I 

112TH CONGRESS 

1ST SESSION H. R. 3423 

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 

NOVEMBER 15, 2011 

Mr. CRENSHAW (for himself, Mr. VAN HOLLEN, Mrs. MCMORRIS RODGERS, 

Mr. PAUL, Mr. HARPER, Mr. YOUNG of Florida, Mr. ROGERS of Kentucky, Mr. DEUTCH, Mr. CARNAHAN, Mr. BISHOP of New York, Mr. 

HOLT, Mr. SESSIONS, Mr. FRANK of Massachusetts, Mr. BURTON of Indiana, Ms. NORTON, Mr. MICHAUD, Mr. TOWNS, Mrs. EMERSON, Mr. 

DIAZ-BALART, Mr. WOLF, Mr. LANGEVIN, Mr. KLINE, Mr. VISCLOSKY, 

Mr. CONNOLLY of Virginia, Mr. KING of New York, Mr. POE of Texas, 

Mr. ROTHMAN of New Jersey, Mr. GALLEGLY, and Mr. MILLER of Florida) 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 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Achieving a Better 

3 Life Experience Act of 2011’’ or the ‘‘ABLE Act of 

4 2011’’. 

5 SEC. 2. PURPOSES. 

6 The purposes of this Act are as follows: 

7 (1) To encourage and assist individuals and 

8 families in saving private funds for the purpose of 

9 supporting individuals with disabilities to maintain 

10 health, independence, and quality of life. 

11 (2) To provide secure funding for disability-re12 lated expenses on behalf of designated beneficiaries 

13 with disabilities that will supplement, but not sup14 plant, benefits provided through private insurance, 

15 the Medicaid program under title XIX of the Social 

16 Security Act, the supplemental security income pro17 gram under title XVI of such Act, the beneficiary’s 

18 employment, and other sources. 

19 SEC. 3. ABLE ACCOUNTS. 

20 (a) ESTABLISHMENT.— 

21 (1) IN GENERAL.—Section 529 of the Internal 

22 Revenue Code of 1986 is amended by redesignating 

23 subsection (f) as subsection (g) and by inserting 

24 after subsection (e) the following new subsection: 

25 ‘‘(f) ABLE ACCOUNTS.— 


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1 ‘‘(1) GENERAL RULES.—For purposes of any 

2 other provision of law with respect to a qualified 

3 ABLE program and an ABLE account, except as 

4 otherwise provided in this subsection— 

5 ‘‘(A) a qualified ABLE program and an 

6 ABLE account shall be treated in the same 

7 manner as a qualified tuition program and an 

8 account described in subsection (b)(1)(A)(ii), 

9 respectively, are treated, and 

10 ‘‘(B) qualified disability expenses with re11 spect to a program or account described in sub12 paragraph (A) shall be treated in the same 

13 manner as qualified higher education expenses 

14 are treated. 

15 ‘‘(2) QUALIFIED ABLE PROGRAM.—For pur16 poses of this subsection, the term ‘qualified ABLE 

17 program’ means a program established and main18 tained by a State or agency or instrumentality there19 of— 

20 ‘‘(A) under which a person may make con21 tributions to an ABLE account which is estab22 lished for the purpose of meeting the qualified 

23 disability expenses of the designated beneficiary 

24 of the account, 


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1 ‘‘(B) which meets the requirements of the 

2 preceding subsections of this section (as modi3 fied by this subsection), determined by sub4 stituting— 

5 ‘‘(i) ‘qualified ABLE program’ for 

6 ‘qualified tuition program’, and 

7 ‘‘(ii) ‘ABLE account’ for ‘account’, 

8 and 

9 ‘‘(C) which meets the other requirements 

10 of this subsection. 

11 ‘‘(3) QUALIFIED DISABILITY EXPENSES.—For 

12 purposes of this subsection— 

13 ‘‘(A) IN GENERAL.—The term ‘qualified 

14 disability expenses’ means any expenses which 

15 are made for the benefit of an individual with 

16 a disability who is a designated beneficiary. 

17 ‘‘(B) EXPENSES INCLUDED.—The fol18 lowing expenses shall be qualified disability ex19 penses if such expenses are made for the benefit 

20 of an individual with a disability who is a des21 ignated beneficiary and are related to such dis22 ability: 

23 ‘‘(i) EDUCATION.—Expenses for edu24 cation, including tuition for preschool thru 

25 post-secondary education, books, supplies, 


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1 and educational materials related to such 

2 education, tutors, and special education 

3 services. 

4 ‘‘(ii) HOUSING.—Expenses for a pri5 mary residence, including rent, purchase of 

6 a primary residence or an interest in a pri7 mary residence, mortgage payments, real 

8 property taxes, and utility charges. 

9 ‘‘(iii) TRANSPORTATION.—Expenses 

10 for transportation, including the use of 

11 mass transit, the purchase or modification 

12 of vehicles, and moving expenses. 

13 ‘‘(iv) EMPLOYMENT SUPPORT.—Ex14 penses related to obtaining and maintain15 ing employment, including job-related 

16 training, assistive technology, and personal 

17 assistance supports. 

