IB 

Union Calendar No. 456 

113TH CONGRESS 

2D SESSION H. R. 647 

[Report No. 113–614, Part I] 

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 

FEBRUARY 13, 2013 

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

Mr. SESSIONS, Mr. RUNYAN, Mr. MICA, Ms. TSONGAS, Mr. COFFMAN, 

Mr. ROE of Tennessee, Mr. COOPER, Mr. MORAN, Mr. HARPER, Mr. 

CONNOLLY, Mr. SARBANES, Ms. CLARKE, Mr. LARSEN of Washington, 

Mr. GERLACH, Mr. LARSON of Connecticut, Mr. CARSON of Indiana, Mr. 

TONKO, Mr. CICILLINE, Mr. RYAN of Ohio, Mr. YOUNG of Florida, Mr. 

HOLT, Mrs. CAPPS, Mr. BACHUS, Mr. MCGOVERN, Ms. BONAMICI, Mr. 

MATHESON, Mr. MILLER of Florida, Mr. NUNNELEE, Mr. STIVERS, Mr. 

WOMACK, Ms. HERRERA BEUTLER, Mr. JOHNSON of Ohio, Mrs. DAVIS

of California, Mr. COURTNEY, Mr. KING of New York, Mrs. HARTZLER, 

Mr. MCKINLEY, Mr. SMITH of New Jersey, Mr. VELA, Mr. WOLF, Mrs. 

CAPITO, Mr. YARMUTH, Ms. BROWNLEY of California, Mr. YODER, Mr. 

ROONEY, Mr. MARCHANT, Mrs. BROOKS of Indiana, Ms. NORTON, Mrs. 

BACHMANN, Mr. HONDA, Mr. MEEHAN, Mr. BENISHEK, Mr. POE of 

Texas, Mr. WELCH, Mr. WALBERG, and Mr. DEUTCH) 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 

NOVEMBER 12, 2014 

Additional sponsors: Ms. ROS-LEHTINEN, Mr. HASTINGS of Florida, Mr. 

MEADOWS, Mr. SCHIFF, Mr. CAPUANO, Ms. DUCKWORTH, Mr. WEBSTER

of Florida, Mr. KEATING, Mr. BARLETTA, Mr. HIMES, Mr. LANGEVIN, 

Mr. PAYNE, Mr. DIAZ-BALART, Mr. HANNA, Ms. PINGREE of Maine, Mr. 

POSEY, Mr. BRADY of Pennsylvania, Mr. CLAY, Mr. LOEBSACK, Mr. 


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MARKEY, Mrs. ROBY, Ms. DELAURO, Mr. PRICE of North Carolina, Mr. 

MICHAUD, Mr. COHEN, Mr. LIPINSKI, Mr. KENNEDY, Ms. BROWN of 

Florida, Mr. CASTRO of Texas, Ms. EDDIE BERNICE JOHNSON of Texas, 

Mr. MESSER, Mr. WENSTRUP, Mr. CARNEY, Mr. MCCAUL, Mr. PEARCE, 

Mr. GALLEGO, Mr. CA ́RDENAS, Mr. BUCSHON, Mr. YOHO, Ms. LOFGREN, 

Mrs. MCCARTHY of New York, Mr. MASSIE, Mr. AL GREEN of Texas, 

Mr. BARBER, Mr. CHABOT, Mr. POCAN, Mr. GARDNER, Mr. TIERNEY, 

Mr. O’ROURKE, Mr. CULBERSON, Ms. CASTOR of Florida, Mr. GRAVES

of Missouri, Mr. VEASEY, Mr. HALL, Ms. WASSERMAN SCHULTZ, Mr. 

CRAWFORD, Mr. DELANEY, Mrs. BLACKBURN, Mr. YOUNG of Alaska, Mr. 

TURNER, Mr. RICHMOND, Mr. LYNCH, Mr. COLE, Mr. LOWENTHAL, Mr. 

THOMPSON of California, Mr. GOODLATTE, Mr. WILSON of South Carolina, Mr. KLINE, Mrs. NOEM, Mr. ANDREWS, Mr. FITZPATRICK, Mr. 

STUTZMAN, Mr. FINCHER, Mr. BENTIVOLIO, Ms. MOORE, Ms. SCHAKOWSKY, Mr. RUPPERSBERGER, Mr. HULTGREN, Ms. ESTY, Mr. 

BUTTERFIELD, Mr. LATTA, Mr. CALVERT, Mr. CUMMINGS, Mr. RAHALL, 

Mr. GIBSON, Mr. ROGERS of Alabama, Ms. KUSTER, Mr. BRALEY of 

Iowa, Mr. LUETKEMEYER, Ms. DELBENE, Mr. PETERS of Michigan, Mr. 

