Tax-free savings for the disabled approved

Senators passed a bill May 21 that authorizes tax-free savings accounts for disabled individuals in Nebraska.

LB591, introduced by Lincoln Sen. Kate Bolz, establishes Achieving a Better Life Experience (ABLE) accounts for individuals with disabilities that developed prior to age 26. ABLE accounts offer tax-free savings options for education, housing, assistive technology and other needs.

Under a qualified program, any person may make contributions to an account to meet the qualified disability expenses of the designated beneficiary of an account.

The state investment officer will have fiduciary responsibility to make all decisions regarding the investment of money in the administrative fund, expense fund and program fund including selection of all investment options.

The bill includes provisions of LB76, originally introduced by Columbus Sen. Paul Schumacher, which require taxpayers reducing taxable income using net operating loss carry forwards to add back the net operating loss carry forward amount to their taxable income for purposes of claiming the Nebraska earned income tax credit.

The provisions also require taxpayers to report the net operating loss carry forward amount as household income when claiming a homestead tax exemption.

The bill passed on a 47-0 vote.