II 

113TH CONGRESS 

1ST SESSION S. 313 

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 

FEBRUARY 13, 2013 

Mr. CASEY (for himself, Mr. BURR, Mr. HARKIN, Mr. CARDIN, Mr. RUBIO, 

Mr. FRANKEN, Mr. MORAN, Mr. REED, Mr. LEAHY, Mrs. BOXER, Mr. 

BROWN, Mr. SANDERS, Mr. BLUMENTHAL, Ms. BALDWIN, Mr. BLUNT, 

Mr. COONS, Mr. JOHANNS, and Mrs. GILLIBRAND) 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 2013’’ or the ‘‘ABLE Act of 

6 2013’’. 


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1 SEC. 2. PURPOSES. 

2 The purposes of this Act are as follows: 

3 (1) To encourage and assist individuals and 

4 families in saving private funds for the purpose of 

5 supporting individuals with disabilities to maintain 

6 health, independence, and quality of life. 

7 (2) To provide secure funding for disability-re8 lated expenses on behalf of designated beneficiaries 

9 with disabilities that will supplement, but not sup10 plant, benefits provided through private insurance, 

11 the Medicaid program under title XIX of the Social 

12 Security Act, the supplemental security income pro13 gram under title XVI of such Act, the beneficiary’s 

14 employment, and other sources. 

15 SEC. 3. ABLE ACCOUNTS. 

16 (a) ESTABLISHMENT.— 

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

18 Revenue Code of 1986 is amended by redesignating 

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

20 after subsection (e) the following new subsection: 

21 ‘‘(f) ABLE ACCOUNTS.— 

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

23 other provision of law with respect to a qualified 

24 ABLE program and an ABLE account, except as 

25 otherwise provided in this subsection— 


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

2 ABLE account shall be treated in the same 

3 manner as a qualified tuition program and an 

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

5 respectively, are treated, 

6 ‘‘(B) qualified disability expenses with re7 spect to a program or account described in sub8 paragraph (A) shall be treated in the same 

9 manner as qualified higher education expenses 

10 are treated, and 

11 ‘‘(C) maximum contributions shall be no 

12 higher than the limit established by the State 

13 for their regular 529 account. 

14 ‘‘(2) QUALIFIED ABLE PROGRAM.—For pur15 poses of this subsection, the term ‘qualified ABLE 

16 program’ means a program established and main17 tained by a State or agency or instrumentality there18 of— 

19 ‘‘(A) under which a person may make con20 tributions to an ABLE account which is estab21 lished for the purpose of meeting the qualified 

22 disability expenses of the designated beneficiary 

23 of the account, 

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

25 preceding subsections of this section (as modiVerDate Mar 15 2010 03:49 Feb 23, 2013 Jkt 029200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S313.IS S313

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1 fied by this subsection), determined by sub2 stituting— 

3 ‘‘(i) ‘qualified ABLE program’ for 

4 ‘qualified tuition program’, and 

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

6 and 

7 ‘‘(C) which meets the other requirements 

8 of this subsection. 

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

10 purposes of this subsection— 

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

12 disability expenses’ means any expenses which 

13 are made for the benefit of an individual with 

14 a disability who is a designated beneficiary. 

15 ‘‘(B) EXPENSES INCLUDED.—The fol16 lowing expenses shall be qualified disability ex17 penses if such expenses are made for the benefit 

18 of an individual with a disability who is a des19 ignated beneficiary and are related to such dis20 ability: 

21 ‘‘(i) EDUCATION.—Expenses for edu22 cation, including tuition for preschool thru 

23 post-secondary education, which shall in24 clude higher education expenses (as de25 fined by subsection (e)(3)) and expenses 


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1 for books, supplies, and educational mate2 rials related to preschool and secondary 

3 education, tutors, and special education 

4 services. 

5 ‘‘(ii) HOUSING.—Expenses for a pri6 mary residence, including rent, purchase of 

7 a primary residence or an interest in a pri8 mary residence, mortgage payments, real 

9 property taxes, and utility charges. 

10 ‘‘(iii) TRANSPORTATION.—Expenses 

11 for transportation, including the use of 

12 mass transit, the purchase or modification 

13 of vehicles, and moving expenses. 

14 ‘‘(iv) EMPLOYMENT SUPPORT.—Ex15 penses related to obtaining and maintain16 ing employment, including job-related 

17 training, assistive technology, and personal 

18 assistance supports. 

