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• Paragraph 179 (1 comments)

HR 1205 IHCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to provide for the establishment of ABLE accounts for the care of family members with disabilities, and for other purposes.CommentsClose CommentsPermalink

February 26, 2009CommentsClose CommentsPermalink

Mr. CRENSHAW (for himself, Mr. MEEK of Florida, Mrs. MCMORRIS RODGERS, and Mr. KENNEDY) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concernedCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to provide for the establishment of ABLE accounts for the care of family members with disabilities, and for other purposes.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘Achieving a Better Life Experience Act of 2009’ or the ‘ABLE Act of 2009’.CommentsClose CommentsPermalink

SEC. 2. PURPOSES.

The purposes of this Act are as follows:CommentsClose CommentsPermalink





(1) To encourage and assist individuals and families in saving private funds for the purpose of supporting individuals with disabilities to maintain health, independence, and quality of life.CommentsClose CommentsPermalink





(2) To provide secure funding for disability-related expenses on behalf of designated beneficiaries with disabilities that will supplement, but not supplant, benefits provided through private insurance, the Medicaid program under title XIX of the Social Security Act, the supplemental security income program under title XVI of such Act, the beneficiary’s employment, and other sources.CommentsClose CommentsPermalink

SEC. 3. ABLE ACCOUNTS.

(a) Establishment-CommentsClose CommentsPermalink





(1) IN GENERAL- Subchapter F of chapter 1 of the Internal Revenue Code of 1986 (relating to exempt organizations) is amended by inserting after part VIII the following new part:CommentsClose CommentsPermalink

‘PART IX--SAVINGS FOR INDIVIDUALS WITH DISABILITIES

‘Sec. 530A. ABLE Accounts.CommentsClose CommentsPermalink

‘SEC. 530A. ABLE ACCOUNTS.

‘(a) General Rule- An ABLE account shall be exempt from taxation under this subtitle. Notwithstanding the preceding sentence, such account shall be subject to the taxes imposed by section 511 (relating to imposition of tax on unrelated business income of charitable organizations).CommentsClose CommentsPermalink





‘(b) Definitions and Special Rules- For purposes of this section--CommentsClose CommentsPermalink





‘(1) ABLE ACCOUNTS- The term ‘ABLE account’ means a trust created or organized in the United States (and designated as an ABLE account at the time created or organized) exclusively for the purpose of paying qualified disability expenses of an individual who is an individual with a disability and who is the designated beneficiary of the trust, but only if the written governing instrument creating the trust meets the following requirements:CommentsClose CommentsPermalink





‘(A) No contribution will be accepted--CommentsClose CommentsPermalink





‘(i) except in the case of rollover contributions described in subsection (c)(4) and sections 223(c)(5)(A)(ii), 408(d)(3)(A)(iii), 529(c)(3)(E), and 530(d)(9), unless it is in cash,CommentsClose CommentsPermalink





‘(ii) if such contribution would result in aggregate contributions for the taxable year and all preceding taxable years exceeding $500,000, andCommentsClose CommentsPermalink





‘(iii) after the date on which the account holder attains the age of 65.CommentsClose CommentsPermalink





‘(B) The trustee is--CommentsClose CommentsPermalink





‘(i) a bank (as defined in section 408(n)),CommentsClose CommentsPermalink





‘(ii) the designated beneficiary,CommentsClose CommentsPermalink





‘(iii) a parent or guardian of the designated beneficiary, orCommentsClose CommentsPermalink





‘(iv) a third-party appointed by the designated beneficiary or a parent or guardian of the designated beneficiary (including a family member of the designated beneficiary or an organization that administers pooled and special needs trusts) who demonstrates to the satisfaction of the Secretary that the manner in which that person will administer the trust will be consistent with the requirements of this section.CommentsClose CommentsPermalink





‘(C) No part of the trust assets will be invested in life insurance contracts.CommentsClose CommentsPermalink





‘(D) The assets of the trust shall not be commingled with other property except in a common trust fund or common investment fund.CommentsClose CommentsPermalink





