S. 4498 — ABLE Tomorrow Act

This section provides congressional findings on the elevated poverty rates among people with disabilities, who are more than two and a half times as likely to live in poverty as those without disabilities. It describes the Stephen Beck, Jr., Achieving a Better Life Experience Act of 2014, which established qualified ABLE programs to allow eligible individuals to open tax-advantaged savings accounts for disability-related expenses without losing eligibility for certain federal benefits. The section also notes subsequent legislative expansions, including raising the disability onset age to before 46 (from before 26), permitting additional contributions by working account holders, creating a Saver’s credit for ABLE contributions, and allowing 529 account rollovers, and projects that the number of eligible individuals will nearly double as SECURE 2.0 Act amendments take effect beginning in January 2026.

This section states the purposes of the Act to encourage and assist individuals with disabilities who have fewer resources to save using ABLE accounts, increase uptake and continued utilization of ABLE accounts by people with disabilities (especially Medicaid and supplemental security income recipients), and help ensure the success and financial stability of ABLE account holders and the ABLE account program.

This section prohibits states from seeking adjustment or recovery of any medical assistance correctly paid under a State Medicaid plan from the ABLE account of a designated beneficiary, regardless of whether the account is part of the beneficiary’s estate. (Thus, the provision overrides section 1917(b) of the Social Security Act and eliminates prior authority for states to recover such costs from ABLE accounts upon the beneficiary’s death.)

This section repeals the limitation on rollovers from qualified tuition programs under section 529(c)(3)(C)(i) and establishes an exception to the annual contribution limit for ABLE accounts under section 529A(b)(2)(B) for certain lump-sum payments. (1) The exception applies to contributions to a qualified ABLE program from a third-party trust, proceeds of a life insurance contract received by the designated beneficiary, or a tax-free distribution from a qualified tuition program under section 529(c)(3)(C)(i)(III). (2) The exception applies only once per qualified beneficiary across all taxable years.

This section delays the suspension of benefits under the Stephen Beck, Jr., ABLE Act of 2014 by providing that the suspension begins with benefits payable for the first calendar month after the 2-month period that starts on the date the individual receives notice from the Commissioner of Social Security.

This section permits applicable employer defined contribution plans to allow eligible ABLE individuals to elect that employer contributions be made instead to a qualified ABLE program under section 529A. It treats such contributions as made by the designated beneficiary for ABLE account purposes, applies nondiscrimination rules as if the contributions were made to the retirement plan, and requires universal availability of the election to all eligible ABLE individuals. This section also clarifies that employers may contribute to any qualified ABLE program for which an eligible individual is the designated beneficiary, including matching contributions. It directs the Secretary of the Treasury to amend regulations under section 162 within one year of enactment to confirm that such contributions are treated as reasonable compensation (provided they do not exceed the annual ABLE contribution limit) and to update employer publications to notify employees of this option. The amendments apply to plan and taxable years beginning after the date of enactment, except that the clarifications in subsections (c) and (d)(1) apply to years beginning before, on, or after enactment.

This section directs the Social Security Administration to inform recipients of Supplemental Security Income benefits, disability insurance benefits under section 223 of the Social Security Act, or monthly insurance benefits based on disability about the existence of qualified ABLE programs under section 529A of the Internal Revenue Code, resources such as the ABLE National Resource Center, and instructions for opening an ABLE account, beginning 180 days after enactment and upon eligibility redetermination or resource-related overpayment findings. It further requires the Department of Veterans Affairs to inform veterans and eligible dependents participating in VA-administered programs about qualified ABLE programs and such resources at the time of first participation or receipt of benefits. The section also mandates that the Department of Housing and Urban Development ensure participants in the section 811 supportive housing program for persons with disabilities and the section 8(o) tenant-based assistance program receive this information upon enrollment, directs qualified nonprofit agencies producing products or services for the Federal Government under chapter 85 of title 41, United States Code, to provide the same information upon enrolling individuals in such programs, and requires State Medicaid and CHIP agencies to inform individuals about qualified ABLE programs upon initial enrollment for medical assistance.

This section establishes ABLE awareness grants to promote the availability of ABLE programs and encourage the establishment of ABLE accounts for eligible individuals with disabilities. Eligible entities, including states, Indian tribal governments, and consortia thereof, may use the grants for media buys, conferences, and other outreach activities, and must collect data on the number of accounts established as a result; the section authorizes appropriations of $50,000,000 for each of fiscal years 2027 through 2031.