PERLMUTTER, Mr. DUFFY, Mr. MURPHY of Pennsylvania, Ms. FRANKEL

of Florida, Mr. SCHNEIDER, Mr. COTTON, Mr. ROGERS of Kentucky, Ms. 

SHEA-PORTER, Mr. RIBBLE, Mrs. LOWEY, Mr. GIBBS, Ms. MCCOLLUM, 

Mr. PALLONE, Mr. BEN RAY LUJA ́N of New Mexico, Mr. PAULSEN, Mrs. 

BEATTY, Mr. BONNER, Mr. SIRES, Mr. RODNEY DAVIS of Illinois, Mr. 

HUIZENGA of Michigan, Mr. CUELLAR, Mr. SALMON, Ms. EDWARDS, Mr. 

CASSIDY, Mr. SOUTHERLAND, Mr. WALZ, Mr. NADLER, Mr. DOYLE, Mr. 

BLUMENAUER, Mrs. CAROLYN B. MALONEY of New York, Ms. SPEIER, 

Mr. DOGGETT, Ms. MICHELLE LUJAN GRISHAM of New Mexico, Mr. 

SCHOCK, Ms. ROYBAL-ALLARD, Mr. BILIRAKIS, Mr. LATHAM, Mr. WITTMAN, Mr. DEFAZIO, Mr. GRIFFIN of Arkansas, Mrs. ELLMERS, Mr. 

ROTHFUS, Mr. SENSENBRENNER, Ms. WATERS, Ms. KAPTUR, Mr. 

THOMPSON of Pennsylvania, Mr. JONES, Mr. LANCE, Mr. MCINTYRE, 

Mr. FORBES, Mr. OWENS, Mr. AMODEI, Mr. BARR, Ms. TITUS, Mr. 

PALAZZO, Mr. GRIFFITH of Virginia, Mr. SCHWEIKERT, Ms. WILSON of 

Florida, Mr. DAVID SCOTT of Georgia, Mr. ROKITA, Mr. NUGENT, Mr. 

POLIS, Mr. ROSS, Mr. RIGELL, Mr. WALDEN, Mr. DENT, Mr. GRAYSON, 

Mr. LAMALFA, Mr. BISHOP of Utah, Mr. BUCHANAN, Mr. BISHOP of 

Georgia, Mrs. KIRKPATRICK, Mr. CARTER, Ms. SEWELL of Alabama, Mr. 

WHITFIELD, Mr. SMITH of Texas, Mr. HOLDING, Mr. FORTENBERRY, 

Mr. NEUGEBAUER, Mr. SIMPSON, Mr. TERRY, Mr. DESANTIS, Mr. 

RADEL, Mr. PITTENGER, Mr. FARENTHOLD, Mr. PASCRELL, Mrs. MILLER of Michigan, Mr. JOHNSON of Georgia, Ms. FUDGE, Mr. 

MCDERMOTT, Mr. NEAL, Ms. GRANGER, Mr. BISHOP of New York, Mr. 

FRANKS of Arizona, Mr. CLEAVER, Mr. MEEKS, Mr. LEWIS, Mr. JOYCE, 

Mr. COBLE, Mr. VISCLOSKY, Mr. HORSFORD, Mr. FARR, Mr. VARGAS, 

Ms. LEE of California, Mr. CRAMER, Mr. KINZINGER of Illinois, Mr. 

PETERSON, Ms. ESHOO, Mr. PETERS of California, Mr. NUNES, Mr. 

MAFFEI, Mr. BERA of California, Mr. HUFFMAN, Ms. LINDA T. 

SA ́NCHEZ of California, Ms. SINEMA, Mr. RICE of South Carolina, Mr. 

ELLISON, Mr. MURPHY of Florida, Mr. COOK, Mr. JEFFRIES, Ms. HAHN, 

Mr. NOLAN, Mr. TAKANO, Mr. RUIZ, Mr. SCHRADER, Mr. GUTHRIE, Mr. 

HUDSON, Mr. LONG, Mr. TIPTON, Mr. ENGEL, Ms. BASS, Mr. GARCIA, 


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Mr. ENYART, Mr. SHERMAN, Mr. SERRANO, Mr. OLSON, Mr. JORDAN, 

Mr. HECK of Nevada, Mrs. WALORSKI, Mr. BROUN of Georgia, Mr. 

GINGREY of Georgia, Mr. ROYCE, Mr. MCHENRY, Mr. CONAWAY, Mr. 

