Iowans with disabilities often wish to live as independently as possible. The ABLE Act will help them do just that.
The ABLE — Achieving a Better Life Experience — Act was approved by the U.S. Congress in December. It allows people with disabilities to establish tax-free savings trusts into which money can be deposited to pay for future disability-related expenses. To be eligible, the disabling condition must have occurred prior to age 26.
The trust can be used for expenses that help maintain health, self-sufficiency and quality of life, including modifications to a home to enhance independent living, specialized medical and dental care, education and transportation. These trusts are even more attractive because people with disabilities can save up to $100,000 in their account without losing eligibility for other services, including Social Security benefits.
Under current federal gift tax limitations, as much as $14,000 may be deposited annually. Donors can deduct deposits from income tax calculations, and any gains are protected from income taxes. Each state must create its own program before its residents can establish ABLE savings accounts.
The state Senate is working to be sure that Iowa is ready to implement the program as soon as federal rules are finalized. Iowa’s program will be modeled after the College Savings Iowa 529 program and administered by the State Treasurer. You can track progress of the bill, SF 439, which was approved by the Senate Ways & Means Committee, as it moves through the Legislative process at www.legis.iowa.gov.
Learn more about the ABLE Act and the benefits of an ABLE account from the National Disabilities Institute at www.realeconomicimpact.org/News.aspx?id=460.