts and how they can make a world of difference for those who tap into them.
Lack of Awareness
One big question: Why are 97% of SSI-eligible people missing out on tax savings? According to Raymond, a primary reason is a significant lack of awareness about ABLE accounts.
“These tax-advantaged savings vehicles were created specifically to help individuals with disabilities save for the future without jeopardizing access to critical means-tested benefits like SSI [Supplemental Security Income] and Medicaid,” Raymond said. “Despite their value, less than 3% of the estimated 8 million eligible individuals have opened an ABLE account.”
Raymond added that the National Association of State Treasurer’s ABLE today program is working to change that by meeting people where they are – in their communities, online and at events — to share accessible, easy-to-understand information and increase adoption.
Opportunities for Assistance
The ABLE Act amended Section 529 of the U.S. Tax Code to create tax-free savings accounts for individuals with disabilities. These accounts allow people to save for qualified disability-related expenses, such as housing, education, transportation and healthcare, while protecting eligibility for benefits like SSI and Medicaid.
“ABLE accounts are one of the most powerful and underutilized tools available to individuals with disabilities today,” Raymond said. “They not only offer tax advantages but also provide a pathway to greater independence, financial security and long-term planning, especially for those who rely on public benefits.”
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