CONYERS, Mrs. WAGNER, Mr. FLEMING, Mr. GRIMM, Mr. STOCKMAN, 

Mr. ISRAEL, Mr. LOBIONDO, Mr. HINOJOSA, Mr. MULVANEY, Mr. AUSTIN SCOTT of Georgia, Mr. COLLINS of Georgia, Ms. JACKSON LEE, Mr. 

DAINES, Mrs. NAPOLITANO, Mr. BURGESS, Mr. THORNBERRY, Mr. SHIMKUS, Mr. GENE GREEN of Texas, Mr. MCNERNEY, Mr. GARAMENDI, Mr. 

HURT, Mr. HECK of Washington, Mr. CARTWRIGHT, Ms. CHU, Mr. KILDEE, Mr. WESTMORELAND, Mr. KILMER, Mrs. BUSTOS, Mr. KIND, Mrs. 

NEGRETE MCLEOD, Ms. LORETTA SANCHEZ of California, Mr. POMPEO, 

Mr. MARINO, Ms. MATSUI, Ms. SCHWARTZ, Mr. CROWLEY, Mr. 

SWALWELL of California, Ms. MENG, Mr. SEAN PATRICK MALONEY of 

New York, Ms. VELA ́ZQUEZ, Mr. VALADAO, Mr. COSTA, Mr. HASTINGS

of Washington, Ms. CLARK of Massachusetts, Mr. RUSH, Ms. JENKINS, 

Mr. DANNY K. DAVIS of Illinois, Mr. MCALLISTER, Mr. ROSKAM, Mr. 

HIGGINS, Mr. SCALISE, Mr. GUTIE ́RREZ, Mr. BYRNE, Mr. SAM JOHNSON

of Texas, Mr. QUIGLEY, Mr. KELLY of Pennsylvania, Mr. REICHERT, 

Mrs. BLACK, Mr. YOUNG of Indiana, Mr. PIERLUISI, Mr. HUNTER, Mr. 

DESJARLAIS, Mr. TIBERI, Mr. FRELINGHUYSEN, Ms. GABBARD, Mr. 

HENSARLING, Ms. SLAUGHTER, Mr. RENACCI, Mr. GOSAR, Mr. RANGEL, 

Mr. FLORES, Mr. FATTAH, Mr. HARRIS, Mr. DUNCAN of Tennessee, Mr. 

UPTON, Mr. SABLAN, Mr. MCKEON, Mr. WILLIAMS, Mr. DENHAM, Mr. 

FLEISCHMANN, Mr. BRADY of Texas, Mr. PRICE of Georgia, Mr. 

MCCLINTOCK, Mr. BARTON, Mr. REED, Mr. JOLLY, and Mr. BOUSTANY

NOVEMBER 12, 2014 

Reported from the Committee on Ways and Means with an amendment 

[Strike out all after the enacting clause and insert the part printed in italic] 

NOVEMBER 12, 2014 

The Committee on Energy and Commerce discharged; committed to the Committee of the Whole House on the State of the Union and ordered to be 

printed 

[For text of introduced bill, see copy of bill as introduced on February 13, 2013] 


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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. 


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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 Life 

5 Experience Act of 2014’’ or the ‘‘ABLE Act of 2014’’. 

6 SEC. 2. PURPOSES. 

7 The purposes of this Act are as follows: 

8 (1) To encourage and assist individuals and 

9 families in saving private funds for the purpose of 

10 supporting individuals with disabilities to maintain 

11 health, independence, and quality of life. 

12 (2) To provide secure funding for disability-re13 lated expenses on behalf of designated beneficiaries 

14 with disabilities that will supplement, but not sup15 plant, benefits provided through private insurance, 

16 the Medicaid program under title XIX of the Social 

17 Security Act, the supplemental security income pro18 gram under title XVI of such Act, the beneficiary’s 

19 employment, and other sources. 

20 SEC. 3. QUALIFIED ABLE PROGRAMS. 

21 (a) IN GENERAL.—Subchapter F of chapter 1 of the 

22 Internal Revenue Code of 1986 is amended by inserting 

23 after section 529 the following new section: 


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1 ‘‘SEC. 529A. QUALIFIED ABLE PROGRAMS. 

2 ‘‘(a) GENERAL RULE.—A qualified ABLE program 

3 shall be exempt from taxation under this subtitle. Notwith4 standing the preceding sentence, such program shall be sub5 ject to the taxes imposed by section 511 (relating to imposi6 tion of tax on unrelated business income of charitable orga7 nizations). 

