ABLE Employment Flexibility Act
Bill: H.R.4672 | Sponsor: Rep. Suozzi, Thomas R. (D-NY)
Policy area: Taxation

Summary:
ABLE Employment Flexibility Act
This bill permits employers to make tax-exempts contributions to ABLE (Achieving Better Life Experience) accounts in lieu of making contributions to existing tax-exempt defined contribution retirement plans. An ABLE account is established to pay the expenses (e.g., food, education, housing, transportation, employment training and support, and health care expenses) of a designated beneficiary who is disabled.

To amend the Internal Revenue Code to allow employers to contribute to 
        ABLE accounts in lieu of retirement plan contributions.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``ABLE Employment Flexibility Act''.

SEC. 2. PROTECTING WORKING ABLE INDIVIDUALS FROM LOSING BENEFITS 
              BECAUSE OF RETIREMENT PLAN RULES.

    (a) In General.--Section 414 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new subsection:
    ``(aa) ABLE Account Contributions.--
            ``(1) In general.--An applicable employer plan (as defined 
        in subsection (v)(6)(A)) that is a defined contribution plan 
        shall not be treated as failing to meet any requirement of this 
        title solely because the plan provides that an eligible ABLE 
        individual may elect for a plan year that employer 
        contributions that would otherwise be made under the terms of 
        the plan for such plan year shall (in lieu of contribution to 
        the plan) be contributed by the employer to a qualified ABLE 
        program described in section 529A on behalf of such eligible 
        ABLE individual.
            ``(2) No deduction for amounts contributed to able 
        account.--Except as provided in paragraph (4), amounts 
        contributed pursuant to the election under paragraph (1) to a 
        qualified ABLE program shall not be treated as a contribution 
        to an applicable employer plan.
            ``(3) Universal availability.--Paragraph (1) shall not 
        apply unless the plan provides the election described therein 
        is available to all eligible ABLE individuals who are eligible 
        to participate in the plan.
            ``(4) Application of nondiscrimination rules.--Under rules 
        prescribed by the Secretary, for purposes of applying sections 
        401(a)(4), 401(k)(3), 401(k)(12), 401(k)(13), 401(m)(2), 
        403(b)(12), 408(k)(3), 408(p)(2)(iii), 408(p)(2)(B), 410, and 
        416, contributions made to a qualified ABLE program pursuant to 
        the election made described in paragraph (1) shall be treated 
        as if such contributions were made to the plan.
            ``(5) Cash or deferred arrangement.--A plan shall not fail 
        to include a qualified cash or deferred arrangement described 
        in section 401(k)(1) solely because such plan provides for the 
        election described in paragraph (1).
            ``(6) Eligible able individual.--For purposes of this 
        subsection, the term `eligible ABLE individual' means an 
        employee who, as of the first day of a plan year, is an 
        eligible individual within the meaning of section 529A(e)(1) 
        for the taxable year containing such first day of the plan 
        year.
            ``(7) Treatment of permissive withdrawals.--An eligible 
        ABLE individual may direct that amounts eligible for withdrawal 
        from an eligible contribution arrangement pursuant to section 
        414(w) be contributed to a qualified ABLE program described in 
        section 529A on behalf of such eligible ABLE individual.''.
    (b) Treatment as Beneficiary Contribution.--Section 529A(b)(7) of 
such Code is amended by redesignating subparagraph (B) as subparagraph 
(C) and inserting as subparagraph (B):
                    ``(B) Employer contributions.--Contributions made 
                to a qualified ABLE program by an employer on behalf of 
                a designated beneficiary described in this paragraph 
                pursuant to paragraph (1) or (6) of section 414(a)(a) 
                shall be treated as made by the designated beneficiary 
                for purposes of paragraph (2)(B)(ii).''.
    (c) Clarification of Availability of Employer Contributions.--
Section 529A(e) of such Code is amended by adding the following 
paragraph (7) at the end thereof:
            ``(7) Employer contributions.--An employer of an eligible 
        individual may contribute to any qualified ABLE program for 
        which the eligible individual is the designated beneficiary, 
        including through a contribution matching a contribution made 
        by such eligible individual to the qualified ABLE program.''.
    (d) Deduction for Contributions Remitted by Employer a Qualified 
ABLE Program.--No later than 1 year after enactment, the Secretary of 
the Treasury shall--
            (1) amend Treasury Regulations under section 162 of such 
        Code to confirm that contributions made by an employer to a 
        qualified ABLE program described in section 529A of such Code 
        on behalf of a eligible ABLE individual described in section 
        414(aa)(5) of such Code who provides personal services to such 
        employer shall be considered a reasonable allowance for 
        salaries or other compensation for personal service if such 
        contribution for a year, taking into account all other 
        contributions to such qualified ABLE program does not exceed 
        the maximum contribution described in section 529A(b)(2)(B) of 
        such Code; and
            (2) update the publications issued for employers to 
        encourage employers offering a retirement plan with automatic 
        enrollment to notify employees that elect not to contribute to 
        the plan and that may be eligible to contribute to a qualified 
        ABLE program to notify such employee of the possibility of a 
        contribution under section 529A(b)(2)(B)(ii) of such Code.
    (e) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall be effective for plan and 
        taxable years beginning after enactment.
            (2) Clarifications.--Subsections (c) and (d)(1) shall be 
        effective for plan and taxable years beginning before, on, and 
        after enactment.
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