Excludes certain amounts deposited into ABLE accounts for qualified expenses of persons with disabilities from state income tax. (8/1/25) (OR DECREASE GF RV See Note)
Summary
SB 12 revises Louisiana’s income tax treatment of Achieving a Better Life Experience (ABLE) accounts, which are savings accounts used to help people with disabilities pay for qualified disability-related expenses. Beginning with tax years on or after January 1, 2026, the bill exempts from state individual income tax the amount an account owner deposits into an ABLE account on behalf of a designated beneficiary, up to $2,400 per beneficiary per year for single filers and $4,800 per beneficiary per year for joint filers. If an account owner deposits less than the annual cap in a given year, the unused amount may roll forward and remain eligible for exemption in later years, subject to the bill’s rules.
The bill also updates Louisiana’s definition of “tax table income” to subtract ABLE deposits and accrued interest, while requiring that any withdrawals used for purposes other than qualified disability expenses be included in taxable income. In addition, SB 12 amends several education-related deduction provisions to prevent a taxpayer from claiming both the new ABLE-related tax benefit and certain education deductions in the same taxable year when the funds are used for specified K-12 tuition or education expenses. The act applies to taxable periods beginning on or after January 1, 2026.
Impact
SB 12 amends R.S. 17:3088 and R.S. 47:293, 297.10, 297.11, and 297.12 to create a specific state income tax exclusion for ABLE account deposits and related interest, while also limiting overlap with certain existing education tax deductions. The practical effect is to reduce Louisiana taxable income for eligible ABLE contributions and to clarify that nonqualified withdrawals remain taxable. The bill is also expected to reduce state general fund revenue, as reflected in the bill caption.
Sentiment
Based on the bill text and available context, the measure appears generally supportive and noncontroversial in purpose, as it is framed as a tax benefit for individuals with disabilities and their families. No committee transcripts or vote records were provided, so there is no documented debate or recorded opposition in the supplied materials. The overall tone of the proposal is technical and targeted rather than broad or partisan.
Contention
The main policy issue in the bill is the interaction between the new ABLE tax exclusion and existing education-related deductions. SB 12 expressly bars taxpayers from using both benefits in the same taxable year for certain K-12 tuition and education expenses, which could matter for families who use multiple state tax preferences. Another point of potential concern is the revenue impact on the state general fund, since the bill creates a new income tax exclusion. No specific objections from legislators, agencies, or stakeholders are included in the provided record.