Two significant changes took effect in 2026 that every Arizona family doing disability planning should understand. One expands who can open an ABLE account. The other improves how inherited retirement accounts pass to a trust for a disabled beneficiary. Together, these shifts open planning opportunities that did not exist before.
Effective January 1, 2026: ABLE accounts are now available to people whose disability began before age 46, up from the old threshold of age 26. This is the biggest expansion of ABLE eligibility since the accounts launched in 2014.
The ABLE Age Adjustment Act
ABLE accounts were created by the Achieving a Better Life Experience Act in 2014. They are tax-advantaged savings accounts for people with significant disabilities. Until 2025, a person was only eligible if their disability or blindness began before age 26.
The ABLE Age Adjustment Act, passed as part of the SECURE 2.0 Act in December 2022, changed this rule. Starting January 1, 2026, a person qualifies for an ABLE account if their disability began before age 46. This is a 20-year expansion of the eligibility window. The Social Security Administration estimates this change adds approximately 6 million additional Americans to the eligible pool, including many working-age adults diagnosed with cancer, multiple sclerosis, traumatic brain injuries, or other serious conditions in their 30s and 40s.
To qualify, a person must still meet one of these tests:
- Be blind as defined by the Social Security Administration, OR
- Have a physical or mental impairment that causes marked and severe functional limitations and has lasted or is expected to last at least 12 months or result in death, OR
- Already receive SSI or SSDI, which provides automatic eligibility
The disability must have begun before age 46, but there is no age limit for when a person can actually open or use the account.
2026 ABLE Contribution Limits
The annual contribution limit for ABLE accounts in 2026 is $18,000, matching the annual federal gift tax exclusion for that year. Contributions can come from any source: the account holder, family members, friends, or an employer.
Employed ABLE account holders get an additional contribution allowance. If the account holder works and does not participate in an employer retirement plan, they can contribute up to an additional $14,580 (the 2026 federal poverty level for an individual) from their own earned income.
ABLE accounts grow tax-free, and withdrawals for qualified disability expenses are also tax-free. Non-qualified withdrawals are taxed and subject to a 10 percent penalty.
SECURE 2.0: Inherited IRA Rules for Disabled Beneficiaries
The SECURE Act of 2019 replaced the old lifetime stretch rule for most non-spouse beneficiaries with a 10-year rule, requiring most heirs to fully withdraw an inherited IRA or 401(k) within 10 years of the original owner's death. This compressed timeline creates a large tax burden for heirs in high-earning years.
There is an important exception: disabled or chronically ill beneficiaries are allowed to take required minimum distributions over their own life expectancy instead of the 10-year rule. This is called the lifetime stretch.
The SECURE 2.0 Act, signed in December 2022 and now fully in effect, clarified how this exception applies when the disabled individual is a beneficiary through a trust. Specifically, if a trust is named as the IRA beneficiary and the trust is a properly structured "see-through" trust for a disabled beneficiary, the trust may qualify for the lifetime stretch rule. This allows the IRA to distribute over the beneficiary's life expectancy, reducing the annual taxable amount and preserving more of the retirement account over time.
Getting this right requires careful trust drafting. The trust must qualify as a conduit trust or an accumulation trust under IRS rules. An estate planning attorney familiar with both special needs trusts and retirement account planning should review the structure before the IRA owner names the trust as beneficiary.
How These Changes Affect Arizona Families
For Arizona families doing disability planning in 2026, these changes mean:
- Families who were previously shut out of ABLE accounts because a loved one's disability began in their 30s or 40s can now open one and start saving
- ABLE accounts can now complement an SNT for a broader group of people with disabilities
- Families with significant retirement assets can structure an SNT to receive an IRA and use the lifetime stretch, reducing the tax hit on the disabled beneficiary over time
- Older working adults with newly diagnosed disabilities have a new savings tool that protects benefits while building resources
These changes reward early planning. If you or a family member may now qualify for an ABLE account due to the age expansion, or if you have retirement accounts you plan to leave to a trust for a disabled beneficiary, now is the right time to review your plan with an attorney who knows Arizona special needs law.
This question is one piece of a larger picture. For the full Arizona overview, see our Special Needs Trust Arizona: Complete Guide.
Quick reference: see our SNT distribution cheatsheet for a side-by-side of 20 common expenses showing whether to pay from the SNT, the ABLE account, or not at all, and the SSI impact of each choice.