II 

112TH CONGRESS 

1ST SESSION S. 1872 

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 

NOVEMBER 15, 2011 

Mr. CASEY (for himself and Mr. BURR) 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. 

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

3 SECTION 1. SHORT TITLE. 

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

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

6 2011’’. 

7 SEC. 2. PURPOSES. 

8 The purposes of this Act are as follows: 


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1 (1) To encourage and assist individuals and 

2 families in saving private funds for the purpose of 

3 supporting individuals with disabilities to maintain 

4 health, independence, and quality of life. 

5 (2) To provide secure funding for disability-re6 lated expenses on behalf of designated beneficiaries 

7 with disabilities that will supplement, but not sup8 plant, benefits provided through private insurance, 

9 the Medicaid program under title XIX of the Social 

10 Security Act, the supplemental security income pro11 gram under title XVI of such Act, the beneficiary’s 

12 employment, and other sources. 

13 SEC. 3. ABLE ACCOUNTS. 

14 (a) ESTABLISHMENT.— 

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

16 Revenue Code of 1986 is amended by redesignating 

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

18 after subsection (e) the following new subsection: 

19 ‘‘(f) ABLE ACCOUNTS.— 

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

21 other provision of law with respect to a qualified 

22 ABLE program and an ABLE account, except as 

23 otherwise provided in this subsection— 

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

25 ABLE account shall be treated in the same 


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1 manner as a qualified tuition program and an 

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

3 respectively, are treated, and 

4 ‘‘(B) qualified disability expenses with re5 spect to a program or account described in sub6 paragraph (A) shall be treated in the same 

7 manner as qualified higher education expenses 

8 are treated. 

9 ‘‘(2) QUALIFIED ABLE PROGRAM.—For pur10 poses of this subsection, the term ‘qualified ABLE 

11 program’ means a program established and main12 tained by a State or agency or instrumentality there13 of— 

14 ‘‘(A) under which a person may make con15 tributions to an ABLE account which is estab16 lished for the purpose of meeting the qualified 

17 disability expenses of the designated beneficiary 

18 of the account, 

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

20 preceding subsections of this section (as modi21 fied by this subsection), determined by sub22 stituting— 

23 ‘‘(i) ‘qualified ABLE program’ for 

24 ‘qualified tuition program’, and 


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

2 and 

3 ‘‘(C) which meets the other requirements 

4 of this subsection. 

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

6 purposes of this subsection— 

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

8 disability expenses’ means any expenses which 

9 are made for the benefit of an individual with 

10 a disability who is a designated beneficiary. 

11 ‘‘(B) EXPENSES INCLUDED.—The fol12 lowing expenses shall be qualified disability ex13 penses if such expenses are made for the benefit 

14 of an individual with a disability who is a des15 ignated beneficiary and are related to such dis16 ability: 

17 ‘‘(i) EDUCATION.—Expenses for edu18 cation, including tuition for preschool thru 

19 post-secondary education, books, supplies, 

20 and educational materials related to such 

21 education, tutors, and special education 

22 services. 

23 ‘‘(ii) HOUSING.—Expenses for a pri24 mary residence, including rent, purchase of 

25 a primary residence or an interest in a priVerDate Mar 15 2010 22:18 Nov 17, 2011 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1872.IS S1872

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1 mary residence, mortgage payments, real 

2 property taxes, and utility charges. 

3 ‘‘(iii) TRANSPORTATION.—Expenses 

4 for transportation, including the use of 

5 mass transit, the purchase or modification 

6 of vehicles, and moving expenses. 

7 ‘‘(iv) EMPLOYMENT SUPPORT.—Ex8 penses related to obtaining and maintain9 ing employment, including job-related 

10 training, assistive technology, and personal 

11 assistance supports. 

12 ‘‘(v) HEALTH, PREVENTION, AND

13 WELLNESS.—Expenses for health and 

14 wellness, including premiums for health in15 surance, mental health, medical, vision, 

16 and dental expenses, habilitation and reha17 bilitation services, durable medical equip18 ment, therapy, respite care, long term serv19 ices and supports, nutritional management, 

20 communication services and devices, adapt21 ive equipment, assistive technology, and 

22 personal assistance. 