‘(E) Except as provided in paragraph (4) or (5) of subsection (c), in the case that the designated beneficiary dies or ceases to be an individual with a disability, all amounts remaining in the trust not in excess of the amount equal to the total medical assistance paid for the designated beneficiary after the establishment of the trust under any State Medicaid plan established under title XIX of the Social Security Act shall be distributed to such State.CommentsClose CommentsPermalink





‘(2) QUALIFIED DISABILITY EXPENSES-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The term ‘qualified disability expenses’ means any expenses which--CommentsClose CommentsPermalink





‘(i) are made for the benefit of an individual with a disability who is a designated beneficiary of the trust, andCommentsClose CommentsPermalink





‘(ii) approved under regulations established by the Secretary.CommentsClose CommentsPermalink





‘(B) EXPENSES INCLUDED- The following expenses shall, to the extent provided under regulations established by the Secretary, be qualified disability expenses if made for the benefit of an individual with a disability who is a designated beneficiary of the trust:CommentsClose CommentsPermalink





‘(i) EDUCATION- Expenses for education, including tuition for preschool thru post-secondary education, books, supplies, and educational materials related to such education, tutors, and special education services.CommentsClose CommentsPermalink





‘(ii) HOUSING- Expenses for housing, including rent, mortgage payments, home improvements and modifications, maintenance and repairs, real property taxes, and utility charges.CommentsClose CommentsPermalink





‘(iii) TRANSPORTATION- Expenses for transportation, including the use of mass transit, the purchase or modification of vehicles, and moving expenses.CommentsClose CommentsPermalink





‘(iv) EMPLOYMENT SUPPORT- Expenses related to obtaining and maintaining employment, including job-related training, assistive technology, and personal assistance supports.CommentsClose CommentsPermalink





‘(v) HEALTH, PREVENTION, AND WELLNESS- Expenses for the health and wellness, including premiums for health insurance, medical, vision, and dental expenses, habilitation and rehabilitation services, durable medical equipment, therapy, respite care, long term services and supports, and nutritional management.CommentsClose CommentsPermalink





‘(vi) LIFE NECESSITIES- Expenses for life necessities, including clothing, activities which are religious, cultural, or recreational, supplies and equipment for personal care, community-based supports, communication services and devices, adaptive equipment, assistive technology, personal assistance supports, financial management and administrative services, expenses for oversight, monitoring, or advocacy, funeral and burial expenses.CommentsClose CommentsPermalink





‘(vii) OTHER APPROVED EXPENSES- Any other expenses which are approved by the Secretary under regulations and consistent with the purposes of this section.CommentsClose CommentsPermalink





‘(viii) ASSISTIVE TECHNOLOGY AND PERSONAL SUPPORT SERVICES- Expenses for assistive technology and personal support with respect to any item described in clauses (i) through (vii).CommentsClose CommentsPermalink





‘(3) INDIVIDUAL WITH A DISABILITY- An individual is an individual with a disability if such individual--CommentsClose CommentsPermalink





‘(A) would be eligible to receive supplemental security income benefits due to blindness or disability under title XVI of the Social Security Act, or disability benefits under Title II of the Social Security Act, notwithstanding--CommentsClose CommentsPermalink





‘(i) the income and assets tests and substantial gainful activity test required for eligibility for such benefits, andCommentsClose CommentsPermalink





‘(ii) whether a determination has been made that such individual is blind or disabled, orCommentsClose CommentsPermalink





‘(B) is eligible to receive or is deemed to be receiving supplemental security income benefits due to blindness or disability under title XVI of the Social Security Act, or disability benefits under title II of the Social Security Act.CommentsClose CommentsPermalink





‘(4) RULES RELATING TO ESTATE AND GIFT TAX- Rules similar to the rules of paragraphs (2), (4), and (5) of section 529(c) shall apply for purposes of this section.CommentsClose CommentsPermalink





‘(5) ONLY 1 ACCOUNT PER QUALIFIED BENEFICIARY- No individual may have more than 1 ABLE account for an individual with a disability.CommentsClose CommentsPermalink





