What qualifies as an eligible expense?

There’s a wide range of eligible expenses that cover most costs associated with living with a disability. As long as the expense helps maintain or improve the health, independence, or quality of life of the person living with a disability, it can qualify as an eligible expense.

The federal government acknowledges that each of us has different needs and an idea of what a good quality of life is. They intentionally left the definition of eligible expense broad because it will vary person to person, and situation to situation. They have specifically listed these categories as being eligible expenses: living expenses, education, housing, transportation, employment, job training, career support, assistive technology, personal support services, health, prevention, wellness, financial management, administrative services, oversight and monitoring, legal fees, funeral costs, burial expenses, and more.

If you or the IRS decides that you’ve had a non-eligible expense, you will have to pay taxes on the withdrawal’s earnings and a 10% penalty on the earnings. A withdrawal used for a non-eligible expense could affect your eligibility for Supplemental Security Income (SSI) benefits, Medicaid, etc.