Excludes certain amounts deposited into ABLE accounts for qualified expenses of persons with disabilities from state income tax. (8/1/25) (EG DECREASE GF RV See Note)
The legislation represents a significant shift in financial support for individuals with disabilities in Louisiana, as it not only retains the provisions of the existing ABLE program but also enhances tax benefits associated with it. By allowing deposits to rollover if they are not maximized in a given year, the bill gives account holders greater flexibility in managing their finances. This could incentivize more families to save, as the tax implications are favorable. Overall, this change could bolster economic support for individuals with disabilities by reducing the burden of state income tax on their savings and encouraging long-term planning for financial needs related to disabilities.
Senate Bill 118 seeks to amend existing laws regarding the Achieving a Better Life Experience (ABLE) Account Program in Louisiana. The bill aims to provide a state income tax exemption for certain amounts deposited into ABLE accounts designated for the benefit of individuals with disabilities. Specifically, it proposes that individuals can exempt annual deposits of up to $2,400 for single filers and $4,800 for joint filers from their taxable income, effective for tax years beginning on and after January 1, 2026. This change is intended to encourage savings for qualified expenses that assist persons with disabilities in maintaining their health, independence, and quality of life.
Discussion around SB 118 has generated a generally positive sentiment among stakeholders advocating for individuals with disabilities. Proponents argue that the bill will provide much-needed financial relief and support for those with disabilities and their families. The tax exemption is seen as a crucial step towards allowing individuals to better manage their resources and prepare for unforeseen expenses. However, there may be concerns from budget-conscious legislators regarding the potential impact on state tax revenues, which warrants careful consideration as the bill progresses through the legislative process.
While support for the bill is strong, potential points of contention include the implications of the tax exemptions on state revenue and the effectiveness of the ABLE program overall. Critics may argue that offering such exemptions could strain the state budget, depending on how many individuals will take advantage of these new provisions. Debates may also arise over the adequacy of the proposed limits on contributions and whether they sufficiently meet the financial needs of individuals with disabilities. As the bill moves forward, it will likely face thorough scrutiny regarding its fiscal impacts and its intended benefits.