Tennessee ABLE Account: How to Open and Use Your Account

An Achieving a Better Life Experience (ABLE) account is a specialized savings and investment vehicle created by federal law. Administered by the Tennessee Department of Treasury, the ABLE TN program is designed to help individuals with disabilities and their families set aside funds for the future. This program allows for the accumulation and investment of money with tax-free earnings. A feature of these accounts is that they allow beneficiaries to save without jeopardizing their eligibility for certain means-tested government benefits.

Eligibility and Account Parameters

To open an ABLE TN account, an individual must have a qualifying disability with an onset date before their 26th birthday. Beginning January 1, 2026, the ABLE Age Adjustment Act will expand this requirement, increasing the age of onset to 46. An individual who is already receiving benefits under Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI) automatically qualifies. Alternatively, a person can be certified by a qualified physician as having a physical or mental impairment that results in “marked and severe functional limitations” and is expected to last for at least 12 continuous months.

For 2025, the total annual contribution from all sources—including the beneficiary, family, and friends—is capped at $19,000. However, an account owner who is employed and not participating in an employer-sponsored retirement plan may contribute additional funds. This extra amount is limited to the lesser of their gross income for the year or the federal poverty level for a one-person household, which is $15,060 for 2025. The lifetime contribution limit for an ABLE TN account is $500,000.

Account balances up to $100,000 are completely disregarded when determining eligibility for SSI. If the account balance exceeds $100,000, SSI payments are suspended but not terminated; they can be reinstated once the balance falls below the threshold. Funds held in an ABLE TN account, regardless of the amount, do not affect an individual’s eligibility for Medicaid benefits.

Qualified Disability Expenses

Funds from an ABLE TN account must be used for “qualified disability expenses” (QDEs). The Internal Revenue Service defines a QDE as any expense incurred by the beneficiary as a result of living with a disability that helps them maintain or improve their health, independence, or quality of life. These expenses do not need to be medically necessary.

Examples of QDEs include:

• Education costs, such as tuition for preschool through post-secondary school, books, and supplies
• Housing expenses, like rent, mortgage payments, and property taxes
• Transportation costs, which can range from public transit fares to the purchase and modification of a vehicle
• Employment training and support
• Assistive technology and personal support services
• Health and wellness costs not covered by insurance, such as medical equipment or therapy services

The account beneficiary is responsible for tracking all expenditures and ensuring they meet the criteria of a QDE, as the IRS may require documentation to verify the nature of the withdrawals.

The ABLE TN Application Process

The application to open an ABLE TN account is completed entirely online through the official ABLE TN website and can be finished in about 10 minutes if you have the required information.

You will need the following information for the application:

• The beneficiary’s full legal name, permanent physical address, date of birth, and Social Security Number or Taxpayer Identification Number
• Personal information for an Authorized Legal Representative, such as a parent or legal guardian, if one will be opening and managing the account
• The bank account number and routing number for the financial institution that will be used to make the initial contribution, which is a minimum of $25

During the online process, you must certify the basis for the beneficiary’s eligibility. This involves confirming the disability was present before age 26 and attesting to one of the eligibility paths: active receipt of SSI or SSDI benefits, having a condition on the Social Security Administration’s List of Compassionate Allowances, or possessing a signed diagnosis from a licensed physician.

While you do not need to submit the physician’s diagnosis during the application, you must have it on file and be able to provide it upon request. After funding the account and submitting the application, you will receive an email confirmation with your new account number and instructions for setting up online access.

Managing Your ABLE TN Account

The ABLE TN account is managed through a secure online portal. The portal allows the owner or representative to make contributions as one-time or recurring electronic transfers. Friends and family can also contribute directly to the account through a specific gifting link.

Withdrawals for qualified disability expenses can be requested as an electronic transfer to a bank account. A debit card is also available for direct spending. You must maintain records linking each withdrawal to a specific qualified expense.

Funds can be invested in a range of portfolios, categorized as conservative, moderate, or aggressive. Account owners can change their investment allocation twice per calendar year. Review periodic account statements, which detail all contributions, withdrawals, investment earnings, and any administrative fees.