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Tax Advantages

Save with special tax advantages.

For all account owners, the earnings on your investments are federally tax-deferred and tax-free, if used for qualified disability-related expenses. If an Iowa taxpayer is an IAble account owner, withdrawals are free from state income taxes. Iowa taxpayers can deduct up to $3,474 in contributions from their adjusted gross income for 2021.

The graphic below shows that the account owner, and anyone else who contributes to his or her account this year, may deduct contributions up to $3,474 in 2021. The account owner and others may contribute more than this amount, but can only deduct up to $3,474 of their contribution. Please keep in mind that the federal maximum annual contribution limit to any ABLE account is $15,000. This means that all contributions made to an IAble account cannot exceed $15,000 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. Adjusted annually for inflation.
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