18 ‘‘(v) HEALTH, PREVENTION, AND

19 WELLNESS.—Expenses for health and 

20 wellness, including premiums for health in21 surance, mental health, medical, vision, 

22 and dental expenses, habilitation and reha23 bilitation services, durable medical equip24 ment, therapy, respite care, long term serv25 ices and supports, nutritional management, 


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1 communication services and devices, adapt2 ive equipment, assistive technology, and 

3 personal assistance. 

4 ‘‘(vi) MISCELLANEOUS EXPENSES.— 

5 Financial management and administrative 

6 services; legal fees; expenses for oversight; 

7 monitoring; home improvements, and modi8 fications, maintenance and repairs, at pri9 mary residence; or funeral and burial ex10 penses. 

11 ‘‘(vii) ASSISTIVE TECHNOLOGY AND

12 PERSONAL SUPPORT SERVICES.—Expenses 

13 for assistive technology and personal sup14 port with respect to any item described in 

15 clauses (i) through (vi). 

16 ‘‘(viii) OTHER APPROVED EX17 PENSES.—Any other expenses which are 

18 approved by the Secretary under regula19 tions and consistent with the purposes of 

20 this section. 

21 ‘‘(C) INDIVIDUAL WITH A DISABILITY.— 

22 ‘‘(i) IN GENERAL.—Except as pro23 vided in clause (ii), an individual is an in24 dividual with a disability for a year if the 

25 individual (regardless of age)— 


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1 ‘‘(I) has a medically determinable 

2 physical or mental impairment, which 

3 results in marked and severe func4 tional limitations, and which can be 

5 expected to result in death or which 

6 has lasted or can be expected to last 

7 for a continuous period of not less 

8 than 12 month, or 

9 ‘‘(II) is blind. 

10 ‘‘(ii) DISABILITY CERTIFICATION RE11 QUIRED.—An individual shall not be treat12 ed as an individual with a disability for a 

13 year unless the individual— 

14 ‘‘(I) is receiving (or, for purposes 

15 of title XIX of the Social Security 

16 Act, is deemed to be, or treated as, re17 ceiving) benefits under the supple18 mental security income program 

19 under title XVI of such Act, or whose 

20 benefits under such program are sus21 pended other than by reason of mis22 conduct, 

23 ‘‘(II) is receiving disability bene24 fits under title II of such Act, or 


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1 ‘‘(III) files a disability certifi2 cation with the Secretary for such 

3 year. 

4 ‘‘(iii) DISABILITY CERTIFICATION DE5 FINED.—The term ‘disability certification’ 

6 means, with respect to an individual, a cer7 tification to the satisfaction of the Sec8 retary by the designated beneficiary or the 

9 parent or guardian of the designated bene10 ficiary that— 

11 ‘‘(I) the individual meets the cri12 teria described in clause (i), and 

13 ‘‘(II) includes a copy of the des14 ignated beneficiary’s diagnosis, signed 

15 by a physician meeting the criteria of 

16 section 1861(r)(1) of the Social Secu17 rity Act. 

18 ‘‘(iv) RESTRICTION ON USE OF CER19 TIFICATION.—No inference may be drawn 

20 from a disability certification for purposes 

21 of establishing eligibility for benefits under 

22 title II or XVI of the Social Security Act. 

23 ‘‘(4) ROLLOVERS FROM ABLE ACCOUNTS.—The 

24 limits on contributions pursuant to subsection (b)(6) 

25 shall not apply to any amount paid or distributed 


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1 from an ABLE account to the extent that the 

2 amount received is paid, not later than the 60th day 

3 after the date of such payment or distribution, 

4 into— 

5 ‘‘(A) another ABLE account for the ben6 efit of— 

7 ‘‘(i) the same beneficiary, or 

8 ‘‘(ii) an individual who— 

9 ‘‘(I) is the spouse of such indi10 vidual with a disability, or bears a re11 lationship to such individual with a 

12 disability which is described in section 

13 152(d)(2), and 

14 ‘‘(II) is also an individual with a 

15 disability, 

16 ‘‘(B) any trust which is described in sub17 paragraph (A) or (C) of section 1917(d)(4) of 

18 the Social Security Act and which is for the 

19 benefit of an individual described in clause (i) 

20 or (ii) of subparagraph (A), or 

21 ‘‘(C) a qualified tuition program— 

22 ‘‘(i) for the benefit of the designated 

23 beneficiary, or 

24 ‘‘(ii) to the credit of another des25 ignated beneficiary under a qualified tuiVerDate Mar 15 2010 04:09 Nov 16, 2011 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H3423.IH H3423

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1 tion program who is a member of the fam2 ily of the designated beneficiary with re3 spect to which the distribution was made. 

4 The preceding sentence shall not apply to any pay5 ment or distribution if it applied to any prior pay6 ment or distribution during the 12-month period 

7 ending on the date of the payment or distribution. 

