At the ceremonial Bill Signing for House Bill 2178 were, from left, state Representative Kyle Hilbert, State Treasurer Randy McDaniel, Oklahoma Governor Kevin Stitt, RoseAnn Duplan, Ellyn Hefner, Angela Donley and John Michael Montgomery. The new law creates a new state income tax deduction for those wishing to contribute to the State Achieving a Better Life Experience (OK STABLE) program. Photo Credit: State Legislative staff.

By Kyle Hilbert, State Representative

The Legislature passed and the governor signed into law House Bill 2178, a measure that creates a state income tax deduction for those who wish to contribute to the State Achieving a Better Life Experience (OK STABLE) program. 

The program allows families of who have a child who have a child with a disability to set aside money for their care in a way that earns special tax benefits. 

This legislation will improve the quality of life of eligible people with disabilities. 

Eligible individuals are those who were blind or disabled before the age of 26 and have been living with their disability for at least one year, or who expect their disability to last for at least a year. The investment accounts allow qualified individuals with disabilities to save and invest money without losing eligibility for certain public benefit programs, like Medicaid or Supplemental Security Income. 

House Bill 2178 was requested from Oklahoma State Treasurer Randy McDaniel. 

It is designed to offer an identical income tax deduction as the one offered for contributions to Oklahoma’s 529 College Savings Plan, which the Treasurer’s office also oversees. The 529 program has been immensely successful in helping parents save for their children’s college education. 

Under current Oklahoma law, contributions were not deductible, but distributions – including earnings – were tax-free to the designated beneficiary if used to pay qualified disability expenses. 

H.B. 2178 now allows an income tax deduction to STABLE accounts of up to $10,000 per individual taxpayer or $20,000 for taxpayers filing a joint return. The accounts can work alongside Special Needs Trusts and function like a regular checking account.  This provides financial independence and empowerment for individuals with disabilities. 

Before, individuals with disabilities could only save $2,000 before losing needs-based benefits. Now, Oklahoma STABLE allows individuals with disabilities to save and invest up to $15,000 annually without affecting eligibility for certain public benefits programs.  

Oklahoma STABLE funds can be used on qualified disability expenses including: education, housing, transportation, health care, assistive technology, employment needs and basic living expenses. 

Earnings on the accounts can grow tax-free and are not subject to federal or state income tax as long as the money is spent on Qualified Disability Expenses. 

The program was authorized under the bipartisan Achieving a Better Life Experience Act of 2014. Although the federal tax code allows for ABLE accounts, it’s up to the states to set up and administer the program. Oklahoma’s STABLE program launched May 31, 2018. 

Accounts contributed but not deducted by the taxpayer in the tax year for which the contribution is made may be carried forward as a deduction from income for up to five tax years. Deductions may be taken for contributions made during the tax year and through April 15 of the succeeding tax year, or through the date of a taxpayer’s state income tax return excluding extensions, whichever is later. 

Under current Oklahoma law, interest dividends and capital gains from funds invested in the OK STABLE program are exempt from Oklahoma income taxes, as are qualified distributions from disability savings accounts established under the OK STABLE program, with respect to the designated beneficiary’s income.  

Data from the Oklahoma State Treasurer’s office indicates there are more than 800 active STABLE accounts in Oklahoma. It’s hoped that with the new change in law, even more individuals with disabilities will have access to these accounts. 

I greatly appreciate the work of Senator John Michael Montgomery and our colleagues in the legislature for making this legislation become a reality. H.B. 2178 is a bill that will make a real difference for the families and individuals in Oklahoma who most need it. 

NOTE: More information about OK STABLE can be found online at okstable.org .

Contact Ellyn Hefner ellynhefner@financialguide.com about how OKSTABLE works with Special Care Planning.


State Representative Kyle Hilbert, R-Bristow


State Senator John Michael Montgomery, R-Lawton.

OKSTABLE’s Gift Giving Two-fer

Ellyn Hefner is a special care professional who guides The City Sentinel’s coverage of the OK STABLE program. . Photo provided.


The OK STABLE program allows citizens with disabilities, and their families supporting them, to access robust benefits to secure a better financial future. Photo Provided

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