S 1872 ISCommentsClose CommentsPermalink

112th CONGRESSCommentsClose CommentsPermalink

1st SessionCommentsClose CommentsPermalink

S. 1872CommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to provide for the tax treatment of ABLE accounts established under State programs for the care of family members with disabilities, and for other purposes.CommentsClose CommentsPermalink

IN THE SENATE OF THE UNITED STATESCommentsClose CommentsPermalink

November 15, 2011CommentsClose CommentsPermalink

Mr. CASEY (for himself and Mr. BURR) introduced the following bill; which was read twice and referred to the Committee on FinanceCommentsClose CommentsPermalink

A BILLCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to provide for the tax treatment of ABLE accounts established under State programs 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 2011’ or the ‘ABLE Act of 2011’.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- Section 529 of the Internal Revenue Code of 1986 is amended by redesignating subsection (f) as subsection (g) and by inserting after subsection (e) the following new subsection:CommentsClose CommentsPermalink





‘(f) ABLE Accounts-CommentsClose CommentsPermalink





‘(1) GENERAL RULES- For purposes of any other provision of law with respect to a qualified ABLE program and an ABLE account, except as otherwise provided in this subsection--CommentsClose CommentsPermalink





‘(A) a qualified ABLE program and an ABLE account shall be treated in the same manner as a qualified tuition program and an account described in subsection (b)(1)(A)(ii), respectively, are treated, andCommentsClose CommentsPermalink





‘(B) qualified disability expenses with respect to a program or account described in subparagraph (A) shall be treated in the same manner as qualified higher education expenses are treated.CommentsClose CommentsPermalink





‘(2) QUALIFIED ABLE PROGRAM- For purposes of this subsection, the term ‘qualified ABLE program’ means a program established and maintained by a State or agency or instrumentality thereof--CommentsClose CommentsPermalink





‘(A) under which a person may make contributions to an ABLE account which is established for the purpose of meeting the qualified disability expenses of the designated beneficiary of the account,CommentsClose CommentsPermalink





‘(B) which meets the requirements of the preceding subsections of this section (as modified by this subsection), determined by substituting--CommentsClose CommentsPermalink





‘(i) ‘qualified ABLE program’ for ‘qualified tuition program’, andCommentsClose CommentsPermalink





‘(ii) ‘ABLE account’ for ‘account’, andCommentsClose CommentsPermalink





‘(C) which meets the other requirements of this subsection.CommentsClose CommentsPermalink





‘(3) QUALIFIED DISABILITY EXPENSES- For purposes of this subsection--CommentsClose CommentsPermalink





‘(A) IN GENERAL- The term ‘qualified disability expenses’ means any expenses which are made for the benefit of an individual with a disability who is a designated beneficiary.CommentsClose CommentsPermalink





‘(B) EXPENSES INCLUDED- The following expenses shall be qualified disability expenses if such expenses are made for the benefit of an individual with a disability who is a designated beneficiary and are related to such disability: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 a primary residence, including rent, purchase of a primary residence or an interest in a primary residence, mortgage payments, 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 health and wellness, including premiums for health insurance, mental health, medical, vision, and dental expenses, habilitation and rehabilitation services, durable medical equipment, therapy, respite care, long term services and supports, nutritional management, communication services and devices, adaptive equipment, assistive technology, and personal assistance.CommentsClose CommentsPermalink





‘(vi) MISCELLANEOUS EXPENSES- Financial management and administrative services; legal fees; expenses for oversight; monitoring; home improvements, and modifications, maintenance and repairs, at primary residence; or funeral and burial expenses.CommentsClose CommentsPermalink





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





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





‘(C) INDIVIDUAL WITH A DISABILITY-CommentsClose CommentsPermalink





‘(i) IN GENERAL- Except as provided in clause (ii), an individual is an individual with a disability for a year if the individual (regardless of age)--CommentsClose CommentsPermalink





‘(I) has a medically determinable physical or mental impairment, which results in marked and severe functional limitations, and which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 month, orCommentsClose CommentsPermalink





‘(II) is blind.CommentsClose CommentsPermalink





‘(ii) DISABILITY CERTIFICATION REQUIRED- An individual shall not be treated as an individual with a disability for a year unless the individual--CommentsClose CommentsPermalink





‘(I) is receiving (or, for purposes of title XIX of the Social Security Act, is deemed to be, or treated as, receiving) benefits under the supplemental security income program under title XVI of such Act, or whose benefits under such program are suspended other than by reason of misconduct,CommentsClose CommentsPermalink





