[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 647 Reported in House (RH)]
Union Calendar No. 456
113th CONGRESS
2d Session
H. R. 647
[Report No. 113-614, Part I]
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.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 13, 2013
Mr. Crenshaw (for himself, Mr. Van Hollen, Mrs. McMorris Rodgers, Mr.
Sessions, Mr. Runyan, Mr. Mica, Ms. Tsongas, Mr. Coffman, Mr. Roe of
Tennessee, Mr. Cooper, Mr. Moran, Mr. Harper, Mr. Connolly, Mr.
Sarbanes, Ms. Clarke, Mr. Larsen of Washington, Mr. Gerlach, Mr. Larson
of Connecticut, Mr. Carson of Indiana, Mr. Tonko, Mr. Cicilline, Mr.
Ryan of Ohio, Mr. Young of Florida, Mr. Holt, Mrs. Capps, Mr. Bachus,
Mr. McGovern, Ms. Bonamici, Mr. Matheson, Mr. Miller of Florida, Mr.
Nunnelee, Mr. Stivers, Mr. Womack, Ms. Herrera Beutler, Mr. Johnson of
Ohio, Mrs. Davis of California, Mr. Courtney, Mr. King of New York,
Mrs. Hartzler, Mr. McKinley, Mr. Smith of New Jersey, Mr. Vela, Mr.
Wolf, Mrs. Capito, Mr. Yarmuth, Ms. Brownley of California, Mr. Yoder,
Mr. Rooney, Mr. Marchant, Mrs. Brooks of Indiana, Ms. Norton, Mrs.
Bachmann, Mr. Honda, Mr. Meehan, Mr. Benishek, Mr. Poe of Texas, Mr.
Welch, Mr. Walberg, and Mr. Deutch) 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
concerned
November 12, 2014
Additional sponsors: Ms. Ros-Lehtinen, Mr. Hastings of Florida, Mr.
Meadows, Mr. Schiff, Mr. Capuano, Ms. Duckworth, Mr. Webster of
Florida, Mr. Keating, Mr. Barletta, Mr. Himes, Mr. Langevin, Mr. Payne,
Mr. Diaz-Balart, Mr. Hanna, Ms. Pingree of Maine, Mr. Posey, Mr. Brady
of Pennsylvania, Mr. Clay, Mr. Loebsack, Mr. Markey, Mrs. Roby, Ms.
DeLauro, Mr. Price of North Carolina, Mr. Michaud, Mr. Cohen, Mr.
Lipinski, Mr. Kennedy, Ms. Brown of Florida, Mr. Castro of Texas, Ms.
Eddie Bernice Johnson of Texas, Mr. Messer, Mr. Wenstrup, Mr. Carney,
Mr. McCaul, Mr. Pearce, Mr. Gallego, Mr. Cardenas, Mr. Bucshon, Mr.
Yoho, Ms. Lofgren, Mrs. McCarthy of New York, Mr. Massie, Mr. Al Green
of Texas, Mr. Barber, Mr. Chabot, Mr. Pocan, Mr. Gardner, Mr. Tierney,
Mr. O'Rourke, Mr. Culberson, Ms. Castor of Florida, Mr. Graves of
Missouri, Mr. Veasey, Mr. Hall, Ms. Wasserman Schultz, Mr. Crawford,
Mr. Delaney, Mrs. Blackburn, Mr. Young of Alaska, Mr. Turner, Mr.
Richmond, Mr. Lynch, Mr. Cole, Mr. Lowenthal, Mr. Thompson of
California, Mr. Goodlatte, Mr. Wilson of South Carolina, Mr. Kline,
Mrs. Noem, Mr. Andrews, Mr. Fitzpatrick, Mr. Stutzman, Mr. Fincher, Mr.
Bentivolio, Ms. Moore, Ms. Schakowsky, Mr. Ruppersberger, Mr. Hultgren,
Ms. Esty, Mr. Butterfield, Mr. Latta, Mr. Calvert, Mr. Cummings, Mr.
Rahall, Mr. Gibson, Mr. Rogers of Alabama, Ms. Kuster, Mr. Braley of
Iowa, Mr. Luetkemeyer, Ms. DelBene, Mr. Peters of Michigan, Mr.