‘(c) Tax Treatment of Distributions-CommentsClose CommentsPermalink





‘(1) IN GENERAL- Except as otherwise provided in this subsection, any amount paid or distributed out of an ABLE account shall be included in gross income by the payee or distributee, as the case may be, for the taxable year in which received in the manner as provided in section 72.CommentsClose CommentsPermalink





‘(2) DISTRIBUTIONS FOR BENEFIT OF DESIGNATED BENEFICIARY-CommentsClose CommentsPermalink





‘(A) IN GENERAL- No amount shall be includible in gross income under paragraph (1) if the qualified disability expenses of the designated beneficiary during the taxable year are not less than the aggregate distributions during the taxable year.CommentsClose CommentsPermalink





‘(B) DISTRIBUTIONS IN EXCESS OF EXPENSES- If such aggregate distributions exceed such expenses during the taxable year, the amount otherwise includible in gross income under paragraph (1) shall be reduced by the amount which bears the same ratio to the amount which would be includible in gross income under paragraph (1) (without regard to this subparagraph) as the qualified disability expenses bear to such aggregate distributions.CommentsClose CommentsPermalink





‘(C) DISALLOWANCE OF EXCLUDED AMOUNTS AS DEDUCTION, CREDIT, OR EXCLUSION- No deduction, credit, or exclusion shall be allowed to the taxpayer under any other section of this chapter for any qualified disability expenses to the extent taken into account in determining the amount of the exclusion under this paragraph.CommentsClose CommentsPermalink





‘(3) ADDITIONAL TAX FOR DISTRIBUTIONS NOT USED FOR BENEFIT OF DESIGNATED BENEFICIARY-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The tax imposed by this chapter for any taxable year on any taxpayer who receives a payment or distribution from an ABLE account shall be increased by 10 percent of the amount thereof which is includible in gross income under paragraph (1).CommentsClose CommentsPermalink





‘(B) EXCEPTION- Subparagraph (A) shall not apply if the payment or distribution is made to a beneficiary (or to the estate of the designated beneficiary) on or after the death of the designated beneficiary.CommentsClose CommentsPermalink





‘(C) CONTRIBUTIONS RETURNED BEFORE CERTAIN DATE- Subparagraph (A) shall not apply to the distribution of any contribution made during a taxable year if--CommentsClose CommentsPermalink





‘(i) such distribution is made before the 60th day after the date on which the contribution was made, andCommentsClose CommentsPermalink





‘(ii) such distribution is accompanied by the amount of net income attributable to such excess contribution.CommentsClose CommentsPermalink





Any net income described in clause (ii) shall be included in gross income for the taxable year in which such excess contribution was made.CommentsClose CommentsPermalink





‘(4) ROLLOVERS- Paragraph (1) shall not apply to any amount paid or distributed from an ABLE account to the extent that the amount received is paid, not later than the 60th day after the date of such payment or distribution, into--CommentsClose CommentsPermalink





‘(A) another ABLE account for the benefit of--CommentsClose CommentsPermalink





‘(i) the same beneficiary, orCommentsClose CommentsPermalink





‘(ii) an individual who--CommentsClose CommentsPermalink





‘(I) is the spouse of such individual with a disability, or bears a relationship to such individual with a disability which is described in section 152(d)(2), andCommentsClose CommentsPermalink





‘(II) is also an individual with a disability, orCommentsClose CommentsPermalink





‘(B) any trust which is described in subparagraph (A) or (C) of section 1917(d)(4) of the Social Security Act and which is for the benefit of an individual described in clause (i) or (ii) of subparagraph (A).CommentsClose CommentsPermalink





The preceding sentence shall not apply to any payment or distribution if it applied to any prior payment or distribution during the 12-month period ending on the date of the payment or distribution.CommentsClose CommentsPermalink





‘(5) CHANGE IN BENEFICIARY- Any change in the beneficiary of an ABLE account shall not be treated as a distribution for purposes of paragraph (1) if the new beneficiary is an individual described in paragraph (4)(A)(ii) as of the date of the change.CommentsClose CommentsPermalink





