ABLE MATCH (Making Able a Tool to Combat Hardship) Act
This bill allows beneficiaries of ABLE (Achieving a Better Life Experience) accounts a refundable tax credit to match their contributions to such accounts. The amount of such credit may not exceed $2,000.
The bill also requires demographic reporting (e.g., race, gender, disability type) with respect to ABLE accounts and directs the Department of the Treasury to award grants to states for promoting such accounts and for making matching payments of contributions to such accounts.
[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 2522 Introduced in Senate (IS)]
<DOC>
118th CONGRESS
1st Session
S. 2522
To amend the Internal Revenue Code of 1986 to provide matching payments
for ABLE account contributions by certain individuals, and for other
purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 26, 2023
Mr. Casey (for himself, Mr. Wyden, Ms. Klobuchar, Mr. Sanders, and Ms.
Duckworth) 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 matching payments
for ABLE account contributions by certain individuals, 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 ``ABLE MATCH (Making Able a Tool to
Combat Hardship) Act''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) People with disabilities are more than twice as likely
to live in poverty than people without disabilities.
(2) Households containing an adult with a disability that
limits their ability to work requires, on average, 28 percent
more income to obtain the same standard of living as similar
households without a member with a disability.
(3) The average income of households that include any
working-age people with disabilities is $27,500 less than the
average household income of people without disabilities.
(4) The Stephen Beck, Jr., Achieving a Better Life
Experience Act of 2014 provided for qualified ABLE programs,
which provided eligible people with disabilities the
opportunity to open tax-advantaged savings accounts without the
risk of losing the benefits they need to participate in
society.
(5) As of March 2023, there were 144,068 ABLE accounts open
in the United States with an average balance of $9,715.
SEC. 3. PURPOSES.
The purposes of this Act are--
(1) to encourage and assist individuals with disabilities
with fewer resources to save using ABLE accounts;
(2) to increase uptake and continued utilization of ABLE
accounts by people with disabilities, especially those
individuals receiving benefits under the Medicaid program
established under title XIX of the Social Security Act and the
program for supplemental security income benefits established
under title XVI of such Act; and
(3) to provide for a Federal match for new and existing
ABLE accounts held by individuals with an annual income less
than 200 percent of the Federal poverty limit.
SEC. 4. MATCHING PAYMENTS FOR ABLE ACCOUNT CONTRIBUTIONS BY CERTAIN
INDIVIDUALS.
(a) In General.--Subchapter B of chapter 65 of the Internal Revenue
Code of 1986 is amended by adding at the end the following new section:
``SEC. 6434. MATCHING PAYMENTS FOR ABLE ACCOUNT CONTRIBUTIONS BY
CERTAIN INDIVIDUALS.
``(a) In General.--
``(1) Allowance of credit.--Any individual who is the
designated beneficiary of an ABLE account as of the last day of
the taxable year and who makes qualified ABLE account
contributions for such taxable year shall be allowed a credit
for such taxable year in an amount equal to the applicable
percentage of so much of the qualified ABLE account
contributions made by such individual for the taxable year as
does not exceed $2,000.
``(2) Payment of credit.--
``(A) In general.--The credit under this section
shall be--
``(i) treated as allowed by subpart C of
part IV of subchapter A of chapter 1, and
``(ii) paid by the Secretary as a
contribution (as soon as practicable after the
individual has filed a tax return making a
claim for such credit for the taxable year) to
the ABLE account of the individual.
``(B) Exception.--In the case of an individual who
elects the application of this subparagraph and with
respect to whom the credit determined under paragraph
(1) is greater than zero but less than $50 for the
taxable year, subparagraph (A)(ii) shall not apply.
``(b) Overall Limitation.--The amount of the credit allowed under
this section with respect to any individual shall not exceed the excess
of--
``(1) the amount in effect under section 529A(b)(2)(B) for
the taxable year, over
``(2) the amount of contributions made to the ABLE account
of the individual for such taxable year.