Perlmutter, Mr. Duffy, Mr. Murphy of Pennsylvania, Ms. Frankel of
Florida, Mr. Schneider, Mr. Cotton, Mr. Rogers of Kentucky, Ms. Shea-
Porter, Mr. Ribble, Mrs. Lowey, Mr. Gibbs, Ms. McCollum, Mr. Pallone,
Mr. Ben Ray Lujan of New Mexico, Mr. Paulsen, Mrs. Beatty, Mr. Bonner,
Mr. Sires, Mr. Rodney Davis of Illinois, Mr. Huizenga of Michigan, Mr.
Cuellar, Mr. Salmon, Ms. Edwards, Mr. Cassidy, Mr. Southerland, Mr.
Walz, Mr. Nadler, Mr. Doyle, Mr. Blumenauer, Mrs. Carolyn B. Maloney of
New York, Ms. Speier, Mr. Doggett, Ms. Michelle Lujan Grisham of New
Mexico, Mr. Schock, Ms. Roybal-Allard, Mr. Bilirakis, Mr. Latham, Mr.
Wittman, Mr. DeFazio, Mr. Griffin of Arkansas, Mrs. Ellmers, Mr.
Rothfus, Mr. Sensenbrenner, Ms. Waters, Ms. Kaptur, Mr. Thompson of
Pennsylvania, Mr. Jones, Mr. Lance, Mr. McIntyre, Mr. Forbes, Mr.
Owens, Mr. Amodei, Mr. Barr, Ms. Titus, Mr. Palazzo, Mr. Griffith of
Virginia, Mr. Schweikert, Ms. Wilson of Florida, Mr. David Scott of
Georgia, Mr. Rokita, Mr. Nugent, Mr. Polis, Mr. Ross, Mr. Rigell, Mr.
Walden, Mr. Dent, Mr. Grayson, Mr. LaMalfa, Mr. Bishop of Utah, Mr.
Buchanan, Mr. Bishop of Georgia, Mrs. Kirkpatrick, Mr. Carter, Ms.
Sewell of Alabama, Mr. Whitfield, Mr. Smith of Texas, Mr. Holding, Mr.
Fortenberry, Mr. Neugebauer, Mr. Simpson, Mr. Terry, Mr. DeSantis, Mr.
Radel, Mr. Pittenger, Mr. Farenthold, Mr. Pascrell, Mrs. Miller of
Michigan, Mr. Johnson of Georgia, Ms. Fudge, Mr. McDermott, Mr. Neal,
Ms. Granger, Mr. Bishop of New York, Mr. Franks of Arizona, Mr.
Cleaver, Mr. Meeks, Mr. Lewis, Mr. Joyce, Mr. Coble, Mr. Visclosky, Mr.
Horsford, Mr. Farr, Mr. Vargas, Ms. Lee of California, Mr. Cramer, Mr.
Kinzinger of Illinois, Mr. Peterson, Ms. Eshoo, Mr. Peters of
California, Mr. Nunes, Mr. Maffei, Mr. Bera of California, Mr. Huffman,
Ms. Linda T. Sanchez of California, Ms. Sinema, Mr. Rice of South
Carolina, Mr. Ellison, Mr. Murphy of Florida, Mr. Cook, Mr. Jeffries,
Ms. Hahn, Mr. Nolan, Mr. Takano, Mr. Ruiz, Mr. Schrader, Mr. Guthrie,
Mr. Hudson, Mr. Long, Mr. Tipton, Mr. Engel, Ms. Bass, Mr. Garcia, Mr.
Enyart, Mr. Sherman, Mr. Serrano, Mr. Olson, Mr. Jordan, Mr. Heck of
Nevada, Mrs. Walorski, Mr. Broun of Georgia, Mr. Gingrey of Georgia,
Mr. Royce, Mr. McHenry, Mr. Conaway, Mr. Conyers, Mrs. Wagner, Mr.
Fleming, Mr. Grimm, Mr. Stockman, Mr. Israel, Mr. LoBiondo, Mr.
Hinojosa, Mr. Mulvaney, Mr. Austin Scott of Georgia, Mr. Collins of
Georgia, Ms. Jackson Lee, Mr. Daines, Mrs. Napolitano, Mr. Burgess, Mr.
Thornberry, Mr. Shimkus, Mr. Gene Green of Texas, Mr. McNerney, Mr.
Garamendi, Mr. Hurt, Mr. Heck of Washington, Mr. Cartwright, Ms. Chu,
Mr. Kildee, Mr. Westmoreland, Mr. Kilmer, Mrs. Bustos, Mr. Kind, Mrs.