8 ‘‘(b) QUALIFIED ABLE PROGRAM.—For purposes of 

9 this section— 

10 ‘‘(1) IN GENERAL.—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 for a taxable year, for the benefit of an 

16 individual who is an eligible individual for such 

17 taxable year, to an ABLE account which is es18 tablished for the purpose of meeting the qualified 

19 disability expenses of the designated beneficiary 

20 of the account, 

21 ‘‘(B) which limits a designated beneficiary 

22 to 1 ABLE account for purposes of this section, 

23 ‘‘(C) which allows for the establishment of 

24 an ABLE account only for a beneficiary who is 

25 a resident of such State or a resident of a con26 tracting State, and 


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1 ‘‘(D) which meets the other requirements of 

2 this section. 

3 ‘‘(2) CASH CONTRIBUTIONS.—A program shall 

4 not be treated as a qualified ABLE program unless 

5 it provides that no contribution will be accepted— 

6 ‘‘(A) unless it is in cash, or 

7 ‘‘(B) except in the case of contributions 

8 under subsection (c)(1)(C), if such contribution 

9 to an ABLE account would result in aggregate 

10 contributions from all contributors to the ABLE 

11 account for the taxable year exceeding the 

12 amount in effect under section 2503(b) for the 

13 calendar year in which the taxable year begins. 

14 For purposes of this paragraph, rules similar to the 

15 rules of section 408(d)(4) (determined without regard 

16 to subparagraph (B) thereof) shall apply. 

17 ‘‘(3) SEPARATE ACCOUNTING.—A program shall 

18 not be treated as a qualified ABLE program unless 

19 it provides separate accounting for each designated 

20 beneficiary. 

21 ‘‘(4) NO INVESTMENT DIRECTION.—A program 

22 shall not be treated as a qualified ABLE program un23 less it provides that any contributor to, or designated 

24 beneficiary under, such program may not directly or 


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1 indirectly direct the investment of any contributions 

2 to the program (or any earnings thereon). 

3 ‘‘(5) NO PLEDGING OF INTEREST AS SECURITY.— 

4 A program shall not be treated as a qualified ABLE 

5 program if it allows any interest in the program or 

6 any portion thereof to be used as security for a loan. 

7 ‘‘(6) PROHIBITION ON EXCESS CONTRIBU8 TIONS.—A program shall not be treated as a qualified 

9 ABLE program unless it provides adequate safe10 guards to prevent aggregate contributions on behalf of 

11 a designated beneficiary in excess of the limit estab12 lished by the State under section 529(b)(6). For pur13 poses of the preceding sentence, aggregate contribu14 tions include contributions under any prior qualified 

15 ABLE program of any State or agency or instrumen16 tality thereof. 

17 ‘‘(c) TAX TREATMENT.— 

18 ‘‘(1) DISTRIBUTIONS.— 

19 ‘‘(A) IN GENERAL.—Any distribution under 

20 a qualified ABLE program shall be includible in 

21 the gross income of the distributee in the manner 

22 as provided under section 72 to the extent not ex23 cluded from gross income under any other provi24 sion of this chapter. 


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1 ‘‘(B) DISTRIBUTIONS FOR QUALIFIED DIS2 ABILITY EXPENSES.—For purposes of this para3 graph, if distributions from a qualified ABLE 

4 program— 

5 ‘‘(i) do not exceed the qualified dis6 ability expenses of the designated bene7 ficiary, no amount shall be includible in 

8 gross income, and 

9 ‘‘(ii) in any other case, the amount 

10 otherwise includible in gross income shall be 

11 reduced by an amount which bears the same 

12 ratio to such amount as such expenses bear 

13 to such distributions. 

14 ‘‘(C) CHANGE IN BENEFICIARIES OR PRO15 GRAMS.— 

16 ‘‘(i) ROLLOVERS FROM ABLE AC17 COUNTS.—Subparagraph (A) shall not 

18 apply to any amount paid or distributed 

19 from an ABLE account to the extent that 

20 the amount received is paid, not later than 

21 the 60th day after the date of such payment 

22 or distribution, into another ABLE account 

23 for the benefit of the same beneficiary or an 

24 eligible individual who is a family member 

25 of the beneficiary. 


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1 ‘‘(ii) CHANGE IN DESIGNATED BENE2 FICIARIES.—Any change in the designated 

3 beneficiary of an interest in a qualified 

4 ABLE program during a taxable year shall 

5 not be treated as a distribution for purposes 

6 of subparagraph (A) if the new beneficiary 

7 is an eligible individual for such taxable 

8 year and a member of the family of the 

9 former beneficiary. 

10 ‘‘(iii) LIMITATION ON CERTAIN ROLL11 OVERS.—Clause (i) shall not apply to any 

12 transfer if such transfer occurs within 12 

13 months from the date of a previous transfer 

14 to any qualified ABLE program for the 

15 benefit of the designated beneficiary. 

