Colyer signs bill enhancing benefits of ABLE Act accounts for people with disabilities

Gov. Jeff Colyer signed a bill Thursday enhancing a program that allows people to put money away in special savings accounts to pay future expenses of people with long-term disabilities.

“Achieving a Better Life Experience,” or ABLE accounts, were established in 2014 under federal tax law. They are similar to college savings accounts that allow people to save for someone’s college education. Both are administered through the state treasurer’s office.

Both types of accounts are set up under section 529 of the federal tax code. ABLE accounts are sometimes called 529A accounts.

Under federal law, contributions into ABLE accounts are made with “after-tax” dollars, meaning they are not a deductible expense. But the beneficiaries of the accounts do not have to pay taxes on the money they draw down, as long as the money is used for qualifying expenses such as housing, transportation, health care and education.

The accounts are only available to people who qualify for disability benefits under Medicare, and the disability must be diagnosed before the person turns 26.

House Bill 2067 is intended to make them even more attractive for the families of people with disabilities by making contributions into those accounts tax deductible at the state level — up to $3,000 a year for individuals, or $6,000 for married couples filing jointly.

The new law also bars the state from “clawing back” any money left in those accounts after a beneficiary dies to reimburse the state Medicaid program, unless it’s required to under federal law. Instead, money left in those accounts can either be transferred to the person’s estate, or to the ABLE account of another qualifying disabled individual.

“ABLE has been a very good program for people with disabilities in Kansas and around the country,” Colyer said in a news release. “I’m glad that the legislature followed the Federal Government’s lead in strengthening this great program that helps Kansans with disabilities flourish.”

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