On June 30 2015, Ohio Governor John Kasich signed a bill that allows individuals in Ohio with a disability to establish an ABLE account. Congress, prior to the State of Ohio’s approval, passed a law which went into effect in January of 2015, creating a new type of savings account for individuals with disabilities. The Achieving a Better Life Experience (ABLE) Act was enacted to assist and support those persons with disabilities in their ability to remain as healthy and independent as possible.
The ABLE accounts are devised to assist a disabled person with his or her qualified expenses, such as health, education, housing, or assistive technology. The earned income under the ABLE account would not be considered taxable income, however, how the money from the accounts were to be spent was to undergo some stringent reporting guidelines according to the Internal Revenue Service.
Recently, however, the Internal Revenue Service (IRS) has decided to ease up on rules for new accounts that will allow people with disabilities to save money without jeopardizing their government benefits. Earlier this year, the IRS laid out plans for how accounts established under the ABLE Act would operate. But the agency received significant pushback from disability advocates and state officials alike who said the proposed federal requirements would be overly burdensome.
Now, the IRS is easing its requirements to some degree. In a recent notice, the IRS said it plans to issue final regulations with less stringent reporting requirements. Specifically, individuals opening ABLE accounts will not need to submit medical documentation, but will have to certify under penalty of perjury that they have a qualifying diagnosis, according to the IRS. Additionally, the agency indicated that ABLE programs will not be required to request taxpayer identification numbers from contributors to ABLE accounts except in limited circumstances and program administrators will not have to categorize how the money in the accounts is being utilized.
Keeping you informed are the trusted attorneys from Browning & Meyer Co., LPA. Please contact our law office with any questions about Ohio Able Act or other special needs concerns.