Negrete McLeod, Ms. Loretta Sanchez of California, Mr. Pompeo, Mr.
Marino, Ms. Matsui, Ms. Schwartz, Mr. Crowley, Mr. Swalwell of
California, Ms. Meng, Mr. Sean Patrick Maloney of New York, Ms.
Velazquez, Mr. Valadao, Mr. Costa, Mr. Hastings of Washington, Ms.
Clark of Massachusetts, Mr. Rush, Ms. Jenkins, Mr. Danny K. Davis of
Illinois, Mr. McAllister, Mr. Roskam, Mr. Higgins, Mr. Scalise, Mr.
Gutierrez, Mr. Byrne, Mr. Sam Johnson of Texas, Mr. Quigley, Mr. Kelly
of Pennsylvania, Mr. Reichert, Mrs. Black, Mr. Young of Indiana, Mr.
Pierluisi, Mr. Hunter, Mr. DesJarlais, Mr. Tiberi, Mr. Frelinghuysen,
Ms. Gabbard, Mr. Hensarling, Ms. Slaughter, Mr. Renacci, Mr. Gosar, Mr.
Rangel, Mr. Flores, Mr. Fattah, Mr. Harris, Mr. Duncan of Tennessee,
Mr. Upton, Mr. Sablan, Mr. McKeon, Mr. Williams, Mr. Denham, Mr.
Fleischmann, Mr. Brady of Texas, Mr. Price of Georgia, Mr. McClintock,
Mr. Barton, Mr. Reed, Mr. Jolly, and Mr. Boustany
November 12, 2014
Reported from the Committee on Ways and Means with an amendment
[Strike out all after the enacting clause and insert the part printed
in italic]
November 12, 2014
The Committee on Energy and Commerce discharged; committed to the
Committee of the Whole House on the State of the Union and ordered to
be printed
[For text of introduced bill, see copy of bill as introduced on
February 13, 2013]
_______________________________________________________________________
A BILL
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.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Achieving a Better Life Experience
Act of 2014'' or the ``ABLE Act of 2014''.
SEC. 2. PURPOSES.
The purposes of this Act are as follows:
(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.
(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.
SEC. 3. QUALIFIED ABLE PROGRAMS.
(a) In General.--Subchapter F of chapter 1 of the Internal Revenue
Code of 1986 is amended by inserting after section 529 the following
new section:
``SEC. 529A. QUALIFIED ABLE PROGRAMS.
``(a) General Rule.--A qualified ABLE program shall be exempt from
taxation under this subtitle. Notwithstanding the preceding sentence,
such program shall be subject to the taxes imposed by section 511
(relating to imposition of tax on unrelated business income of
charitable organizations).
``(b) Qualified ABLE Program.--For purposes of this section--
``(1) In general.--The term `qualified ABLE program' means
a program established and maintained by a State, or agency or
instrumentality thereof--
``(A) under which a person may make contributions
for a taxable year, for the benefit of an individual
who is an eligible individual for such taxable year, to
an ABLE account which is established for the purpose of
meeting the qualified disability expenses of the
designated beneficiary of the account,
``(B) which limits a designated beneficiary to 1
ABLE account for purposes of this section,
``(C) which allows for the establishment of an ABLE
account only for a beneficiary who is a resident of
such State or a resident of a contracting State, and
``(D) which meets the other requirements of this
section.
``(2) Cash contributions.--A program shall not be treated
as a qualified ABLE program unless it provides that no
contribution will be accepted--
``(A) unless it is in cash, or
``(B) except in the case of contributions under
subsection (c)(1)(C), if such contribution to an ABLE
account would result in aggregate contributions from
all contributors to the ABLE account for the taxable
year exceeding the amount in effect under section
2503(b) for the calendar year in which the taxable year
begins.
For purposes of this paragraph, rules similar to the rules of
section 408(d)(4) (determined without regard to subparagraph
(B) thereof) shall apply.
``(3) Separate accounting.--A program shall not be treated
as a qualified ABLE program unless it provides separate
accounting for each designated beneficiary.
``(4) No investment direction.--A program shall not be
treated as a qualified ABLE program unless it provides that any
contributor to, or designated beneficiary under, such program
may not directly or indirectly direct the investment of any
contributions to the program (or any earnings thereon).
``(5) No pledging of interest as security.--A program shall
not be treated as a qualified ABLE program if it allows any
interest in the program or any portion thereof to be used as
security for a loan.
