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Tax Advantages

Save with special tax advantages.

Your IAble account assets grow deferred from federal and state income taxes. You will not pay federal taxes on money withdrawn from your IAble account to pay for qualified disability expenses.If you are an Iowa taxpayer, all withdrawals are free from state income taxes.

Iowa taxpayers who contribute to an IAble account can take an Iowa state income tax deduction for their contributions.In 2022, the amount is up to $3,522, which is adjusted annually for inflation. The deduction is not limited to the Account Owner or Authorized Individual. Instead, any taxpayer who makes a contribution is entitled to the deduction. Taxpayers may not deduct:

  • Amounts contributed by another person; OR
  • Amounts contributed to an ABLE account administered by another state.

The graphic below shows the account owner, and anyone else who contributes to his or her account this year, may deduct contributions up to $3,522 in 2022. The account owner and others may contribute more than this amount, but can only deduct up to $3,522 of their contribution. Please keep in mind the federal maximum annual contribution limit to any ABLE account is $16,000. This means all contributions made to an IAble account cannot exceed $16,000 each year.

1 Earnings on non-qualified withdrawals may be subject to federal income tax and a 10% federal penalty tax, as well as applicable state and local income taxes.
2 If withdrawals are not qualified, the deductions must be added back to Iowa taxable income by the Account Owner. Adjusted annually for inflation.
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