‘‘(1) LIMITATION
BASED
ON
MODIFIED
AD-
JUSTED GROSS INCOME.— 
‘‘(A) IN
GENERAL.—The amount which 
would (but for this paragraph) be taken into ac-
count under subsection (a) for the taxable year 
shall be reduced (but not below zero) by the 
amount determined under subparagraph (B). 
‘‘(B) 
AMOUNT
OF
REDUCTION.—The 
amount determined under this subparagraph is 
the amount which bears the same ratio to the 
amount which would be so taken into account 
as— 
‘‘(i) the excess of— 
‘‘(I) the taxpayer’s modified ad-
justed gross income for the taxable 
year, over 
‘‘(II) 
the 
applicable 
amount, 
bears to 
‘‘(ii) the phaseout amount. 
‘‘(C) APPLICABLE
AMOUNT; 
PHASEOUT 
AMOUNT.—For purposes of subparagraph (B), 
the applicable amount and the phaseout amount 
shall be determined as follows: 
‘‘The appli-
cable 
amount is: 
The phase-
out amount 
is: 
In the case of a joint return ...................................
$60,000 
$10,000
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‘‘The appli-
cable 
amount is: 
The phase-
out amount 
is: 
In the case of a head of household .........................
$45,000 
$7,500
In any other case ....................................................
$30,000 
$5,000. 
‘‘(D) MODIFIED
ADJUSTED
GROSS
IN-
COME.—For purposes of this paragraph, the 
term ‘modified adjusted gross income’ means 
the adjusted gross income of the taxpayer for 
the taxable year increased by any amount ex-
cluded from gross income under section 911, 
931, or 933. 
‘‘(E) INFLATION
ADJUSTMENT.—In the 
case of any taxable year beginning in a calendar 
year after 2010, each of the applicable amounts 
in the second column of the table in subpara-
graph (C) shall be increased by an amount 
equal to— 
‘‘(i) such dollar amount, multiplied by 
‘‘(ii) the cost-of-living adjustment de-
termined under section 1(f)(3) for the cal-
endar year in which the taxable year be-
gins, determined by substituting ‘calendar 
year 2009’ for ‘calendar year 1992’ in sub-
paragraph (B) thereof. 
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Any increase determined under the preceding 
sentence shall be rounded to the nearest mul-
tiple of $500. 
‘‘(2) 
EARNED
INCOME
LIMITATION.—The 
amount of any deduction allowed under subsection 
(a) with respect to any taxpayer shall not exceed the 
earned income (as defined by section 32(c)(2)) of 
such taxpayer for such taxable year. 
‘‘(c) QUALIFIED INDIVIDUAL.—For purposes of this 
section, the term ‘qualified individual’ means an individual 
with a disability (as defined in section 530A(b)) who is 
the designated beneficiary of an ABLE accounts (as de-
fined by section 530A(a)). 
‘‘(d) QUALIFIED DISABILITY SAVINGS CONTRIBU-
TIONS.—The term ‘qualified disability savings contribu-
tions’ means, with respect to any taxable year, the aggre-
gate contributions made by the taxpayer to the ABLE ac-
count for an individual with a disability (as so defined) 
with respect to which such taxpayer is the qualified indi-
vidual. 
‘‘(e) TREATMENT OF CONTRIBUTIONS BY DEPEND-
ENT.—If a deduction under section 151 with respect to 
an individual is allowed to another taxpayer for a taxable 
year beginning in the calendar year in which such individ-
ual’s taxable year begins— 
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‘‘(1) no deduction shall be allowed under sub-
section (a) to such individual for such individual’s 
taxable year, and 
‘‘(2) any qualified disability savings contribu-
tions made by such individual during such taxable 
year shall be treated for purposes of this section as 
made by such other taxpayer.’’. 
(2) CONFORMING AMENDMENTS.—The table of 
sections for part VII of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended 
redesignating the item relating to section 224 as re-
lating to section 225 and by inserting after the item 
relating to section 223 the following new item: 
‘‘Sec. 224. Contributions to ABLE accounts.’’. 
(b) STUDY.— 
(1) IN GENERAL.—The Secretary of the Treas-
ury (or the Secretary’s delegate), in consultation 
with the Secretary of Health and Human Services, 
shall conduct a study on the use of ABLE accounts 
(as defined by section 530A(a) of the Internal Rev-
enue Code) and the effect of the deduction allowed 
under section 224 of such Code for contributions to 
such accounts. Such study shall consider the effect 
that a tax credit or a refundable matching tax credit 
would have on the use of and contributions to such 
accounts. 
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