Assembly approves investment accounts for disabled children

PROVIDENCE – The General Assembly has approved legislation enabling the creation of tax-free investment accounts – designed to be similar to 529 college savings plans – to support services for disabled Rhode Islanders when they reach adulthood.

The legislation allows federally recognized, tax-sheltered ABLE – or Achieving a Better Life Experience – accounts for disabled Rhode Island children. Families and friends can deposit money that would be invested on the child’s behalf. When the child reaches adulthood, the funds from the account could be used for qualified expenses such as education, housing, transportation and services, including employment programs, personal support services, health prevention and wellness, financial management and more.

The program can be used for individuals with disabilities, including physical and developmental disabilities.

ABLE accounts fall under a federal tax designation that allows the funds to be invested free of income tax, and would also allow the account not to count as assets for determining income eligibility for state or local assistance programs, including Medicaid programs.

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