‘(d) Tax Treatment of Accounts- Rules similar to the rules of paragraphs (2) and (4) of section 408(e) shall apply to any ABLE account.CommentsClose CommentsPermalink





‘(e) Community Property Laws- This section shall be applied without regard to any community property laws.CommentsClose CommentsPermalink





‘(f) Custodial Accounts- For purposes of this section, a custodial account shall be treated as a trust if--CommentsClose CommentsPermalink





‘(1) the assets of such account are held by a bank (as defined in section 408(n)) or another person who demonstrates, to the satisfaction of the Secretary, that the manner in which he will administer the account will be consistent with the requirements of this section, andCommentsClose CommentsPermalink





‘(2) the custodial account would, except for the fact that it is not a trust, constitute an account described in subsection (b)(1).CommentsClose CommentsPermalink





For purposes of this title, in the case of a custodial account treated as a trust by reason of the preceding sentence, the custodian of such account shall be treated as the trustee thereof.CommentsClose CommentsPermalink





‘(g) Reports- The trustee of an ABLE account shall make such reports regarding such account to the Secretary and to the beneficiary of the account with respect to contributions, distributions, and such other matters as the Secretary may require. The reports required by this subsection shall be filed at such time and in such manner and furnished to such individuals at such time and in such manner as may be required.CommentsClose CommentsPermalink





‘(h) Inflation Adjustment-CommentsClose CommentsPermalink





‘(1) IN GENERAL- In the case of any taxable year beginning after 2010, the $500,000 dollar amount under subsection (b)(1)(A)(i)(II) shall be increased by an amount equal to--CommentsClose CommentsPermalink





‘(A) such dollar amount, multiplied byCommentsClose CommentsPermalink





‘(B) the cost of living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2009’ for ‘calendar year 1992’ in subparagraph (B) thereof.CommentsClose CommentsPermalink





‘(2) ROUNDING- If any amount as adjusted under paragraph (1) is not a multiple of $1,000, such amount shall be rounded to the next lowest multiple of $1,000.CommentsClose CommentsPermalink





‘(i) Regulations- The Secretary, in consultation with the Secretary of Health and Human Services, shall prescribe regulations to carry out the purposes of this section, including regulations--CommentsClose CommentsPermalink





‘(1) to ensure that individuals do not have more than 1 ABLE account, andCommentsClose CommentsPermalink





‘(2) to prevent fraud and abuse with respect to amounts claimed as qualified disability expenses.’.CommentsClose CommentsPermalink





(2) CONFORMING AMENDMENTS-CommentsClose CommentsPermalink





(A) TAX ON EXCESS CONTRIBUTIONS-CommentsClose CommentsPermalink





(i) IN GENERAL- Subsection (a) of section 4973 of the Internal Revenue Code of 1986 is amended by striking ‘or’ at the end of paragraph (4), by inserting ‘or’ at the end of paragraph (5), and by inserting after paragraph (5) the following new paragraph:CommentsClose CommentsPermalink





‘(6) an ABLE account (within the meaning of section 530A),’.CommentsClose CommentsPermalink





(ii) EXCESS CONTRIBUTIONS- Section 4973 of such Code is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink





‘(h) Excess Contributions to ABLE Accounts- For purposes of this section, in the case of an ABLE account (within the meaning of section 530A), the term ‘excess contributions’ means the sum of--CommentsClose CommentsPermalink





‘(1) the amount by which the sum of the amount contributed for the taxable year to such accounts plus such amounts contributed for all preceding taxable years exceeds the amount described in section 530A(b)(1)(A)(ii), andCommentsClose CommentsPermalink





‘(2) the amount determined under this section for the preceding taxable year, reduced by the distributions from such account which were includible in gross income under section 530A(c)(1).CommentsClose CommentsPermalink





For purposes of this section, an amount which is distributed out of an ABLE account in a distribution to which section 530A(c)(3)(C) applies shall be treated as an amount not contributed.’.CommentsClose CommentsPermalink





