State Officials Plan For New ABLE Accounts
CHICAGO — State treasurers from across the country are meeting in Chicago this week to discuss how to implement a tax-exempt plan to help families cover the expenses of people with disabilities.
The new ABLE accounts, which stands for Achieving a Better Life Experience, will operate much like 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,” the state’s Treasurer Michael Frerichs said at a Thursday morning news conference in Chicago’s Thompson Center. “ABLE accounts could benefit hundreds of thousands of people across the country.”
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Illinois families who have children with disabilities also spoke Thursday.
Patti Vasquez’s life entered a state of emergency 10 years ago when her son, Declan, was born missing the fibers connecting the left and right sides of his brain. The family was told that he may never walk, talk or progress past the intellectual capability of a 2-year-old, said Vasquez, of Chicago.
Although Declan started walking at 3, she said he still doesn’t speak. He learned how to point at 8, she said, and how to give a kiss at 9.
“We have a hard time thinking about the future,” Vasquez said. “Will my beautiful, blue-eyed boy who loves water and dancing to Mozart and hugging, will he be loved the way he deserves?”
She said things like the ABLE Act, which was passed into federal law with bipartisan support in December, give her family hope. Each state has the option to implement the program, and it was signed into law in Illinois at the end of July.
More than 20 states have enacted similar legislation, the Illinois treasurer’s office estimated.
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.
The treasurer’s office estimates that in Illinois there will be 40,000 participants, although more than 120,000 people could qualify.
At the conference on Thursday and Friday, which includes 88 participants from 35 states, 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.
Frerichs declined to give a specific timeline for Illinois, but Betty Lochner, chair of the College Savings Plans Network, said it will take most states about a year to set up the program.
“So we’re really at the very beginning of a big mission,” Lochner said.
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