``(c) Applicable Percentage.--For purposes of this section--
``(1) In general.--Except as provided in paragraph (2), the
applicable percentage is 100 percent.
``(2) Phaseout.--The percentage under paragraph (1) shall
be reduced (but not below zero) by the number of percentage
points which bears the same ratio to 100 percentage points as--
``(A) the excess of--
``(i) the taxpayer's modified adjusted
gross income for such taxable year, over
``(ii) the applicable dollar amount, bears
to
``(B) $20,000.
If any reduction determined under this paragraph is not a whole
percentage point, such reduction shall be rounded to the next
lowest whole percentage point.
``(3) Applicable dollar amount.--The applicable dollar
amount is--
``(A) in the case of a joint return, $56,000,
``(B) in the case of a head of household (as
defined in section 2(b)), \3/4\ of the amount
applicable under subparagraph (A), and
``(C) in any other case, \1/2\ of the amount
applicable under subparagraph (A).
``(d) Qualified ABLE Account Contributions.--For purposes of this
section--
``(1) In general.--The term `qualified ABLE account
contributions' means, with respect to any taxable year, the
amount of contributions made by the individual to the ABLE
account of which such individual is the designated beneficiary.
Such term shall not include any amount attributable to a
payment under subsection (a)(2).
``(2) Reduction for certain distributions.--
``(A) In general.--The qualified ABLE account
contributions determined under paragraph (1) for a
taxable year shall be reduced (but not below zero) by
the aggregate distributions received by the individual
during the testing period from the ABLE account.
``(B) Testing period.--For purposes of subparagraph
(A), the testing period, with respect to a taxable
year, is the period which includes--
``(i) such taxable year,
``(ii) the 2 preceding taxable years, and
``(iii) the period after such taxable year
and before the due date (including extensions)
for filing the return of tax for such taxable
year.
``(C) Excepted distributions.--There shall not be
taken into account under subparagraph (A) the amount of
distributions under a qualified ABLE program (within
the meaning of section 529A) that is equal to amounts
not included in gross income with respect to such
distributions under section 529A(c)(1)(B) (relating to
distributions for qualified disability expenses).
``(D) Treatment of distributions received by spouse
of individual.--For purposes of determining
distributions received by an individual under
subparagraph (A) for any taxable year, any distribution
received by the spouse of such individual shall be
treated as received by such individual if such
individual and spouse file a joint return for such
taxable year and for the taxable year during which the
spouse receives the distribution.
``(e) ABLE Account.--For purposes of this section, the term `ABLE
account' has the meaning given such term under section 529A.
``(f) Other Definitions and Special Rules.--
``(1) Modified adjusted gross income.--For purposes of this
section, the term `modified adjusted gross income' means
adjusted gross income determined without regard to sections
911, 931, and 933.
``(2) Erroneous credits.--
``(A) In general.--If any contribution is
erroneously paid under subsection (a)(2), including a
payment that is not made to an ABLE account, the amount
of such erroneous payment shall be treated as an
underpayment of tax (other than for purposes of part II
of subchapter A of chapter 68) for the taxable year in
which the Secretary determines the payment is
erroneous.
``(B) Distribution of erroneous credits.--In the
case of a contribution to which subparagraph (A)
applies, section 72 shall not apply to the distribution
of such contribution (and any income attributable
thereto) if such distribution is received not later
than the day prescribed by law (including extensions of
time) for filing the individual's return for such
taxable year.
``(3) Exception from reduction or offset.--Any payment made
to any individual under this section shall not be--
``(A) subject to reduction or offset pursuant to
subsection (c), (d), (e), or (f) of section 6402 or any
similar authority permitting offset, or
``(B) reduced or offset by other assessed Federal
taxes that would otherwise be subject to levy or
collection.
``(g) Inflation Adjustments.--
``(1) In general.--In the case of any taxable year
beginning in a calendar year after 2027, the $56,000 amount in
subsection (c)(3)(A) shall be increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(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 2026' for `calendar year 2016' in
subparagraph (A)(ii) thereof.