(B) TAX ON PROHIBITED TRANSACTIONS-CommentsClose CommentsPermalink





(i) IN GENERAL- Paragraph (1) of section 4975(e) of such Code (defining plan) is amended by redesignating subparagraph (G) as subparagraph (H), by striking ‘or’ at the end of subparagraph (F), and by adding after subparagraph (F) the following:CommentsClose CommentsPermalink





‘(G) an ABLE account described in section 530A, or’.CommentsClose CommentsPermalink





(ii) EXEMPTION- Subsection (d) of section 4975 of such Code (relating to exemptions) is amended by striking ‘or’ at the end of paragraph (22), by striking the period at the end of paragraph (23) and inserting ‘; or’, and by inserting after paragraph (23) the following:CommentsClose CommentsPermalink





‘(24) in the case of an ABLE account, any transaction to provide housing or other services by a family member to or for the designated beneficiary of the trust to the extent that such transaction does not exceed the fair market value of the housing or service (as the case may be) provided.’.CommentsClose CommentsPermalink





(iii) SPECIAL RULE- Subsection (c) of section 4975 of such Code (relating to tax on prohibited transactions) is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink





‘(7) SPECIAL RULE FOR ABLE ACCOUNTS- An individual for whose benefit an ABLE account is established and any contributor to such account shall be exempt from the tax imposed by this section with respect to any transaction concerning such account (which would otherwise be taxable under this section) if section 530A(d) applies with respect to such transaction.’.CommentsClose CommentsPermalink





(C) ROLLOVERS FROM CERTAIN OTHER TAX FAVORED ACCOUNTS-CommentsClose CommentsPermalink





(i) QUALIFIED TUITION PROGRAMS- Paragraph (3) of section 529(c) of such Code is amended by adding at the end the following new subparagraph:CommentsClose CommentsPermalink





‘(E) CONTRIBUTIONS TO ABLE ACCOUNT- Subparagraph (A) shall not apply to that portion of any distribution which, within 60 days of such distribution, is contributed to an ABLE account for the benefit of the designated beneficiary.’.CommentsClose CommentsPermalink





(ii) EDUCATION SAVINGS ACCOUNTS- Subsection (d) of section 530 of such Code is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink





‘(10) CONTRIBUTIONS TO ABLE ACCOUNT- Paragraph (1) shall not apply to any amount paid or distributed from a Coverdell education savings account to the extent that the amount received is paid, not later than the 60th day after the date of such payment or distribution, into an ABLE account for the benefit of the same beneficiary.’.CommentsClose CommentsPermalink





(iii) HEALTH SAVINGS ACCOUNTS- Subparagraph (A) of section 223(f)(5) is amended--CommentsClose CommentsPermalink





(I) by inserting ‘(i)’ before ‘into a health savings account’, andCommentsClose CommentsPermalink





(II) by inserting ‘or (ii) into an ABLE account for the benefit of such beneficiary’ before ‘not later than the 60th day’.CommentsClose CommentsPermalink





(iv) CERTAIN IRAS- Subparagraph (A) of section 408(d)(3) is amended by striking ‘or’ at the end of clause (i), by striking the period at the end of clause (ii) and inserting ‘; or’, and by inserting after clause (ii) the following new clause:CommentsClose CommentsPermalink





‘(iii) the entire amount received (including money and other property) is paid into an ABLE account for the benefit of the child or grandchild of such individual not later than the 60th day after the day on which the payment or distribution is received.’.CommentsClose CommentsPermalink





(D) REPORTS- Paragraph (2) of section 6693(a) of such Code is amended by striking ‘and’ at the end of subparagraph (D), by striking the period at the end of subparagraph (E) and inserting ‘and’, and by inserting after subparagraph (E) the following new subparagraph:CommentsClose CommentsPermalink





‘(F) section 530A(g) (relating to ABLE accounts).’.CommentsClose CommentsPermalink





