Nebraska State Treasurer Don Stenberg publicly took the U.S. Internal Revenue Service to task over new rules issued by the agency regarding the administration of ABLE accounts. The “Achieving a Better Life Experience” (ABLE) law allows parents or guardians to establish tax-free savings accounts for their disabled children. With an ABLE account you can set aside as much as $14,000 a year and up to a total of $100,000 to be used for the education, housing, assistive technology and other needs of disabled persons. ABLE accounts are similar to 529 college-savings accounts.
But a new federal proposal would require parents, when they want to withdraw money, to file paperwork with the state showing that the withdrawal is for “a qualified disability expense,” Stenberg said in a press release. “As I read the proposed regulations, every time individuals with disabilities want to spend even a single dollar of their money, from their own ABLE accounts, they have to file paperwork with the state demonstrating that each is a ‘qualified disability expense.’ This is a slap in the face of Americans with disabilities, and is an unreasonable and unnecessary burden on them,” Stenberg said. He called the proposal “shameful” He noted that 529 accounts do not have this requirement. “The kind of program I would like to have here in Nebraska would allow qualified individuals to write checks or use debit cards to pay qualified disability-related expenses from their ABLE accounts,” Stenberg said. “It is, after all, their own money. “
“I strongly urge advocates of people with disabilities here in Nebraska and across the nation to submit comments to the U.S. Treasury Department objecting to these regulations and to send copies to their U.S. Senators and members of the House of Representatives,” Stenberg added.
Congress authorized the creation of ABLE accounts in December 2014, but because an account may only be opened in the state in which the beneficiary resides, individual states have to come up with their own plans for administering ABLE accounts. Nebraska is among the 20 states in the union so far to create the tax-sheltered accounts for the disabled. Like the 529 college savings accounts, ABLE accounts will be administered by the Nebraska State Treasurer’s office.