19 ‘‘(v) HEALTH, PREVENTION, AND

20 WELLNESS.—Expenses for health and 

21 wellness, including premiums for health in22 surance, mental health, medical, vision, 

23 and dental expenses, habilitation and reha24 bilitation services, durable medical equip25 ment, therapy, respite care, long-term servVerDate Mar 15 2010 03:49 Feb 23, 2013 Jkt 029200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S313.IS S313

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1 ices and supports, nutritional management, 

2 communication services and devices, adapt3 ive equipment, assistive technology, and 

4 personal assistance. 

5 ‘‘(vi) MISCELLANEOUS EXPENSES.— 

6 Financial management and administrative 

7 services; legal fees; expenses for oversight; 

8 monitoring; home improvements, and modi9 fications, maintenance and repairs, at pri10 mary residence; or funeral and burial ex11 penses. 

12 ‘‘(vii) ASSISTIVE TECHNOLOGY AND

13 PERSONAL SUPPORT SERVICES.—Expenses 

14 for assistive technology and personal sup15 port with respect to any item described in 

16 clauses (i) through (vi). 

17 ‘‘(viii) OTHER APPROVED EX18 PENSES.—Any other expenses which are 

19 approved by the Secretary under regula20 tions and consistent with the purposes of 

21 this section. 

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

23 ‘‘(i) IN GENERAL.—Except as pro24 vided in clause (ii), an individual is an inVerDate Mar 15 2010 03:49 Feb 23, 2013 Jkt 029200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S313.IS S313

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1 dividual with a disability for a year if the 

2 individual (regardless of age)— 

3 ‘‘(I) has a medically determinable 

4 physical or mental impairment, which 

5 results in marked and severe func6 tional limitations, and which can be 

7 expected to result in death or which 

8 has lasted or can be expected to last 

9 for a continuous period of not less 

10 than 12 month, or 

11 ‘‘(II) is blind. 

12 ‘‘(ii) DISABILITY CERTIFICATION RE13 QUIRED.—An individual shall not be treat14 ed as an individual with a disability for a 

15 year unless the individual— 

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

17 of title XIX of the Social Security 

18 Act, is deemed to be, or treated as, re19 ceiving by the State Medicaid Agency) 

20 benefits under the supplemental secu21 rity income program under title XVI 

22 of such Act, or whose benefits under 

23 such program are suspended other 

24 than by reason of misconduct, 


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1 ‘‘(II) is receiving disability bene2 fits under title II of such Act, or 

3 ‘‘(III) files a disability certifi4 cation with the Secretary for such 

5 year. 

6 ‘‘(iii) DISABILITY CERTIFICATION DE7 FINED.—The term ‘disability certification’ 

8 means, with respect to an individual, a cer9 tification to the satisfaction of the Sec10 retary by the designated beneficiary or the 

11 parent or guardian of the designated bene12 ficiary that— 

13 ‘‘(I) the individual meets the cri14 teria described in clause (i), and 

15 ‘‘(II) includes a copy of the des16 ignated beneficiary’s diagnosis, signed 

17 by a physician meeting the criteria of 

18 section 1861(r)(1) of the Social Secu19 rity Act. 

20 ‘‘(iv) RESTRICTION ON USE OF CER21 TIFICATION.—No inference may be drawn 

22 from a disability certification for purposes 

23 of establishing eligibility for benefits under 

24 title II, XVI, or XIX of the Social Security 

25 Act. 


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1 ‘‘(4) ROLLOVERS FROM ABLE ACCOUNTS.—Sub2 section (c)(3)(A) shall not apply to any amount paid 

3 or distributed from an ABLE account to the extent 

4 that the amount received is paid, not later than the 

5 60th day after the date of such payment or distribu6 tion, into— 

7 ‘‘(A) another ABLE account for the ben8 efit of— 

9 ‘‘(i) the same beneficiary, or 

10 ‘‘(ii) an individual with a disability 

11 who is a family member of the beneficiary, 

12 ‘‘(B) any trust which is described in sub13 paragraph (A) or (C) of section 1917(d)(4) of 

14 the Social Security Act and which is for the 

15 benefit of an individual described in clause (i) 

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

17 ‘‘(C) a qualified tuition program— 

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

19 beneficiary, or 

20 ‘‘(ii) to the credit of another des21 ignated beneficiary under a qualified tui22 tion program who is a member of the fam23 ily of the designated beneficiary with re24 spect to which the distribution was made. 