(E) EXCLUSION FROM INCOME UNDER SSI- Subsection (b) of section 1612 of the Social Security Act (42 U.S.C. 1382a) is amended by striking ‘or’ at the end of paragraph (22), by striking the period at the end of paragraph (23) and inserting ‘; or’, and by inserting after paragraph (23) the following:CommentsClose CommentsPermalink





‘(24) any contribution to an ABLE account.’.CommentsClose CommentsPermalink





(F) CLERICAL AMENDMENT- The table of parts for subchapter F of chapter 1 of such Code is amended by inserting after the item relating to part VIII the following new item:CommentsClose CommentsPermalink

‘Part IX. Savings for Individuals With Disabilities’.

(b) Annual Reports-CommentsClose CommentsPermalink





(1) IN GENERAL- The Secretary of the Treasury, in consultation with the Secretary of Health and Human Services, shall report annually to Congress on the usage of ABLE accounts under section 530A of the Internal Revenue Code of 1986.CommentsClose CommentsPermalink





(2) CONTENTS OF REPORT- Any report under paragraph (1) shall include--CommentsClose CommentsPermalink





(A) the number of people with an ABLE accounts,CommentsClose CommentsPermalink





(B) the total amount of contributions to such accounts,CommentsClose CommentsPermalink





(C) the total amount and nature of distributions from such accounts,CommentsClose CommentsPermalink





(D) issues relating to the abuse of such accounts, if any, andCommentsClose CommentsPermalink





(E) the amounts repaid from such accounts to State Medicaid programs established under title XIX of the Social Security Act.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 4. DEDUCTION FOR CONTRIBUTIONS TO ABLE ACCOUNTS.

(a) Deduction-CommentsClose CommentsPermalink





(1) IN GENERAL- Part VII of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by redesignating section 224 as section 225 and inserting after section 223 the following new section:CommentsClose CommentsPermalink

‘SEC. 224. CONTRIBUTIONS TO ABLE ACCOUNTS.

‘(a) Allowance of Deduction- In the case of a qualified individual, there shall be allowed as a deduction an amount equal so much of the qualified disability savings contributions made during the taxable year as do not exceed $2,000.CommentsClose CommentsPermalink





‘(b) Limitations-CommentsClose CommentsPermalink





‘(1) LIMITATION BASED ON MODIFIED ADJUSTED GROSS INCOME-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The amount which would (but for this paragraph) be taken into account under subsection (a) for the taxable year shall be reduced (but not below zero) by the amount determined under subparagraph (B).CommentsClose CommentsPermalink





‘(B) AMOUNT OF REDUCTION- The amount determined under this subparagraph is the amount which bears the same ratio to the amount which would be so taken into account as--CommentsClose CommentsPermalink





‘(i) the excess of--CommentsClose CommentsPermalink





‘(I) the taxpayer’s modified adjusted gross income for the taxable year, overCommentsClose CommentsPermalink





‘(II) the applicable amount, bears toCommentsClose CommentsPermalink





‘(ii) the phaseout amount.CommentsClose CommentsPermalink





‘(C) APPLICABLE AMOUNT; PHASEOUT AMOUNT- For purposes of subparagraph (B), the applicable amount and the phaseout amount shall be determined as follows:CommentsClose CommentsPermalink

-------------------------------------------------------------------------------- CommentsClose CommentsPermalink

                                   ‘The applicable amount is: The phaseout amount is: CommentsClose CommentsPermalink

-------------------------------------------------------------------------------- CommentsClose CommentsPermalink

In the case of a joint return                         $60,000                 $10,000 CommentsClose CommentsPermalink

In the case of a head of household                    $45,000                  $7,500 CommentsClose CommentsPermalink

In any other case                                     $30,000                 $5,000. CommentsClose CommentsPermalink

-------------------------------------------------------------------------------- CommentsClose CommentsPermalink

‘(D) MODIFIED ADJUSTED GROSS INCOME- For purposes of this paragraph, the term ‘modified adjusted gross income’ means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section 911, 931, or 933.CommentsClose CommentsPermalink