16 ‘‘(D) OPERATING RULES.—For purposes of 

17 applying section 72— 

18 ‘‘(i) except to the extent provided by 

19 the Secretary, all distributions during a 

20 taxable year shall be treated as one dis21 tribution, and 

22 ‘‘(ii) except to the extent provided by 

23 the Secretary, the value of the contract, in24 come on the contract, and investment in the 

25 contract shall be computed as of the close of 


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1 the calendar year in which the taxable year 

2 begins. 

3 ‘‘(2) GIFT TAX RULES.—For purposes of chapters 

4 12 and 13— 

5 ‘‘(A) CONTRIBUTIONS.—Any contribution to 

6 a qualified ABLE program on behalf of any des7 ignated beneficiary— 

8 ‘‘(i) shall be treated as a completed gift 

9 to such beneficiary which is not a future in10 terest in property, and 

11 ‘‘(ii) shall not be treated as a qualified 

12 transfer under section 2503(e). 

13 ‘‘(B) TREATMENT OF DISTRIBUTIONS.—Ex14 cept as provided in subparagraph (C), in no 

15 event shall a distribution from a qualified ABLE 

16 program be treated as a taxable gift. 

17 ‘‘(C) TREATMENT OF DESIGNATION OF NEW

18 BENEFICIARY.—The taxes imposed by chapters 

19 12 and 13 shall apply to a transfer by reason of 

20 a change in the designated beneficiary under the 

21 program (or a contribution under paragraph 

22 (1)(C) to the ABLE account of a new bene23 ficiary) during any taxable year unless, as of the 

24 beginning of such taxable year, the new bene25 ficiary is both an eligible individual for such 


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1 taxable year and a member of the family of the 

2 former beneficiary. 

3 ‘‘(3) ADDITIONAL TAX FOR DISTRIBUTIONS NOT

4 USED FOR DISABILITY EXPENSES.— 

5 ‘‘(A) IN GENERAL.—The tax imposed by 

6 this chapter for any taxable year on any tax7 payer who receives a distribution from a quali8 fied ABLE program which is includible in gross 

9 income shall be increased by 10 percent of the 

10 amount which is so includible. 

11 ‘‘(B) EXCEPTION.—Subparagraph (A) shall 

12 not apply if the payment or distribution is made 

13 to a beneficiary (or to the estate of the designated 

14 beneficiary) on or after the death of the des15 ignated beneficiary. 

16 ‘‘(C) CONTRIBUTIONS RETURNED BEFORE

17 CERTAIN DATE.—Subparagraph (A) shall not 

18 apply to the distribution of any contribution 

19 made during a taxable year on behalf of the des20 ignated beneficiary if— 

21 ‘‘(i) such distribution is received on or 

22 before the day prescribed by law (including 

23 extensions of time) for filing such des24 ignated beneficiary’s return for such taxable 

25 year, and 


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1 ‘‘(ii) such distribution is accompanied 

2 by the amount of net income attributable to 

3 such excess contribution. 

4 Any net income described in clause (ii) shall be 

5 included in gross income for the taxable year in 

6 which such excess contribution was made. 

7 ‘‘(4) LOSS OF ABLE ACCOUNT TREATMENT.—If, 

8 during any taxable year of an eligible individual for 

9 whose benefit any ABLE account is established, more 

10 than 1 ABLE account for the benefit of the eligible 

11 individual exists at the same time, each such ABLE 

12 account other than the earliest established ABLE ac13 count shall not be treated as an ABLE account as of 

14 the first day of such taxable year. 

15 ‘‘(d) REPORTS.— 

16 ‘‘(1) IN GENERAL.—Each officer or employee 

17 having control of the qualified ABLE program or 

18 their designee shall make such reports regarding such 

19 program to the Secretary and to designated bene20 ficiaries with respect to contributions, distributions, 

21 the return of excess contributions, and such other 

22 matters as the Secretary may require. 

23 ‘‘(2) CERTAIN AGGREGATED INFORMATION.—For 

24 research purposes, the Secretary shall make available 

25 to the public reports containing aggregate informaVerDate Sep 11 2014 22:16 Nov 12, 2014 Jkt 049200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6203 E:\BILLS\H647.RH H647

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1 tion, by diagnosis and other relevant characteristics, 

2 on contributions and distributions from the qualified 

3 ABLE program. In carrying out the preceding sen4 tence an item may not be made available to the pub5 lic if such item can be associated with, or otherwise 

6 identify, directly or indirectly, a particular indi7 vidual. 

8 ‘‘(3) NOTICE OF ESTABLISHMENT OF ABLE AC9 COUNT.—The trustee of an ABLE account shall sub10 mit a notice to the Secretary upon the establishment 

11 of the ABLE account. Such notice shall contain the 

12 name and State of residence of the beneficiary and 

13 such other information as the Secretary may require. 

