Sec. 24. (a) All ABLE accounts and all earnings or interest on ABLE accounts are exempt from taxation in Indiana to the extent that those accounts, earnings, and interest are exempt from federal taxation under the Internal Revenue Code, subject to any penalties that are established for a
qualified ABLE program under this chapter.
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Terms Used In Indiana Code 12-11-14-24
- ABLE account: refers to an achieving a better life experience (ABLE) account established by an eligible individual that:
Indiana Code 12-11-14-1
- Attachment: A procedure by which a person's property is seized to pay judgments levied by the court.
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- designated beneficiary: means the eligible individual who has established an ABLE account and is the owner of the account. See Indiana Code 12-11-14-5
- Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
- Garnishment: Generally, garnishment is a court proceeding in which a creditor asks a court to order a third party who owes money to the debtor or otherwise holds assets belonging to the debtor to turn over to the creditor any of the debtor
- Property: includes personal and real property. See Indiana Code 1-1-4-5
- qualified ABLE program: refers to the achieving a better life experience (ABLE) program established under this chapter under which a person may make contributions for a taxable year for the benefit of an eligible individual to an ABLE account to meet the qualified disability expenses of the designated beneficiary in compliance with Section 529A of the Internal Revenue Code. See Indiana Code 12-11-14-7
(c) Funds held in an ABLE account that may be established under this chapter may not be used by an account owner or account beneficiary as security for a loan.
(d) Funds held in an ABLE account:
(1) are exempt from creditors and are not liable to attachment, levy, garnishment, or other process; and
(2) may not be seized, taken, appropriated, or applied by any legal or equitable process or operation of law to pay any debt or liability of any contributor or beneficiary.
However, the state of residency of the designated beneficiary of an ABLE account is a creditor of the account in the event of the death of the designated beneficiary.
(e) Funds held in an ABLE account may not be included in determining income eligibility of the designated beneficiary for state and local assistance programs.
As added by P.L.12-2016, SEC.8.