‘(E) INFLATION ADJUSTMENT- In the case of any taxable year beginning in a calendar year after 2010, each of the applicable amounts in the second column of the table in subparagraph (C) shall be increased by an amount equal to--CommentsClose CommentsPermalink





‘(i) such dollar amount, multiplied byCommentsClose CommentsPermalink





‘(ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2009’ for ‘calendar year 1992’ in subparagraph (B) thereof.CommentsClose CommentsPermalink





Any increase determined under the preceding sentence shall be rounded to the nearest multiple of $500.CommentsClose CommentsPermalink





‘(2) EARNED INCOME LIMITATION- The amount of any deduction allowed under subsection (a) with respect to any taxpayer shall not exceed the earned income (as defined by section 32(c)(2)) of such taxpayer for such taxable year.CommentsClose CommentsPermalink





‘(c) Qualified Individual- For purposes of this section, the term ‘qualified individual’ means an individual with a disability (as defined in section 530A(b)) who is the designated beneficiary of an ABLE accounts (as defined by section 530A(a)).CommentsClose CommentsPermalink





‘(d) Qualified Disability Savings Contributions- The term ‘qualified disability savings contributions’ means, with respect to any taxable year, the aggregate contributions made by the taxpayer to the ABLE account for an individual with a disability (as so defined) with respect to which such taxpayer is the qualified individual.CommentsClose CommentsPermalink





‘(e) Treatment of Contributions by Dependent- If a deduction under section 151 with respect to an individual is allowed to another taxpayer for a taxable year beginning in the calendar year in which such individual’s taxable year begins--CommentsClose CommentsPermalink





‘(1) no deduction shall be allowed under subsection (a) to such individual for such individual’s taxable year, andCommentsClose CommentsPermalink





‘(2) any qualified disability savings contributions made by such individual during such taxable year shall be treated for purposes of this section as made by such other taxpayer.’.CommentsClose CommentsPermalink





(2) CONFORMING AMENDMENTS- The table of sections for part VII of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended redesignating the item relating to section 224 as relating to section 225 and by inserting after the item relating to section 223 the following new item:CommentsClose CommentsPermalink





‘Sec. 224. Contributions to ABLE accounts.’.CommentsClose CommentsPermalink





(b) Study-CommentsClose CommentsPermalink





(1) IN GENERAL- The Secretary of the Treasury (or the Secretary’s delegate), in consultation with the Secretary of Health and Human Services, shall conduct a study on the use of ABLE accounts (as defined by section 530A(a) of the Internal Revenue Code) and the effect of the deduction allowed under section 224 of such Code for contributions to such accounts. Such study shall consider the effect that a tax credit or a refundable matching tax credit would have on the use of and contributions to such accounts.CommentsClose CommentsPermalink





(2) REPORT- Not later than 5 years after the date of the enactment of this Act, the Secretary of the Treasury shall report to Congress on the study conducted under paragraph (1).CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 5. TREATMENT OF ABLE ACCOUNTS UNDER CERTAIN FEDERAL PROGRAMS.

(a) Treatment as a Medicaid Excepted Trust- Paragraph (4) of section 1917(d) of the Social Security Act (42 U.S.C. 1396p(d)(4)) is amended by adding at the end the following new subparagraph:CommentsClose CommentsPermalink





‘(D) A trust which is an ABLE account described in section 530A(b)(1) of the Internal Revenue Code of 1986.’.CommentsClose CommentsPermalink





(b) Account Funds Disregarded for Purposes of Certain Other Means-Tested Federal Programs- Notwithstanding any other provision of Federal law that requires consideration of 1 or more financial circumstances of an individual, for the purpose of determining eligibility to receive, or the amount of, any assistance or benefit authorized by such provision to be provided to or for the benefit of such individual, any amount (including earnings thereon) in any ABLE account of such individual, and any distribution for qualified disability expenses (as defined in section 530A(b)(2)) shall be disregarded for such purpose with respect to any period during which such individual maintains, makes contributions to, or receives distributions from such ABLE account.CommentsClose CommentsPermalink