‘‘(5) QUALIFIED
DISABILITY
EXPENSES.—The 
term ‘qualified disability expenses’ means any ex-
penses related to the eligible individual’s blindness or 
disability which are made for the benefit of an eligible 
individual who is the designated beneficiary, includ-
ing the following expenses: education, housing, trans-
portation, employment training and support, assist-
ive technology and personal support services, health, 
prevention and wellness, financial management and 
administrative services, legal fees, expenses for over-
sight and monitoring, funeral and burial expenses, 
and other expenses, which are approved by the Sec-
retary under regulations and consistent with the pur-
poses of this section. 
‘‘(6) ABLE ACCOUNT.—The term ‘ABLE ac-
count’ means an account established and maintained 
under a qualified ABLE program. 
‘‘(7) CONTRACTING
STATE.—The term ‘con-
tracting State’ means a State without a qualified 
ABLE program which has entered into a contract 
with a State with a qualified ABLE program to pro-
vide residents of the contracting State access to a 
qualified ABLE program. 
‘‘(f) TRANSFER
TO STATE.—Subject to any out-
standing payments due for qualified disability expenses, in 
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the case that the designated beneficiary dies, all amounts 
remaining in the qualified ABLE account not in excess of 
the amount equal to the total medical assistance paid for 
the designated beneficiary after the establishment of the ac-
count, net of any premiums paid from the account or paid 
by or on behalf of the beneficiary to a Medicaid Buy-In 
program, under any State Medicaid plan established under 
title XIX of the Social Security Act shall be distributed to 
such State upon filing of a claim for payment by such 
State. For purposes of this paragraph, the State shall be 
a creditor of an ABLE account and not a beneficiary. Sub-
section (c)(3) shall not apply to a distribution under the 
preceding sentence. 
‘‘(g) REGULATIONS.—The Secretary shall prescribe 
such regulations or other guidance as the Secretary deter-
mines necessary or appropriate to carry out the purposes 
of this section, including regulations— 
‘‘(1) to enforce the 1 ABLE account per eligible 
individual limit, 
‘‘(2) providing for the information required to be 
presented to open an ABLE account, 
‘‘(3) to generally define qualified disability ex-
penses, 
‘‘(4) developed in consultation with the Commis-
sioner of Social Security, relating to disability certifi-
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cations and determinations of disability, including 
those conditions deemed to meet the requirements of 
subsection (e)(1)(B)(ii), 
‘‘(5) to prevent fraud and abuse with respect to 
amounts claimed as qualified disability expenses, 
‘‘(6) under chapters 11, 12, and 13 of this title, 
and 
‘‘(7) to allow for transfers from one ABLE ac-
count to another ABLE account in cases in which 
there is a change in the State of residence of an eligi-
ble individual.’’. 
(b) TAX ON EXCESS CONTRIBUTIONS.— 
(1) IN GENERAL.—Subsection (a) of section 4973 
of the Internal Revenue Code of 1986 (relating to tax 
on excess contributions to certain tax-favored accounts 
and annuities) is amended by striking ‘‘or’’ at the 
end of paragraph (4), by inserting ‘‘or’’ at the end of 
paragraph (5), and by inserting after paragraph (5) 
the following new paragraph: 
‘‘(6) an ABLE account (within the meaning of 
section 529A),’’. 
(2) EXCESS CONTRIBUTION.—Section 4973 of the 
Internal Revenue Code of 1986 is amended by adding 
at the end the following new subsection: 
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‘‘(h) EXCESS CONTRIBUTIONS TO ABLE ACCOUNT.— 
For purposes of this section— 
‘‘(1) IN GENERAL.—In the case of an ABLE ac-
count (within the meaning of section 529A), the term 
‘excess contributions’ means the amount by which the 
amount contributed for the taxable year to such ac-
count 
(other 
than 
contributions 
under 
section 
529A(c)(1)(C)) exceeds the contribution limit under 
section 529A(b)(2)(B). 
‘‘(2) SPECIAL RULE.—For purposes of this sub-
section, any contribution which is distributed out of 
the ABLE account in a distribution to which the last 
sentence of section 529A(b)(2) applies shall be treated 
as an amount not contributed.’’. 
(c) PENALTY FOR FAILURE TO FILE REPORTS.—Sec-
tion 6693(a)(2) of the Internal Revenue Code of 1986 is 
amended by striking ‘‘and’’ at the end of subparagraph (D), 
by redesignating subparagraph (E) as subparagraph (F), 
and by inserting after subparagraph (D) the following: 
‘‘(E) section 529A(d) (relating to qualified 
ABLE programs), and’’. 
(d) CONFORMING AMENDMENTS.— 
(1) Section 26(b)(2) of the Internal Revenue 
Code of 1986 is amended by striking ‘‘and’’ at the end 
of subparagraph (W), by striking the period at the 
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end of subparagraph (X) and inserting ‘‘, and’’, and 
by inserting after subparagraph (X) the following: 
‘‘(Y) section 529A(c)(3)(A) (relating to ad-
ditional tax on ABLE account distributions not 
used for qualified disability expenses).’’. 
(2) The heading for part VIII of subchapter F of 
chapter 1 of the Internal Revenue Code of 1986 is 
amended by striking ‘‘HIGHER EDUCATION’’ and 
inserting ‘‘CERTAIN’’. 
(3) The item in the table of parts for subchapter 
F of chapter 1 of the Internal Revenue Code of 1986 
relating to part VIII is amended to read as follows: 
‘‘PART VIII. CERTAIN SAVINGS ENTITIES.’’. 
(4) The table of sections for part VIII of sub-
chapter F of chapter 1 of the Internal Revenue Code 
of 1986 is amended by inserting after the item relat-
ing to section 529 the following new item: 
‘‘Sec. 529A. Qualified ABLE programs.’’. 
(e) EFFECTIVE DATE.— 
(1) IN
GENERAL.—The amendments made by 
this section shall apply to taxable years beginning 
after December 31, 2014. 
(2) REGULATIONS.—The Secretary of the Treas-
ury (or the Secretary’s designee) shall promulgate the 
regulations or other guidance required under section 
529A(g) of the Internal Revenue Code of 1986, as 
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