8 ‘‘(5) TRANSFER TO STATE.—Subject to any 

9 outstanding payments due for qualified disability ex10 penses, in the case that the designated beneficiary 

11 dies or ceases to be an individual with a disability, 

12 all amounts remaining in the qualified ABLE ac13 count not in excess of the amount equal to the total 

14 medical assistance paid for the designated bene15 ficiary after the establishment of the account, net of 

16 any premiums paid from the account or paid by or 

17 on behalf of the beneficiary to a Medicaid Buy-In 

18 program, under any State Medicaid plan established 

19 under title XIX of the Social Security Act shall be 

20 distributed to such State upon filing of a claim for 

21 payment by such State. For purposes of this para22 graph, the State shall be a creditor of an ABLE ac23 count and not a beneficiary. Subsection (c)(3) shall 

24 not apply to a distribution under the preceding sen25 tence. 


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1 ‘‘(6) REGULATIONS.—Not later than 6 months 

2 after the date of the enactment of this section, the 

3 Secretary may prescribe such regulations or other 

4 guidance as the Secretary determines necessary or 

5 appropriate to carry out the purposes of this section, 

6 including regulations to prevent fraud and abuse 

7 with respect to amounts claimed as qualified dis8 ability expenses.’’. 

9 (2) CONFORMING AMENDMENT.—Paragraph (2) 

10 of section 6693(a) of the Internal Revenue Code of 

11 1986 such Code is amended by striking ‘‘and’’ at the 

12 end of subparagraph (D), by striking the period at 

13 the end of subparagraph (E) and inserting ‘‘and’’, 

14 and by inserting after subparagraph (E) the fol15 lowing new subparagraph: 

16 ‘‘(F) section 529(d) by reason of 529(f) 

17 (relating to ABLE accounts).’’. 

18 (b) ANNUAL REPORTS.— 

19 (1) IN GENERAL.—The Secretary of the Treas20 ury shall report annually to Congress on the usage 

21 of ABLE accounts under section 529(f) of the Inter22 nal Revenue Code of 1986. 

23 (2) CONTENTS OF REPORT.—Any report under 

24 paragraph (1) shall include— 


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1 (A) the number of people with an ABLE 

2 account, 

3 (B) the total amount of contributions to 

4 such accounts, 

5 (C) the total amount and nature of dis6 tributions from such accounts, 

7 (D) issues relating to the abuse of such ac8 counts, if any, and 

9 (E) the amounts repaid from such ac10 counts to State Medicaid programs established 

11 under title XIX of the Social Security Act. 

12 (c) EFFECTIVE DATE.—The amendments made by 

13 this section shall apply to taxable years beginning after 

14 the date of the enactment of this Act. 

15 SEC. 4. TREATMENT OF ABLE ACCOUNTS UNDER CERTAIN 

16 FEDERAL PROGRAMS. 

17 (a) ACCOUNT FUNDS DISREGARDED FOR PURPOSES

18 OF CERTAIN OTHER MEANS-TESTED FEDERAL PRO19 GRAMS.—Notwithstanding any other provision of Federal 

20 law that requires consideration of 1 or more financial cir21 cumstances of an individual, for the purpose of deter22 mining eligibility to receive, or the amount of, any assist23 ance or benefit authorized by such provision to be provided 

24 to or for the benefit of such individual, any amount (in25 cluding earnings thereon) in any ABLE account (as deVerDate Mar 15 2010 04:09 Nov 16, 2011 Jkt 019200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H3423.IH H3423

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1 fined in section 529(f) of the Internal Revenue Code of 

2 1986) of such individual, and any distribution for qualified 

3 disability expenses (as defined in paragraph (3) of such 

4 section) shall be disregarded for such purpose with respect 

5 to any period during which such individual maintains, 

6 makes contributions to, or receives distributions from such 

7 ABLE account, except that, in the case of the supple8 mental security income program under title XVI of the 

9 Social Security Act, a distribution for housing expenses 

10 (as defined in subparagraph (B)(ii) of such paragraph) 

11 shall not be so disregarded, and in the case of such pro12 gram, only the 1st $100,000 of the amount (including 

13 such earnings) in such ABLE account shall be so dis14 regarded. 

15 (b) SUSPENSION OF SSI BENEFITS DURING PERI16 ODS OF EXCESSIVE ACCOUNT FUNDS.— 

17 (1) IN GENERAL.—The benefits of an individual 

18 under the supplemental security income program 

19 under title XVI of the Social Security Act shall not 

20 be terminated, but shall be suspended, by reason of 

21 excess resources of the individual attributable to an 

22 amount in the ABLE account (as defined in section 

23 529(f) of the Internal Revenue Code of 1986) of the 

24 individual not disregarded under subsection (a) of 

25 this section. 


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1 (2) NO IMPACT ON MEDICAID ELIGIBILITY.—An 

2 individual who would be receiving payment of such 

3 supplemental security income benefits but for the 

4 application of the previous sentence shall be treated 

5 for purposes of title XIX of the Social Security Act 

6 as if the individual continued to be receiving pay7 ment of such benefits. 

Æ 


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