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STABLE accounts offer new tax-advantaged savings option

These tax-advantaged savings accounts allow families to set aside money to use on qualified expenses such as education, healthcare, housing, and transportation. Earnings and distributions from a STABLE Kentucky Account for qualified disability expenses do not count as taxable income of the contributor or eligible beneficiary at the federal level.

By OJ Oleka
Communications Director, Office of State Treasurer Allison Ball

Frankfort, KY - Kentucky State Treasurer Allison Ball will begin offering State Treasurer ABLE accounts in Kentucky, or STABLE Kentucky accounts, she announced in a press conference Tuesday afternoon. The initiative is a partnership with Ohio's STABLE Accounts, an initiative launched by Ohio Treasurer Josh Mandel this past summer.

"For too long, many individuals in Kentucky with disabilities have been denied the opportunity to save and invest," Treasurer Ball said in her remarks. "With the launch of STABLE Kentucky, that has all changed."

STABLE Kentucky Accounts are possible through the federal Achieving a Better Life Experience ("ABLE") Act passed by Congress in 2014. STABLE Accounts allow individuals with disabilities the opportunity to save and invest money without losing eligibility for certain public benefits programs, like Medicaid, SSI, or SSDI. Earnings in STABLE Kentucky Accounts are not subject to federal income tax, so long as funds are spent on qualified disability expenses. This helps parents like Ashley Meier Barlow, a mother of a child with a disability, have peace of mind about their children's future.

"All I want is to be able to secure a safe financial future for my son," Barlow said at the event. "I want him to be able to save for rent, to save for a home. The same types of things all parents want for their children. STABLE Kentucky allows him that freedom."

STABLE Kentucky Accounts have similar features to normal bank accounts, but are also investment accounts, similar to 529 college savings accounts or 401(k) retirement accounts. When a participant deposits money into their STABLE Kentucky Account, the money can be invested in different options chosen by the participants. While participants can still withdraw and spend money as needed, a STABLE Kentucky Account also allows money to grow and save long-term for disability expenses. That is very beneficial for people that want to set up an account for themselves, says Amanda Stahl, who also spoke on Tuesday.

"By allowing me to save and invest money for my future, STABLE Kentucky Accounts give me the maximum opportunity to maintain my health and happiness," Stahl said. "This is a great new initiative."

These tax-advantaged savings accounts allow families to set aside money to use on qualified expenses such as education, healthcare, housing, and transportation. Earnings and distributions from a STABLE Kentucky Account for qualified disability expenses do not count as taxable income of the contributor or eligible beneficiary at the federal level.

"I'm honored to have been a sponsor and major supporter of this legislation from the beginning," Representative Addia Wuchner from Northern Kentucky said. "I'm delighted to witness the roll out of Stable Kentucky and I will continue to work with Treasurer Ball to assure ours is one of the best in the nation."

There are minimal costs associated with maintaining a STABLE Kentucky Account. Kentucky residents with an account will pay $5 a month ($60 annually) for maintenance. Account holders will also have a small asset-based fee.

"This is something I am tremendously proud of," State Senator Wil Schroder stated. "As a lead sponsor, I knew that this was a bipartisan cause we could get behind. I'm excited to be a part of this historic launch."

On April 5, 2016, Governor Bevin signed into law SB 179, which gave the Treasurer the opportunity to determine the best way to bring ABLE Accounts to the most Kentuckians. The Treasurer and other stakeholders will be releasing a report to the Legislative Research Commission by December 31st. As a result of Kentucky's partnership with Ohio, the program comes at zero cost to Kentucky taxpayers to administer it.

"I work hard to make sure that taxpayer dollars are spent efficiently," Treasurer Ball stated. "I'm proud to tell Kentuckians that we are able to implement such an important initiative without paying a single additional penny to operate it."

For more information please visit stablekentucky.com.


This story was posted on 2016-12-15 15:00:56
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