“To amend the Internal Revenue Code of 1986 to allow employers to contribute to ABLE accounts in lieu of retirement plan contributions.”
No CRS summary available for this bill.
This section amends the Internal Revenue Code to permit applicable employer defined contribution plans to allow eligible ABLE individuals (i.e., employees eligible for a qualified ABLE program under section 529A, generally those with a disability onset before age 26) to elect that employer contributions otherwise allocable to the plan be contributed instead to the individual's ABLE account, treating such contributions as plan contributions for nondiscrimination and other requirements (e.g., sections 401(a)(4), 401(k), 410). (Thus, working individuals with disabilities may redirect retirement plan contributions to tax-advantaged ABLE accounts—which enable savings for qualified disability expenses without affecting means-tested benefits—avoiding potential loss of such benefits due to plan participation rules.) It further (1) treats employer ABLE contributions as made by the beneficiary, (2) authorizes employer contributions (including matching) to any ABLE program for an eligible employee (up to the annual limit of the greater of $18,000 or the amount under section 219(b)(5)(B)), with Treasury guidance confirming deductibility as compensation under section 162, and (3) disregards such contributions for means-tested federal programs. The amendments generally apply to plan and taxable years beginning after enactment, with clarifications on employer contributions retroactive; Treasury must issue model plan amendments and notify employees of options.