State Passage of Bill Could Give Tax Benefits to Families with Disabled Children

BY MELANIE BUCK –

The ABLE (Achieving a Better Life Experience) Act of 2014 was recently signed into federal law by President Obama and is making its way through the House of Representatives in the state of Arkansas. The ABLE Act will allow families that have children with disabilities to save for college and other expenses in tax-deferred accounts.

The ABLE Act changes the Internal Revenue Service Code to allow use of tax-free savings accounts for individuals with disabilities. Families will be allowed to use the money in the savings accounts to pay for education, housing, medical, and transportation expenses.

However, it will be up to the individual states to enact the bill. Arkansas House Representative of District 27 Julie Mayberry (R) has filed HB 1239 titled ABLE or, “To Create the Achieving a Better Life Experience Program and to Provide New Avenue for Financial Self-Sufficiency for Arkansans with Disabilities.” The bill is currently making its way through the House before being sent on to the state Senate.

Before the bill, families had no incentive to save for their disabled child’s post-secondary education or transporation. If they had saved more than $2,000 for college, an apartment, or transportation to work, they would lose critical benefits for their children, including medical and supplemental coverage.

The Autism Society said, “This piece of legislation is an important step toward empowering people with disabilities to achieve independence and affirms self-sufficiency. The Autism Society is proud of our affiliate network and advocacy organizations across the country that took a leadership role in advocating for this bill and for all people with disabilities.”

P.T. and Christy Plunkett and their son, Drew, of Mena, are one of the families that will benefit from the ABLE Act of 2014. Christy said of the Act, “Several years ago we set up 529-Plans (an education savings plan operated by a state or educational institution designed to help families set aside funds for future college costs) for the boys.  In the years since we have had to rewrite goals for Jake.  The 529-Plan could not be used for any of those plans for Jake without a penalty and tax implications.  Last year our financial advisor helped us get that money transferred to Drew’s name to be used for his education.  We are excited about the ABLE Act and what it will mean for Jake and our goals for him beyond high school. It is our hope that one day he will be able to function in a group home for men with autism and learn skills that will enable him to have a better life.  The ABLE Act will help us to plan and save to make those dreams a reality.”

To help the passage of this bill in Arkansas, you can contact your local representative to let them know your thoughts. Arkansas District 20 Representative Nate Bell can be reached at 479-234-2092 or by searching Representative Nate Bell on Facebook. Arkansas District 10 State Senator Larry Teague may be reached at 870-845-5303 or by emailing at larry.teague@senate.ar.gov.

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Jeri Pearson

Jeri is the News Director for Pulse Multi-Media and Editor of The Polk County Pulse. She has 10 years of experience in community focused journalism and has won multiple press association awards.

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