States to Set Up ABLE Accounts for People with Disabilities
State treasurers from across the country recently met in Chicago to discuss how to implement a tax-exempt plan to help families cover the expenses of people with disabilities.
The ABLE accounts, Achieving a Better Life Experience, will nearly copies 529 college savings plans in that the growth is federal tax-free and families are allowed to withdraw money for qualified expenses tax-free.
"This is not just an Illinois issue," said Treasurer Michael Frerichs at a news conference in Chicago's Thompson Center. "ABLE accounts could benefit hundreds of thousands of people across the country."
More than 20 states have enacted similar legislation.
In Illinois, the treasurer's office will be responsible for the administration and implementation of ABLE accounts, which can be used to pay for long-term and short-term qualifying expenses, such as building a ramp to enter a home or paying for speech therapy.
Frerichs office estimates that in Illinois there will be 40,000 participants, although more than 120,000 people qualify.
Nearly 90 people from 35 states attended the conference. Illinois is working with other states to present federal rule makers suggestions on how to implement the process efficiently and make the plans as user-friendly as possible. Illinois is also exploring a collaboration with other states, Frerichs said.
When asked how long how it will take to set up the program, Betty Lochner, chair of the College Savings Plans Network, said, “It will take most states about a year.”