23 ‘‘(vi) MISCELLANEOUS EXPENSES.— 

24 Financial management and administrative 

25 services; legal fees; expenses for oversight; 


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1 monitoring; home improvements, and modi2 fications, maintenance and repairs, at pri3 mary residence; or funeral and burial ex4 penses. 

5 ‘‘(vii) ASSISTIVE TECHNOLOGY AND

6 PERSONAL SUPPORT SERVICES.—Expenses 

7 for assistive technology and personal sup8 port with respect to any item described in 

9 clauses (i) through (vi). 

10 ‘‘(viii) OTHER APPROVED EX11 PENSES.—Any other expenses which are 

12 approved by the Secretary under regula13 tions and consistent with the purposes of 

14 this section. 

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

16 ‘‘(i) IN GENERAL.—Except as pro17 vided in clause (ii), an individual is an in18 dividual with a disability for a year if the 

19 individual (regardless of age)— 

20 ‘‘(I) has a medically determinable 

21 physical or mental impairment, which 

22 results in marked and severe func23 tional limitations, and which can be 

24 expected to result in death or which 

25 has lasted or can be expected to last 


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1 for a continuous period of not less 

2 than 12 month, or 

3 ‘‘(II) is blind. 

4 ‘‘(ii) DISABILITY CERTIFICATION RE5 QUIRED.—An individual shall not be treat6 ed as an individual with a disability for a 

7 year unless the individual— 

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

9 of title XIX of the Social Security 

10 Act, is deemed to be, or treated as, re11 ceiving) benefits under the supple12 mental security income program 

13 under title XVI of such Act, or whose 

14 benefits under such program are sus15 pended other than by reason of mis16 conduct, 

17 ‘‘(II) is receiving disability bene18 fits under title II of such Act, or 

19 ‘‘(III) files a disability certifi20 cation with the Secretary for such 

21 year. 

22 ‘‘(iii) DISABILITY CERTIFICATION DE23 FINED.—The term ‘disability certification’ 

24 means, with respect to an individual, a cer25 tification to the satisfaction of the SecVerDate Mar 15 2010 22:18 Nov 17, 2011 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1872.IS S1872

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1 retary by the designated beneficiary or the 

2 parent or guardian of the designated bene3 ficiary that— 

4 ‘‘(I) the individual meets the cri5 teria described in clause (i), and 

6 ‘‘(II) includes a copy of the des7 ignated beneficiary’s diagnosis, signed 

8 by a physician meeting the criteria of 

9 section 1861(r)(1) of the Social Secu10 rity Act. 

11 ‘‘(iv) RESTRICTION ON USE OF CER12 TIFICATION.—No inference may be drawn 

13 from a disability certification for purposes 

14 of establishing eligibility for benefits under 

15 title II or XVI of the Social Security Act. 

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

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

18 shall not apply to any amount paid or distributed 

19 from an ABLE account to the extent that the 

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

21 after the date of such payment or distribution, 

22 into— 

23 ‘‘(A) another ABLE account for the ben24 efit of— 

25 ‘‘(i) the same beneficiary, or 


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1 ‘‘(ii) an individual who— 

2 ‘‘(I) is the spouse of such indi3 vidual with a disability, or bears a re4 lationship to such individual with a 

5 disability which is described in section 

6 152(d)(2), and 

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

8 disability, 

9 ‘‘(B) any trust which is described in sub10 paragraph (A) or (C) of section 1917(d)(4) of 

11 the Social Security Act and which is for the 

12 benefit of an individual described in clause (i) 

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

14 ‘‘(C) a qualified tuition program— 

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

16 beneficiary, or 

17 ‘‘(ii) to the credit of another des18 ignated beneficiary under a qualified tui19 tion program who is a member of the fam20 ily of the designated beneficiary with re21 spect to which the distribution was made. 

22 The preceding sentence shall not apply to any pay23 ment or distribution if it applied to any prior pay24 ment or distribution during the 12-month period 

25 ending on the date of the payment or distribution. 