``(6) Prohibition on excess contributions.--A program shall
not be treated as a qualified ABLE program unless it provides
adequate safeguards to prevent aggregate contributions on
behalf of a designated beneficiary in excess of the limit
established by the State under section 529(b)(6). For purposes
of the preceding sentence, aggregate contributions include
contributions under any prior qualified ABLE program of any
State or agency or instrumentality thereof.
``(c) Tax Treatment.--
``(1) Distributions.--
``(A) In general.--Any distribution under a
qualified ABLE program shall be includible in the gross
income of the distributee in the manner as provided
under section 72 to the extent not excluded from gross
income under any other provision of this chapter.
``(B) Distributions for qualified disability
expenses.--For purposes of this paragraph, if
distributions from a qualified ABLE program--
``(i) do not exceed the qualified
disability expenses of the designated
beneficiary, no amount shall be includible in
gross income, and
``(ii) in any other case, the amount
otherwise includible in gross income shall be
reduced by an amount which bears the same ratio
to such amount as such expenses bear to such
distributions.
``(C) Change in beneficiaries or programs.--
``(i) Rollovers from able accounts.--
Subparagraph (A) 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 another ABLE
account for the benefit of the same beneficiary
or an eligible individual who is a family
member of the beneficiary.
``(ii) Change in designated
beneficiaries.--Any change in the designated
beneficiary of an interest in a qualified ABLE
program during a taxable year shall not be
treated as a distribution for purposes of
subparagraph (A) if the new beneficiary is an
eligible individual for such taxable year and a
member of the family of the former beneficiary.
``(iii) Limitation on certain rollovers.--
Clause (i) shall not apply to any transfer if
such transfer occurs within 12 months from the
date of a previous transfer to any qualified
ABLE program for the benefit of the designated
beneficiary.
``(D) Operating rules.--For purposes of applying
section 72--
``(i) except to the extent provided by the
Secretary, all distributions during a taxable
year shall be treated as one distribution, and
``(ii) except to the extent provided by the
Secretary, the value of the contract, income on
the contract, and investment in the contract
shall be computed as of the close of the
calendar year in which the taxable year begins.
``(2) Gift tax rules.--For purposes of chapters 12 and 13--
``(A) Contributions.--Any contribution to a
qualified ABLE program on behalf of any designated
beneficiary--
``(i) shall be treated as a completed gift
to such beneficiary which is not a future
interest in property, and
``(ii) shall not be treated as a qualified
transfer under section 2503(e).
``(B) Treatment of distributions.--Except as
provided in subparagraph (C), in no event shall a
distribution from a qualified ABLE program be treated
as a taxable gift.
``(C) Treatment of designation of new
beneficiary.--The taxes imposed by chapters 12 and 13
shall apply to a transfer by reason of a change in the
designated beneficiary under the program (or a
contribution under paragraph (1)(C) to the ABLE account
of a new beneficiary) during any taxable year unless,
as of the beginning of such taxable year, the new
beneficiary is both an eligible individual for such
taxable year and a member of the family of the former
beneficiary.
``(3) Additional tax for distributions not used for
disability expenses.--
``(A) In general.--The tax imposed by this chapter
for any taxable year on any taxpayer who receives a
distribution from a qualified ABLE program which is
includible in gross income shall be increased by 10
percent of the amount which is so includible.
``(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.
``(C) Contributions returned before certain date.--
Subparagraph (A) shall not apply to the distribution of
any contribution made during a taxable year on behalf
of the designated beneficiary if--
``(i) such distribution is received on or
before the day prescribed by law (including
extensions of time) for filing such designated
beneficiary's return for such taxable year, and
``(ii) such distribution is accompanied by
the amount of net income attributable to such
excess contribution.
Any net income described in clause (ii) shall be
included in gross income for the taxable year in which
such excess contribution was made.
``(4) Loss of able account treatment.--If, during any
taxable year of an eligible individual for whose benefit any
ABLE account is established, more than 1 ABLE account for the
benefit of the eligible individual exists at the same time,
each such ABLE account other than the earliest established ABLE
account shall not be treated as an ABLE account as of the first
day of such taxable year.
``(d) Reports.--
``(1) In general.--Each officer or employee having control
of the qualified ABLE program or their designee shall make such
reports regarding such program to the Secretary and to
designated beneficiaries with respect to contributions,
distributions, the return of excess contributions, and such
other matters as the Secretary may require.