14 ‘‘(4) ELECTRONIC DISTRIBUTION STATEMENTS.— 

15 For purposes of section 4 of the Achieving a Better 

16 Life Experience Act of 2014, States shall submit elec17 tronically on a monthly basis to the Commissioner of 

18 Social Security, in the manner specified by the Com19 missioner, statements on relevant distributions and 

20 account balances from all ABLE accounts. 

21 ‘‘(5) REQUIREMENTS.—The reports and notices 

22 required by paragraphs (1), (2), and (3) shall be filed 

23 at such time and in such manner and furnished to 

24 such individuals at such time and in such manner as 

25 may be required by the Secretary. 


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1 ‘‘(e) OTHER DEFINITIONS AND SPECIAL RULES.—For 

2 purposes of this section— 

3 ‘‘(1) ELIGIBLE INDIVIDUAL.— 

4 ‘‘(A) IN GENERAL.—An individual is an el5 igible individual for a taxable year if during 

6 such taxable year— 

7 ‘‘(i) a disability certification with re8 spect to such individual is filed with the 

9 Secretary for such taxable year, or 

10 ‘‘(ii) the individual has been deter11 mined for purposes of section 223 or 1614 

12 of the Social Security Act (42 U.S.C. 421, 

13 1382c) to meet the criteria of subparagraph 

14 (B) for such taxable year. 

15 ‘‘(B) CRITERIA.—An individual meets the 

16 criteria of this subparagraph for a taxable year 

17 if— 

18 ‘‘(i) in the case of an individual who 

19 has not attained age 19 as of the close of the 

20 taxable year, the individual is either blind 

21 (within the meaning of section 1614(a)(2) 

22 of the Social Security Act (42 U.S.C. 

23 1382c(a)(2))) or disabled within the mean24 ing of section 1614(a)(3)(C) of such Act (42 

25 U.S.C. 1382c(a)(3)(C)), or 


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1 ‘‘(ii) the individual— 

2 ‘‘(I) is either blind (within the 

3 meaning of section 1614(a)(2) of such 

4 Act (42 U.S.C. 1382c(a)(2))) or dis5 abled within the meaning of section 

6 1614(a)(3)(A) of such Act, and 

7 ‘‘(II) such blindness or disability 

8 occurred before the date on which the 

9 individual attained age 26. 

10 ‘‘(2) DISABILITY CERTIFICATION.— 

11 ‘‘(A) IN GENERAL.—The term ‘disability 

12 certification’ means, with respect to an eligible 

13 individual, a certification to the satisfaction of 

14 the Secretary by the eligible individual or the 

15 parent or guardian of the eligible individual 

16 that— 

17 ‘‘(i) the individual meets the criteria 

18 described in paragraph (1)(B), and 

19 ‘‘(ii) includes a copy of the individ20 ual’s diagnosis relating to the individual’s 

21 relevant impairment or impairments, 

22 signed by a physician meeting the criteria 

23 of section 1861(r)(1) of the Social Security 

24 Act. 


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1 ‘‘(B) RESTRICTION ON USE OF CERTIFI2 CATION.—No inference may be drawn from a 

3 disability certification for purposes of estab4 lishing eligibility for benefits under title II, XVI, 

5 or XIX of the Social Security Act. 

6 ‘‘(3) DESIGNATED BENEFICIARY.—The term ‘des7 ignated beneficiary’ in connection with an ABLE ac8 count established under a qualified ABLE program 

9 means— 

10 ‘‘(A) the eligible individual designated at 

11 the commencement of participation in the quali12 fied ABLE program as the beneficiary of 

13 amounts paid (or to be paid) to the program, 

14 and 

15 ‘‘(B) in the case of a change in beneficiaries 

16 described in subparagraph (C)(ii) of subsection 

17 (c)(1), the individual who is the new beneficiary. 

18 ‘‘(4) MEMBER OF FAMILY.—The term ‘member of 

19 the family’ means, with respect to any designated 

20 beneficiary, an individual who bears a relationship to 

21 such beneficiary which is described in subparagraph 

22 section 152(d)(2)(B). For purposes of the preceding 

23 sentence, a rule similar to the rule of section 

24 152(f)(1)(B) shall apply. 


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1 ‘‘(5) QUALIFIED DISABILITY EXPENSES.—The 

2 term ‘qualified disability expenses’ means any ex3 penses related to the eligible individual’s blindness or 

4 disability which are made for the benefit of an eligible 

5 individual who is the designated beneficiary, includ6 ing the following expenses: education, housing, trans7 portation, employment training and support, assist8 ive technology and personal support services, health, 

9 prevention and wellness, financial management and 

10 administrative services, legal fees, expenses for over11 sight and monitoring, funeral and burial expenses, 

12 and other expenses, which are approved by the Sec13 retary under regulations and consistent with the pur14 poses of this section. 

