What is considered a “qualified expense”?
Most expenses related to the costs associated with living with a disability qualify as an eligible expense. The expense must simply help maintain or improve the health, independence, or quality of life of the person living with a disability. Some of the most common qualified expenses as defined by the IRS include:
Living expenses
Education
Housing
Transportation
Employment, training, and support
Assistive technology
Personal support services
Health, prevention, and wellness
Financial management
Administrative services
Legal fees
Oversight and monitoring
Funeral and burial costs, and more
If the IRS determines that you’ve used your ABLE funds for a non-qualified expense, you will have to pay taxes on the withdrawal’s earnings plus a 10% penalty on the earnings. A withdrawal used for a non-eligible expense could affect your eligibility for benefits such as Supplemental Security Income (SSI) and Medicaid.