``(2) Certain aggregated information.--For research
purposes, the Secretary shall make available to the public
reports containing aggregate information, by diagnosis and
other relevant characteristics, on contributions and
distributions from the qualified ABLE program. In carrying out
the preceding sentence an item may not be made available to the
public if such item can be associated with, or otherwise
identify, directly or indirectly, a particular individual.
``(3) Notice of establishment of able account.--The trustee
of an ABLE account shall submit a notice to the Secretary upon
the establishment of the ABLE account. Such notice shall
contain the name and State of residence of the beneficiary and
such other information as the Secretary may require.
``(4) Electronic distribution statements.--For purposes of
section 4 of the Achieving a Better Life Experience Act of
2014, States shall submit electronically on a monthly basis to
the Commissioner of Social Security, in the manner specified by
the Commissioner, statements on relevant distributions and
account balances from all ABLE accounts.
``(5) Requirements.--The reports and notices required by
paragraphs (1), (2), and (3) 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 by the Secretary.
``(e) Other Definitions and Special Rules.--For purposes of this
section--
``(1) Eligible individual.--
``(A) In general.--An individual is an eligible
individual for a taxable year if during such taxable
year--
``(i) a disability certification with
respect to such individual is filed with the
Secretary for such taxable year, or
``(ii) the individual has been determined
for purposes of section 223 or 1614 of the
Social Security Act (42 U.S.C. 421, 1382c) to
meet the criteria of subparagraph (B) for such
taxable year.
``(B) Criteria.--An individual meets the criteria
of this subparagraph for a taxable year if--
``(i) in the case of an individual who has
not attained age 19 as of the close of the
taxable year, the individual is either blind
(within the meaning of section 1614(a)(2) of
the Social Security Act (42 U.S.C.
1382c(a)(2))) or disabled within the meaning of
section 1614(a)(3)(C) of such Act (42 U.S.C.
1382c(a)(3)(C)), or
``(ii) the individual--
``(I) is either blind (within the
meaning of section 1614(a)(2) of such
Act (42 U.S.C. 1382c(a)(2))) or
disabled within the meaning of section
1614(a)(3)(A) of such Act, and
``(II) such blindness or disability
occurred before the date on which the
individual attained age 26.
``(2) Disability certification.--
``(A) In general.--The term `disability
certification' means, with respect to an eligible
individual, a certification to the satisfaction of the
Secretary by the eligible individual or the parent or
guardian of the eligible individual that--
``(i) the individual meets the criteria
described in paragraph (1)(B), and
``(ii) includes a copy of the individual's
diagnosis relating to the individual's relevant
impairment or impairments, signed by a
physician meeting the criteria of section
1861(r)(1) of the Social Security Act.
``(B) Restriction on use of certification.--No
inference may be drawn from a disability certification
for purposes of establishing eligibility for benefits
under title II, XVI, or XIX of the Social Security Act.
``(3) Designated beneficiary.--The term `designated
beneficiary' in connection with an ABLE account established
under a qualified ABLE program means--
``(A) the eligible individual designated at the
commencement of participation in the qualified ABLE
program as the beneficiary of amounts paid (or to be
paid) to the program, and
``(B) in the case of a change in beneficiaries
described in subparagraph (C)(ii) of subsection (c)(1),
the individual who is the new beneficiary.
``(4) Member of family.--The term `member of the family'
means, with respect to any designated beneficiary, an
individual who bears a relationship to such beneficiary which
is described in subparagraph section 152(d)(2)(B). For purposes
of the preceding sentence, a rule similar to the rule of
section 152(f)(1)(B) shall apply.
``(5) Qualified disability expenses.--The term `qualified
disability expenses' means any expenses related to the eligible
individual's blindness or disability which are made for the
benefit of an eligible individual who is the designated
beneficiary, including the following expenses: education,
housing, transportation, employment training and support,
assistive technology and personal support services, health,
prevention and wellness, financial management and
administrative services, legal fees, expenses for oversight and
monitoring, funeral and burial expenses, and other expenses,
which are approved by the Secretary under regulations and
consistent with the purposes of this section.
``(6) ABLE account.--The term `ABLE account' means an
account established and maintained under a qualified ABLE
program.
``(7) Contracting state.--The term `contracting State'
means a State without a qualified ABLE program which has
entered into a contract with a State with a qualified ABLE
program to provide residents of the contracting State access to
a qualified ABLE program.