``(2) Rounding.--Any increase determined under paragraph
(1) shall be rounded to the nearest multiple of $1,000.''.
(b) Treatment of Certain Possessions.--
(1) Payments to possessions with mirror code tax systems.--
The Secretary of the Treasury shall pay to each possession of
the United States which has a mirror code tax system amounts
equal to the loss (if any) to that possession by reason of the
amendments made by this section. Such amounts shall be
determined by the Secretary of the Treasury based on
information provided by the government of the respective
possession.
(2) Payments to other possessions.--The Secretary of the
Treasury shall pay to each possession of the United States
which does not have a mirror code tax system amounts estimated
by the Secretary of the Treasury as being equal to the
aggregate benefits (if any) that would have been provided to
residents of such possession by reason of the amendments made
by this section if a mirror code tax system had been in effect
in such possession. The preceding sentence shall not apply
unless the respective possession has a plan, which has been
approved by the Secretary of the Treasury, under which such
possession will promptly distribute such payments to its
residents.
(3) Coordination with credit allowed against united states
income taxes.--No credit shall be allowed against United States
income taxes under section 6434 of the Internal Revenue Code of
1986 (as added by this section) to any person--
(A) to whom a credit is allowed against taxes
imposed by the possession by reason of the amendments
made by this section, or
(B) who is eligible for a payment under a plan
described in paragraph (2).
(4) Mirror code tax system.--For purposes of this
subsection, the term ``mirror code tax system'' means, with
respect to any possession of the United States, the income tax
system of such possession if the income tax liability of the
residents of such possession under such system is determined by
reference to the income tax laws of the United States as if
such possession were the United States.
(5) Treatment of payments.--For purposes of section 1324 of
title 31, United States Code, the payments under this
subsection shall be treated in the same manner as a refund due
from a credit provision referred to in subsection (b)(2) of
such section.
(c) Deficiencies.--Section 6211(b)(4) of the Internal Revenue Code
of 1986 is amended by striking ``and 6433'' and inserting ``6433, and
6434''.
(d) Payment Authority.--Section 1324(b)(2) of title 31, United
States Code, is amended by striking ``or 6433'' and inserting ``6433,
or 6434''.
(e) Conforming Amendments.--
(1) Subpart A of part IV of subchapter A of chapter 1 of
the Internal Revenue Code of 1986 is amended by striking
section 25B (and the item related to such section in the table
of sections for such subpart).
(2) The table of sections for subchapter B of chapter 65 of
such Code is amended by adding at the end the following new
item:
``Sec. 6434. Matching payments for ABLE account contributions by
certain individuals.''.
(f) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2026.
SEC. 5. DEMOGRAPHIC REPORTING WITH RESPECT TO ABLE ACCOUNTS.
(a) In General.--Section 529A(d)(1) of the Internal Revenue Code of
1986 is amended by adding at the end the following new sentence: ``In
addition to the information required under the preceding sentence, each
officer or employee having control of the qualified ABLE program of
their designee shall include in reports provided to the Secretary
demographic information (including race, gender, and disability type)
relating to the designated beneficiaries of ABLE accounts under the
program.''.
(b) Effective Date.--The amendment made by this section shall apply
to reports made after the date of the enactment of this section.
SEC. 6. GRANTS TO PROMOTE USE OF ABLE ACCOUNTS AND THE MATCHING
CONTRIBUTION CREDIT.
(a) In General.--The Secretary of the Treasury (or the Secretary's
delegate) may award grants to States to enable States to promote ABLE
accounts (as defined in section 529A(e) of the Internal Revenue Code of
1986) and matching payments for contributions to such accounts (as
provided under section 6434 of such Code, as added by this Act).
(b) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section $5,000,000 for each of fiscal
years 2025 through 2029.
<all>
Introduced in Senate
Read twice and referred to the Committee on Finance.
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