‘(II) is receiving disability benefits under title II of such Act, orCommentsClose CommentsPermalink





‘(III) files a disability certification with the Secretary for such year.CommentsClose CommentsPermalink





‘(iii) DISABILITY CERTIFICATION DEFINED- The term ‘disability certification’ means, with respect to an individual, a certification to the satisfaction of the Secretary by the designated beneficiary or the parent or guardian of the designated beneficiary that--CommentsClose CommentsPermalink





‘(I) the individual meets the criteria described in clause (i), andCommentsClose CommentsPermalink





‘(II) includes a copy of the designated beneficiary’s diagnosis, signed by a physician meeting the criteria of section 1861(r)(1) of the Social Security Act.CommentsClose CommentsPermalink





‘(iv) RESTRICTION ON USE OF CERTIFICATION- No inference may be drawn from a disability certification for purposes of establishing eligibility for benefits under title II or XVI of the Social Security Act.CommentsClose CommentsPermalink





‘(4) ROLLOVERS FROM ABLE ACCOUNTS- The limits on contributions pursuant to subsection (b)(6) 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,CommentsClose 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), orCommentsClose CommentsPermalink





‘(C) a qualified tuition program--CommentsClose CommentsPermalink





‘(i) for the benefit of the designated beneficiary, orCommentsClose CommentsPermalink





‘(ii) to the credit of another designated beneficiary under a qualified tuition program who is a member of the family of the designated beneficiary with respect to which the distribution was made.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) TRANSFER TO STATE- Subject to any outstanding payments due for qualified disability expenses, in the case that the designated beneficiary dies or ceases to be an individual with a disability, all amounts remaining in the qualified ABLE account not in excess of the amount equal to the total medical assistance paid for the designated beneficiary after the establishment of the account, net of any premiums paid from the account or paid by or on behalf of the beneficiary to a Medicaid Buy-In program, under any State Medicaid plan established under title XIX of the Social Security Act shall be distributed to such State upon filing of a claim for payment by such State. For purposes of this paragraph, the State shall be a creditor of an ABLE account and not a beneficiary. Subsection (c)(3) shall not apply to a distribution under the preceding sentence.CommentsClose CommentsPermalink





‘(6) REGULATIONS- Not later than 6 months after the date of the enactment of this section, the Secretary may prescribe such regulations or other guidance as the Secretary determines necessary or appropriate to carry out the purposes of this section, including regulations to prevent fraud and abuse with respect to amounts claimed as qualified disability expenses.’.CommentsClose CommentsPermalink





(2) CONFORMING AMENDMENT- Paragraph (2) of section 6693(a) of the Internal Revenue Code of 1986 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 529(d) by reason of 529(f) (relating to ABLE accounts).’.CommentsClose CommentsPermalink





(b) Annual Reports-CommentsClose CommentsPermalink





(1) IN GENERAL- The Secretary of the Treasury shall report annually to Congress on the usage of ABLE accounts under section 529(f) 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 account,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. TREATMENT OF ABLE ACCOUNTS UNDER CERTAIN FEDERAL PROGRAMS.

(a) 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 (as defined in section 529(f) of the Internal Revenue Code of 1986) of such individual, and any distribution for qualified disability expenses (as defined in paragraph (3) of such section) 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, except that, in the case of the supplemental security income program under title XVI of the Social Security Act, a distribution for housing expenses (as defined in subparagraph (B)(ii) of such paragraph) shall not be so disregarded, and in the case of such program, only the 1st $100,000 of the amount (including such earnings) in such ABLE account shall be so disregarded.CommentsClose CommentsPermalink





(b) Suspension of SSI Benefits During Periods of Excessive Account Funds-CommentsClose CommentsPermalink





(1) IN GENERAL- The benefits of an individual under the supplemental security income program under title XVI of the Social Security Act shall not be terminated, but shall be suspended, by reason of excess resources of the individual attributable to an amount in the ABLE account (as defined in section 529(f) of the Internal Revenue Code of 1986) of the individual not disregarded under subsection (a) of this section.CommentsClose CommentsPermalink





(2) NO IMPACT ON MEDICAID ELIGIBILITY- An individual who would be receiving payment of such supplemental security income benefits but for the application of the previous sentence shall be treated for purposes of title XIX of the Social Security Act as if the individual continued to be receiving payment of such benefits.CommentsClose CommentsPermalink