``(f) Transfer to State.--Subject to any outstanding payments due
for qualified disability expenses, in the case that the designated
beneficiary dies, 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.
``(g) Regulations.--The Secretary shall prescribe such regulations
or other guidance as the Secretary determines necessary or appropriate
to carry out the purposes of this section, including regulations--
``(1) to enforce the 1 ABLE account per eligible individual
limit,
``(2) providing for the information required to be
presented to open an ABLE account,
``(3) to generally define qualified disability expenses,
``(4) developed in consultation with the Commissioner of
Social Security, relating to disability certifications and
determinations of disability, including those conditions deemed
to meet the requirements of subsection (e)(1)(B)(ii),
``(5) to prevent fraud and abuse with respect to amounts
claimed as qualified disability expenses,
``(6) under chapters 11, 12, and 13 of this title, and
``(7) to allow for transfers from one ABLE account to
another ABLE account in cases in which there is a change in the
State of residence of an eligible individual.''.
(b) Tax on Excess Contributions.--
(1) In general.--Subsection (a) of section 4973 of the
Internal Revenue Code of 1986 (relating to tax on excess
contributions to certain tax-favored accounts and annuities) 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:
``(6) an ABLE account (within the meaning of section
529A),''.
(2) Excess contribution.--Section 4973 of the Internal
Revenue Code of 1986 is amended by adding at the end the
following new subsection:
``(h) Excess Contributions to ABLE Account.--For purposes of this
section--
``(1) In general.--In the case of an ABLE account (within
the meaning of section 529A), the term `excess contributions'
means the amount by which the amount contributed for the
taxable year to such account (other than contributions under
section 529A(c)(1)(C)) exceeds the contribution limit under
section 529A(b)(2)(B).
``(2) Special rule.--For purposes of this subsection, any
contribution which is distributed out of the ABLE account in a
distribution to which the last sentence of section 529A(b)(2)
applies shall be treated as an amount not contributed.''.
(c) Penalty for Failure to File Reports.--Section 6693(a)(2) of the
Internal Revenue Code of 1986 is amended by striking ``and'' at the end
of subparagraph (D), by redesignating subparagraph (E) as subparagraph
(F), and by inserting after subparagraph (D) the following:
``(E) section 529A(d) (relating to qualified ABLE
programs), and''.
(d) Conforming Amendments.--
(1) Section 26(b)(2) of the Internal Revenue Code of 1986
is amended by striking ``and'' at the end of subparagraph (W),
by striking the period at the end of subparagraph (X) and
inserting ``, and'', and by inserting after subparagraph (X)
the following:
``(Y) section 529A(c)(3)(A) (relating to additional
tax on ABLE account distributions not used for
qualified disability expenses).''.
(2) The heading for part VIII of subchapter F of chapter 1
of the Internal Revenue Code of 1986 is amended by striking
``higher education'' and inserting ``certain''.
(3) The item in the table of parts for subchapter F of
chapter 1 of the Internal Revenue Code of 1986 relating to part
VIII is amended to read as follows:
``Part VIII. Certain Savings Entities.''.
(4) The table of sections for part VIII of subchapter F of
chapter 1 of the Internal Revenue Code of 1986 is amended by
inserting after the item relating to section 529 the following
new item:
``Sec. 529A. Qualified ABLE programs.''.
(e) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2014.
(2) Regulations.--The Secretary of the Treasury (or the
Secretary's designee) shall promulgate the regulations or other
guidance required under section 529A(g) of the Internal Revenue
Code of 1986, as added by subsection (a), not later than 6
months after the date of the enactment of this Act.
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 the ABLE
account (within the meaning of section 529A of the Internal Revenue
Code of 1986) of such individual, and any distribution for qualified
disability expenses (as defined in subsection (e)(5) 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 (within the meaning
of such subsection) 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.
(b) Suspension of SSI Benefits During Periods of Excessive Account
Funds.--
(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 (within the
meaning of section 529A of the Internal Revenue Code of 1986)
of the individual not disregarded under subsection (a) of this
section.
(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.
(c) Effective Date.--This section shall take effect on the date of
the enactment of this Act.
Union Calendar No. 456
113th CONGRESS
2d Session
H. R. 647
[Report No. 113-614, Part I]
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A BILL
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.
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November 12, 2014
Reported from the Committee on Ways and Means with an amendment
November 12, 2014
The Committee on Energy and Commerce discharged; committed to the
Committee of the Whole House on the State of the Union and ordered to
be printed