15 ‘‘(6) ABLE ACCOUNT.—The term ‘ABLE ac16 count’ means an account established and maintained 

17 under a qualified ABLE program. 

18 ‘‘(7) CONTRACTING STATE.—The term ‘con19 tracting State’ means a State without a qualified 

20 ABLE program which has entered into a contract 

21 with a State with a qualified ABLE program to pro22 vide residents of the contracting State access to a 

23 qualified ABLE program. 

24 ‘‘(f) TRANSFER TO STATE.—Subject to any out25 standing payments due for qualified disability expenses, in 


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1 the case that the designated beneficiary dies, all amounts 

2 remaining in the qualified ABLE account not in excess of 

3 the amount equal to the total medical assistance paid for 

4 the designated beneficiary after the establishment of the ac5 count, net of any premiums paid from the account or paid 

6 by or on behalf of the beneficiary to a Medicaid Buy-In 

7 program, under any State Medicaid plan established under 

8 title XIX of the Social Security Act shall be distributed to 

9 such State upon filing of a claim for payment by such 

10 State. For purposes of this paragraph, the State shall be 

11 a creditor of an ABLE account and not a beneficiary. Sub12 section (c)(3) shall not apply to a distribution under the 

13 preceding sentence. 

14 ‘‘(g) REGULATIONS.—The Secretary shall prescribe 

15 such regulations or other guidance as the Secretary deter16 mines necessary or appropriate to carry out the purposes 

17 of this section, including regulations— 

18 ‘‘(1) to enforce the 1 ABLE account per eligible 

19 individual limit, 

20 ‘‘(2) providing for the information required to be 

21 presented to open an ABLE account, 

22 ‘‘(3) to generally define qualified disability ex23 penses, 

24 ‘‘(4) developed in consultation with the Commis25 sioner of Social Security, relating to disability certifiVerDate Sep 11 2014 22:16 Nov 12, 2014 Jkt 049200 PO 00000 Frm 00019 Fmt 6652 Sfmt 6203 E:\BILLS\H647.RH H647

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1 cations and determinations of disability, including 

2 those conditions deemed to meet the requirements of 

3 subsection (e)(1)(B)(ii), 

4 ‘‘(5) to prevent fraud and abuse with respect to 

5 amounts claimed as qualified disability expenses, 

6 ‘‘(6) under chapters 11, 12, and 13 of this title, 

7 and 

8 ‘‘(7) to allow for transfers from one ABLE ac9 count to another ABLE account in cases in which 

10 there is a change in the State of residence of an eligi11 ble individual.’’. 

12 (b) TAX ON EXCESS CONTRIBUTIONS.— 

13 (1) IN GENERAL.—Subsection (a) of section 4973 

14 of the Internal Revenue Code of 1986 (relating to tax 

15 on excess contributions to certain tax-favored accounts 

16 and annuities) is amended by striking ‘‘or’’ at the 

17 end of paragraph (4), by inserting ‘‘or’’ at the end of 

18 paragraph (5), and by inserting after paragraph (5) 

19 the following new paragraph: 

20 ‘‘(6) an ABLE account (within the meaning of 

21 section 529A),’’. 

22 (2) EXCESS CONTRIBUTION.—Section 4973 of the 

23 Internal Revenue Code of 1986 is amended by adding 

24 at the end the following new subsection: 


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1 ‘‘(h) EXCESS CONTRIBUTIONS TO ABLE ACCOUNT.— 

2 For purposes of this section— 

3 ‘‘(1) IN GENERAL.—In the case of an ABLE ac4 count (within the meaning of section 529A), the term 

5 ‘excess contributions’ means the amount by which the 

6 amount contributed for the taxable year to such ac7 count (other than contributions under section 

8 529A(c)(1)(C)) exceeds the contribution limit under 

9 section 529A(b)(2)(B). 

10 ‘‘(2) SPECIAL RULE.—For purposes of this sub11 section, any contribution which is distributed out of 

12 the ABLE account in a distribution to which the last 

13 sentence of section 529A(b)(2) applies shall be treated 

14 as an amount not contributed.’’. 

