Louisiana Senate Bill SB118

Louisiana 2025 Regular Session

• Introduced: 4/3/25
• Refer: 4/3/25
• Refer: 4/14/25
• Report Pass: 4/15/25
• Engrossed: 4/22/25
• Refer: 4/23/25
• Report Pass: 5/19/25
• Enrolled: 6/2/25
• Chaptered: 6/8/25
• Passed: 6/8/25

Caption

Excludes certain amounts deposited into ABLE accounts for qualified expenses of persons with disabilities from state income tax. (8/1/25) (EN DECREASE GF RV See Note)

Impact

The bill's impact is expected to enhance the financial opportunities available to individuals with disabilities in Louisiana. By allowing for tax-free deposits into ABLE accounts, the legislation encourages families and individuals to save more effectively for future needs associated with disabilities. This change aligns Louisiana's tax policy with the goals of supporting disability advocacy and financial empowerment, potentially improving the quality of life for some of its most vulnerable residents.

Summary

Senate Bill 118 aims to provide significant tax benefits for individuals with disabilities by excluding amounts deposited into Achieving a Better Life Experience (ABLE) accounts from state income tax. Starting from the tax year 2026, individuals can exempt up to $2,400 for single filers and $4,800 for joint filers from their taxable income when they deposit into ABLE accounts for designated beneficiaries. This legislation is designed to promote financial independence for people with disabilities and encourage saving for their qualified expenses without the burden of additional taxation.

Sentiment

Generally, the sentiment surrounding SB 118 appears positive, particularly from advocacy groups and stakeholders focused on disability rights. Proponents view the bill as a crucial step in alleviating financial constraints for individuals with disabilities and fostering a separate financial system that acknowledges their unique circumstances. However, concerns may arise regarding the potential for unequal accessibility to these benefits based on socioeconomic status, suggesting a need for continuous evaluation.

Contention

While there appears to be broad support for SB 118, some members may express concerns related to the potential fiscal impact on state revenue as these tax exemptions could reduce income tax collections in the long run. Additionally, debates may arise around ensuring that all eligible individuals and families are aware of and can effectively utilize the benefits provided by ABLE accounts. The successful implementation of this legislation will hinge on outreach and education to those who would benefit most from the changes.