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

2 outstanding payments due for qualified disability ex3 penses, in the case that the designated beneficiary 

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

5 all amounts remaining in the qualified ABLE ac6 count not in excess of the amount equal to the total 

7 medical assistance paid for the designated bene8 ficiary after the establishment of the account, net of 

9 any premiums paid from the account or paid by or 

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

11 program, under any State Medicaid plan established 

12 under title XIX of the Social Security Act shall be 

13 distributed to such State upon filing of a claim for 

14 payment by such State. For purposes of this para15 graph, the State shall be a creditor of an ABLE ac16 count and not a beneficiary. Subsection (c)(3) shall 

17 not apply to a distribution under the preceding sen18 tence. 

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

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

21 Secretary may prescribe such regulations or other 

22 guidance as the Secretary determines necessary or 

23 appropriate to carry out the purposes of this section, 

24 including regulations to prevent fraud and abuse 


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1 with respect to amounts claimed as qualified dis2 ability expenses.’’. 

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

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

5 1986 such Code is amended by striking ‘‘and’’ at the 

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

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

8 and by inserting after subparagraph (E) the fol9 lowing new subparagraph: 

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

11 (relating to ABLE accounts).’’. 

12 (b) ANNUAL REPORTS.— 

13 (1) IN GENERAL.—The Secretary of the Treas14 ury shall report annually to Congress on the usage 

15 of ABLE accounts under section 529(f) of the Inter16 nal Revenue Code of 1986. 

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

18 paragraph (1) shall include— 

19 (A) the number of people with an ABLE 

20 account, 

21 (B) the total amount of contributions to 

22 such accounts, 

23 (C) the total amount and nature of dis24 tributions from such accounts, 


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1 (D) issues relating to the abuse of such ac2 counts, if any, and 

3 (E) the amounts repaid from such ac4 counts to State Medicaid programs established 

5 under title XIX of the Social Security Act. 

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

7 this section shall apply to taxable years beginning after 

8 the date of the enactment of this Act. 

9 SEC. 4. TREATMENT OF ABLE ACCOUNTS UNDER CERTAIN 

10 FEDERAL PROGRAMS. 

11 (a) ACCOUNT FUNDS DISREGARDED FOR PURPOSES

12 OF CERTAIN OTHER MEANS-TESTED FEDERAL PRO13 GRAMS.—Notwithstanding any other provision of Federal 

14 law that requires consideration of 1 or more financial cir15 cumstances of an individual, for the purpose of deter16 mining eligibility to receive, or the amount of, any assist17 ance or benefit authorized by such provision to be provided 

18 to or for the benefit of such individual, any amount (in19 cluding earnings thereon) in any ABLE account (as de20 fined in section 529(f) of the Internal Revenue Code of 

21 1986) of such individual, and any distribution for qualified 

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

23 section) shall be disregarded for such purpose with respect 

24 to any period during which such individual maintains, 

25 makes contributions to, or receives distributions from such 


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1 ABLE account, except that, in the case of the supple2 mental security income program under title XVI of the 

3 Social Security Act, a distribution for housing expenses 

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

5 shall not be so disregarded, and in the case of such pro6 gram, only the 1st $100,000 of the amount (including 

7 such earnings) in such ABLE account shall be so dis8 regarded. 

9 (b) SUSPENSION OF SSI BENEFITS DURING PERI10 ODS OF EXCESSIVE ACCOUNT FUNDS.— 

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

12 under the supplemental security income program 

13 under title XVI of the Social Security Act shall not 

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

15 excess resources of the individual attributable to an 

16 amount in the ABLE account (as defined in section 

17 529(f) of the Internal Revenue Code of 1986) of the 

18 individual not disregarded under subsection (a) of 

19 this section. 

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

21 individual who would be receiving payment of such 

22 supplemental security income benefits but for the 

23 application of the previous sentence shall be treated 

24 for purposes of title XIX of the Social Security Act 


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1 as if the individual continued to be receiving pay2 ment of such benefits. 

Æ 


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