WARRENSBURG, Mo — Missouri State Treasurer Eric Schmitt and State Senator Denny Hoskins visited West Central Independent Living Solutions Thursday in Warrensburg to advocate for legislation that would give greater financial flexibility to families of individuals with disabilities.
Rolling over funds from a 529 college savings account into an ABLE (Achieving a Better Life Experience) disability savings account is currently not allowed by law. Sen. Hoskins has sponsored Senate Bill 882 to allow MOST 529 account holders to transfer funds to a MO ABLE disability savings account without a tax penalty on the money transferred.
Schmitt and Hoskins were joined by State Representative Dan Houx and other community leaders for a roundtable discussion about the proposal and how it would impact Missouri families.
“This policy change is important to families of individuals with disabilities,” Schmitt said. “If a family is saving for their children and they receive an unexpected diagnosis that changes their life plan, they ought to be able to adjust their financial planning accordingly without the government penalizing them.”
The change would mirror a recent change to the federal tax code that gave states the ability to permit transfers between 529 and ABLE accounts.
“We know that unforeseen medical diagnoses can happen at any age and we want parents to be able to make financially sound decisions about the future of their children,” Hoskins said. “This bill gives families greater financial flexibility by updating our state tax code to reflect federal changes.”
Missourians who contribute to MO ABLE accounts will be eligible for a tax deduction of up to $8,000 or $16,000 if married and filing jointly. Earnings in ABLE Accounts are not subject to federal income tax, so long as funds are spent on qualified disability expenses.
“Treasurer Schmitt and Senator Hoskins are playing an important role in protecting Missouri’s most vulnerable citizens by advocating for this change,” said David Pearce, a Senior Policy Advisor in the Missouri State Treasurer’s Office who represented Warrensburg in the Missouri State Senate for eight years. “This is a common-sense proposal that all legislators should support.”
Treasurer Schmitt launched Missouri’s ABLE program, MO ABLE, in April 2017. Eligible individuals can learn more and sign up for an account atwww.MOABLE.com. An initial contribution of at least $50 is required in order to set up an account.