15 (c) PENALTY FOR FAILURE TO FILE REPORTS.—Sec16 tion 6693(a)(2) of the Internal Revenue Code of 1986 is 

17 amended by striking ‘‘and’’ at the end of subparagraph (D), 

18 by redesignating subparagraph (E) as subparagraph (F), 

19 and by inserting after subparagraph (D) the following: 

20 ‘‘(E) section 529A(d) (relating to qualified 

21 ABLE programs), and’’. 

22 (d) CONFORMING AMENDMENTS.— 

23 (1) Section 26(b)(2) of the Internal Revenue 

24 Code of 1986 is amended by striking ‘‘and’’ at the end 

25 of subparagraph (W), by striking the period at the 


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1 end of subparagraph (X) and inserting ‘‘, and’’, and 

2 by inserting after subparagraph (X) the following: 

3 ‘‘(Y) section 529A(c)(3)(A) (relating to ad4 ditional tax on ABLE account distributions not 

5 used for qualified disability expenses).’’. 

6 (2) The heading for part VIII of subchapter F of 

7 chapter 1 of the Internal Revenue Code of 1986 is 

8 amended by striking ‘‘HIGHER EDUCATION’’ and 

9 inserting ‘‘CERTAIN’’. 

10 (3) The item in the table of parts for subchapter 

11 F of chapter 1 of the Internal Revenue Code of 1986 

12 relating to part VIII is amended to read as follows: 

‘‘PART VIII. CERTAIN SAVINGS ENTITIES.’’. 

13 (4) The table of sections for part VIII of sub14 chapter F of chapter 1 of the Internal Revenue Code 

15 of 1986 is amended by inserting after the item relat16 ing to section 529 the following new item: 

‘‘Sec. 529A. Qualified ABLE programs.’’. 

17 (e) EFFECTIVE DATE.— 

18 (1) IN GENERAL.—The amendments made by 

19 this section shall apply to taxable years beginning 

20 after December 31, 2014. 

21 (2) REGULATIONS.—The Secretary of the Treas22 ury (or the Secretary’s designee) shall promulgate the 

23 regulations or other guidance required under section 

24 529A(g) of the Internal Revenue Code of 1986, as 


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1 added by subsection (a), not later than 6 months after 

2 the date of the enactment of this Act. 

3 SEC. 4. TREATMENT OF ABLE ACCOUNTS UNDER CERTAIN 

4 FEDERAL PROGRAMS. 

5 (a) ACCOUNT FUNDS DISREGARDED FOR PURPOSES

6 OF CERTAIN OTHER MEANS-TESTED FEDERAL PRO7 GRAMS.—Notwithstanding any other provision of Federal 

8 law that requires consideration of 1 or more financial cir9 cumstances of an individual, for the purpose of determining 

10 eligibility to receive, or the amount of, any assistance or 

11 benefit authorized by such provision to be provided to or 

12 for the benefit of such individual, any amount (including 

13 earnings thereon) in the ABLE account (within the mean14 ing of section 529A of the Internal Revenue Code of 1986) 

15 of such individual, and any distribution for qualified dis16 ability expenses (as defined in subsection (e)(5) of such sec17 tion) shall be disregarded for such purpose with respect to 

18 any period during which such individual maintains, makes 

19 contributions to, or receives distributions from such ABLE 

20 account, except that, in the case of the supplemental secu21 rity income program under title XVI of the Social Security 

22 Act, a distribution for housing expenses (within the mean23 ing of such subsection) shall not be so disregarded, and in 

24 the case of such program, only the 1st $100,000 of the 


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1 amount (including such earnings) in such ABLE account 

2 shall be so disregarded. 

3 (b) SUSPENSION OF SSI BENEFITS DURING PERIODS

4 OF EXCESSIVE ACCOUNT FUNDS.— 

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

6 under the supplemental security income program 

7 under title XVI of the Social Security Act shall not 

8 be terminated, but shall be suspended, by reason of ex9 cess resources of the individual attributable to an 

10 amount in the ABLE account (within the meaning of 

11 section 529A of the Internal Revenue Code of 1986) 

12 of the individual not disregarded under subsection (a) 

13 of this section. 

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

15 individual who would be receiving payment of such 

16 supplemental security income benefits but for the ap17 plication of the previous sentence shall be treated for 

18 purposes of title XIX of the Social Security Act as if 

19 the individual continued to be receiving payment of 

20 such benefits. 

21 (c) EFFECTIVE DATE.—This section shall take effect 

22 on the date of the enactment of this Act. 


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Union Calendar No. 456 

113TH CONGRESS 

2D SESSION H. R. 647 

[Report No. 113–614, Part I] 

A BILL 

To amend the Internal Revenue Code of 1986 to 

purposes. family members with disabilities, and for other established under State programs for the care of provide for the tax treatment of ABLE accounts 

NOVEMBER 12, 2014 

Reported from the Committee on Ways and Means with 

an amendment 

NOVEMBER 12, 2014 

The Committee on Energy and Commerce discharged; 

the State of the Union and ordered to be printed committed to the Committee of the Whole House on 


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