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1 The preceding sentence shall not apply to any pay2 ment or distribution if it applied to any prior pay3 ment or distribution during the 12-month period 

4 ending on the date of the payment or distribution. 

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

6 outstanding payments due for qualified disability ex7 penses, in the case that the designated beneficiary 

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

9 all amounts remaining in the qualified ABLE ac10 count not in excess of the amount equal to the total 

11 medical assistance paid for the designated bene12 ficiary after the establishment of the account, net of 

13 any premiums paid from the account or paid by or 

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

15 program, under any State Medicaid plan established 

16 under title XIX of the Social Security Act shall be 

17 distributed to such State upon filing of a claim for 

18 payment by such State. For purposes of this para19 graph, the State shall be a creditor of an ABLE ac20 count and not a beneficiary. Subsection (c)(3) shall 

21 not apply to a distribution under the preceding sen22 tence. 

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

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

25 Secretary may prescribe such regulations or other 


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1 guidance as the Secretary determines necessary or 

2 appropriate to carry out the purposes of this section, 

3 including regulations to prevent fraud and abuse 

4 with respect to amounts claimed as qualified dis5 ability expenses.’’. 

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

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

8 1986 such Code is amended by striking ‘‘and’’ at the 

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

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

11 and by inserting after subparagraph (E) the fol12 lowing new subparagraph: 

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

14 (relating to ABLE accounts).’’. 

15 (b) ANNUAL REPORTS.— 

16 (1) IN GENERAL.—The Secretary of the Treas17 ury shall report annually to Congress on the usage 

18 of ABLE accounts under section 529(f) of the Inter19 nal Revenue Code of 1986. 

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

21 paragraph (1) may include— 

22 (A) the number of people with an ABLE 

23 account, 

24 (B) the total amount of contributions to 

25 such accounts, 


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1 (C) the total amount and nature of dis2 tributions from such accounts, 

3 (D) issues relating to the abuse of such ac4 counts, if any, and 

5 (E) the amounts repaid from such ac6 counts to State Medicaid programs established 

7 under title XIX of the Social Security Act. 

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

9 this section shall apply to taxable years beginning after 

10 the date of the enactment of this Act. 

11 SEC. 4. TREATMENT OF ABLE ACCOUNTS UNDER CERTAIN 

12 FEDERAL PROGRAMS. 

13 (a) ACCOUNT FUNDS DISREGARDED FOR PURPOSES

14 OF CERTAIN OTHER MEANS-TESTED FEDERAL PRO15 GRAMS.—Notwithstanding any other provision of Federal 

16 law that requires consideration of 1 or more financial cir17 cumstances of an individual, for the purpose of deter18 mining eligibility to receive, or the amount of, any assist19 ance or benefit authorized by such provision to be provided 

20 to or for the benefit of such individual, any amount (in21 cluding earnings thereon) in any ABLE account (as de22 fined in section 529(f) of the Internal Revenue Code of 

23 1986) of such individual, and any distribution for qualified 

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

25 section) shall be disregarded for such purpose with respect 


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1 to any period during which such individual maintains, 

2 makes contributions to, or receives distributions from such 

3 ABLE account, except that, in the case of the supple4 mental security income program under title XVI of the 

5 Social Security Act, a distribution for housing expenses 

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

7 shall not be so disregarded, and in the case of such pro8 gram, only the 1st $100,000 of the amount (including 

9 such earnings) in such ABLE account shall be so dis10 regarded. 

11 (b) SUSPENSION OF SSI BENEFITS DURING PERI12 ODS OF EXCESSIVE ACCOUNT FUNDS.— 

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

14 under the supplemental security income program 

15 under title XVI of the Social Security Act shall not 

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

17 excess resources of the individual attributable to an 

18 amount in the ABLE account (as defined in section 

19 529(f) of the Internal Revenue Code of 1986) of the 

20 individual not disregarded under subsection (a) of 

21 this section. 

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

23 individual who would be receiving payment of such 

24 supplemental security income benefits but for the 

25 application of the previous sentence shall be treated 


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1 for purposes of title XIX of the Social Security Act 

2 as if the individual continued to be receiving pay3 ment of such benefits. 

Æ 


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