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ABLE Account Legislation Passes Michigan House

Savings accounts to assist and provide greater financial opportunities for disabled individuals cleared the full House on Wednesday, June 3, 2015. The Achieving a Better Life Experience (ABLE) Act, signed into law at the federal level late last year, gives states the ability to establish ABLE accounts for those with a disability occurring prior to 26 years of age. The savings accounts are tax exempt and can be used for maintaining health, independence and quality of life for those with disabilities without taking away certain essential benefits such as Medicaid.

"These families face struggles that most of us cannot imagine; this program not only allows families to save for their loved ones but these accounts incentivize long-term savings and financial stability for those who need it most," Rep. Anthony Forlini (R-Harrison Township), the lead sponsor of the bills, said in a statement. The main bill in the package (HB 4542) creates the accounts under Section 529A of the U.S. Internal Revenue Code. Under HB 4541, the maximum the account could hold is $500,000. Most of the bills passed 108-1, with HB 4541 passing 107-2. Donations made to the accounts would be deductible under Michigan's personal income tax under HB 4543. A single taxpayer could deduct up to $5,000 and joint filers could deduct up to $10,000. And HB 4544 requires the state to disregard money in a designated ABLE account when determining a person's financial ability to qualify for other benefits. "The cost of living with a disability can be extremely expensive," Mr. Forlini said. "Education, health care, and a variety of therapies are all costly, and the price continues to rise. That's why it is important that we help families manage those costs effectively."

*This article is republished from the June 4, 2015 edition of  Gongwer News.

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Posted on:
June 08, 2015