State Treasurer Michael Fitzgerald announced the launch of IAble, Iowa’s tax-advantaged savings plan for persons with disabilities and their families. Signed into Iowa law in 2015, IAble allows families the opportunity to plan for the future well-being of a loved one with a disability without the risk of losing their eligibility for certain assistance programs, like SSI and Medicaid.
“I have worked hard over the years to help Iowa families save for college through College Savings Iowa. Our new IAble program is a tax-advantaged plan designed to help persons with disabilities and their families save to achieve a better life experience,” Fitzgerald said. “My office is pleased to announce that Iowa families can now take advantage of this savings tool to plan for today’s expenses or tomorrow’s needs.”
The federal Achieving a Better Life Experience Act (ABLE) of 2014 authorized tax-advantaged investment accounts similar to college savings programs such as College Savings Iowa. With ABLE accounts, people with disabilities and their families may save up to $14,000 annually for qualified disability expenses, including but not limited to housing, transportation, assistive technology and education, among others.
Together with 14 other states, Iowa is a member of the National ABLE Alliance. This multistate consortium allows IAble to offer low costs and high-quality investment options to eligible individuals in Iowa and across the nation.
IAble, similar to College Savings Iowa, offers savers a variety of investment options to best meet their goals and comfort with risk. The earnings on investments are federally tax-deferred and tax-free, if used for qualified disability expenses.* Iowa taxpayers may also deduct up to $3,239 in contributions from their adjusted gross income for 2017.**
To open an IAble account for as little as $25, visit IAble.gov. Account owners can access their accounts online at any time, and even make withdrawals from the website. For more information about IAble, call 888-609-8910 or visit IAble.gov.
*Earnings on non-qualified withdrawals may be subject to federal income tax and a 10% federal penalty tax, as well as applicable state and local income taxes.
**If withdrawals are not qualified, the deductions must be added back to Iowa taxable income. Adjusted annually for inflation.