Achieving a Better Life Experience Act of 2013 or the ABLE Act of 2013 - Amends the Internal Revenue Code to establish tax-exempt ABLE accounts to assist an individual with a disability in building an account to pay for qualified disability expenses. Defines "qualified disability expenses" to include expenses for education, including higher education expenses, a primary residence, transportation, obtaining and maintaining employment, health and wellness, and other personal support expenses.
Treats a qualified ABLE program and an ABLE account in the same manner as a qualified tuition program for income tax purposes (i.e., allowing a tax exemption for such program and an exclusion from gross income of amounts attributable to a contributor to or a beneficiary of a program account). Defines "qualified ABLE program" as a program established and maintained by a state agency under which a person may make contributions to an ABLE account established to pay for qualified disability expenses.
Requires amounts in ABLE accounts to be disregarded in determining eligibility for Medicaid and other means-tested federal programs. Suspends the payment of supplemental security income benefits under title XVI (Supplemental Security Income) of the Social Security Act to an individual during any period in which such individual has excess resources attributable to an ABLE account.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 313 Introduced in Senate (IS)]
113th CONGRESS
1st Session
S. 313
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 SENATE OF THE UNITED STATES
February 13, 2013
Mr. Casey (for himself, Mr. Burr, Mr. Harkin, Mr. Cardin, Mr. Rubio,
Mr. Franken, Mr. Moran, Mr. Reed, Mr. Leahy, Mrs. Boxer, Mr. Brown, Mr.
Sanders, Mr. Blumenthal, Ms. Baldwin, Mr. Blunt, Mr. Coons, Mr.
Johanns, and Mrs. Gillibrand) introduced the following bill; which was
read twice and referred to the Committee on Finance
_______________________________________________________________________
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 2013'' or the ``ABLE Act of 2013''.
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. ABLE ACCOUNTS.
(a) Establishment.--
(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:
``(f) ABLE Accounts.--
``(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--
``(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,
``(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, and
``(C) maximum contributions shall be no higher than
the limit established by the State for their regular
529 account.
``(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--
``(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,
``(B) which meets the requirements of the preceding
subsections of this section (as modified by this
subsection), determined by substituting--
``(i) `qualified ABLE program' for
`qualified tuition program', and
``(ii) `ABLE account' for `account', and
``(C) which meets the other requirements of this
subsection.
``(3) Qualified disability expenses.--For purposes of this
subsection--
``(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.
``(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:
``(i) Education.--Expenses for education,
including tuition for preschool thru post-
secondary education, which shall include higher
education expenses (as defined by subsection
(e)(3)) and expenses for books, supplies, and
educational materials related to preschool and
secondary education, tutors, and special
education services.
``(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.
``(iii) Transportation.--Expenses for
transportation, including the use of mass
transit, the purchase or modification of
vehicles, and moving expenses.
``(iv) Employment support.--Expenses
related to obtaining and maintaining
employment, including job-related training,
assistive technology, and personal assistance
supports.
``(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.
``(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.
``(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).
``(viii) Other approved expenses.--Any
other expenses which are approved by the
Secretary under regulations and consistent with
the purposes of this section.
``(C) Individual with a disability.--
``(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)--
``(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, or
``(II) is blind.
``(ii) Disability certification required.--
An individual shall not be treated as an
individual with a disability for a year unless
the individual--
``(I) is receiving (or, for
purposes of title XIX of the Social
Security Act, is deemed to be, or
treated as, receiving by the State
Medicaid Agency) 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,
``(II) is receiving disability
benefits under title II of such Act, or
``(III) files a disability
certification with the Secretary for
such year.
``(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--
``(I) the individual meets the
criteria described in clause (i), and
``(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.
``(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, XVI, or XIX of the Social Security
Act.
``(4) Rollovers from able accounts.--Subsection (c)(3)(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--
``(A) another ABLE account for the benefit of--
``(i) the same beneficiary, or
``(ii) an individual with a disability who
is a family member of the beneficiary,
``(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), or
``(C) a qualified tuition program--
``(i) for the benefit of the designated
beneficiary, or
``(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.
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.
``(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.
``(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.''.
(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:
``(F) section 529(d) by reason of 529(f) (relating
to ABLE accounts).''.
(b) Annual Reports.--
(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.
(2) Contents of report.--Any report under paragraph (1) may
include--
(A) the number of people with an ABLE account,
(B) the total amount of contributions to such
accounts,
(C) the total amount and nature of distributions
from such accounts,
(D) issues relating to the abuse of such accounts,
if any, and
(E) the amounts repaid from such accounts to State
Medicaid programs established under title XIX of the
Social Security Act.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning 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 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.
(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 (as defined in
section 529(f) 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.
<all>
Introduced in Senate
Read twice and referred to the Committee on Finance.
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