As an eligible account holder, you are able to save up to $16,000 per year in your tax-advantaged NC ABLE account. Account holders who work have the opportunity to increase their annual contributions to an ABLE account, thanks to the ABLE to Work Act.  Like eligibility to open and maintain an NC ABLE account, account owners also self-certify to their eligibility for ABLE to Work’s increased contribution limit.

The ABLE to Work Act allows working ABLE account holders to save MORE than the $16,000 annual limit provided they are not also contributing to a retirement plan, such as a 401(k), 403(b) or 457(b) plan – or their employer is not contributing on their behalf.

ABLE account holders who meet the above requirements can save the lesser of:

  • Gross income for the calendar year, or

  • The one-person poverty limit for the previous year (or $12,880 for 2022 contributions if living in the continental US (Alaska and Hawaii residents have higher limits))

This is in addition to the $16,000 annual limit. However, additional contributions above the $16,000 limit must be made by the account holder or contributed directly through an employer payroll deduction. It is important to note that contributing earned income to an ABLE account does NOT exclude the amount of the contribution from an account holder’s income for tax purposes or when determining eligibility for certain benefits. This means that if you work as an NC ABLE account holder, your earned income will have the same effect on SSI, Medicaid, and other means-tested benefits as income that is not contributed to an ABLE account earned income even if you deposit it into an NC ABLE account.

An ABLE account owner who works may also be eligible for a federal tax credit of up to $2,000 for contributions from their income to their ABLE account. More information on the Saver’s Credit is available at www.irs.gov.

Contributions from someone other than the account owner cannot be used for additional contributions under the ABLE to Work Act’s increased contribution limit.  However, these types of contributions to an NC ABLE account can go towards the $16,000 annual limit.

ABLE to Work Reference Table
  Eligible Account Holder Eligible Working Account Holder Contributions: 
Annual Limit * $16,000 $16,000 Contributions from parents, gifts, and third parties
* the Annual Limit increases to $17,000 in 2023.
Additional Contribution Limit ** $0 $12,880 Additional contributions to an NC ABLE account up to the gross annual income or $12,880 (whichever is less)
**  the additional contribution limit increases to $13,500 in 2023.