ABLE to Work Act of 2016

Bill: 114-s-2702
Sponsor: full_name: Sen. Burr, Richard [R-NC]
Introduced: 2016-03-17
Policy area: Taxation
Subjects: Bank accounts, deposits, capital

Disability and paralysis

Employee benefits and pensions

Income tax credits

Income tax exclusion
Latest action: action_date: 2016-03-17
text: Read twice and referred to the Committee on Finance.

Summaries:
action_date: 2016-03-17
action_desc: Introduced in Senate
text: <p><strong>ABLE to Work Act of 2016</strong></p> <p>This bill amends the Internal Revenue Code, with respect to ABLE accounts (tax-exempt savings accounts for persons with a disability), to allow: (1) an ABLE account beneficiary to make contributions to an ABLE account equal to the lesser of such beneficiary's compensation or an amount equal to the federal poverty line for a one-person household, and (2) a retirement savings tax credit for contributions to an ABLE account. </p>

tv_txt: II 114th CONGRESS 2d Session S. 2702 IN THE SENATE OF THE UNITED STATES March 17, 2016 Mr. Burr (for himself and Mr. Casey ) 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 allow individuals with disabilities to save additional amounts in their ABLE accounts above the current annual maximum contribution if they work and earn income.

1. Short title This Act may be cited as the ABLE to Work Act of 2016 . 2. Increased contributions to ABLE accounts from compensation of individuals with disabilities (a) In general Section 529A(b)(2)(B) of the Internal Revenue Code of 1986 is amended to read as follows: (B) except in the case of contributions under subsection (c)(1)(C), if such contribution to an ABLE account would result in aggregate contributions from all contributors to the ABLE account for the taxable year exceeding the sum of— (i) the amount in effect under section 2503(b) for the calendar year in which the taxable year begins, plus (ii) in the case of a designated beneficiary described in paragraph (7), the lesser of— (I) compensation (as defined in section 414(s)) of the designated beneficiary for the taxable year, or (II) an amount equal to the poverty line for a one-person household, as determined for the calendar year preceding the calendar year in which the taxable year begins. . (b) Eligible designated beneficiary Section 529A(b) of such Code is amended by adding at the end the following: (7) Special rules related to contribution limit For purposes of paragraph (2)(B)— (A) Designated beneficiary A designated beneficiary described in this paragraph is an employee (including an employee within the meaning of section 401(c)) with respect to whom no contribution is made to— (i) a defined contribution plan (within the meaning of section 414(i)), (ii) an annuity contract described in section 403(b), and (iii) an eligible deferred compensation plan described in section 457(b) of the employee for the taxable year. (B) Poverty line The term poverty line has the meaning given such term by section 673 of the Community Services Block Grant Act ( 42 U.S.C. 9902 ). . (c) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 3. Allowance of saver’s credit for ABLE contributions by account holder (a) In general Section 25B(d)(1) of the Internal Revenue Code of 1986 is amended by striking and at the end of subparagraph (B)(ii), by striking the period at the end of subparagraph (C) and inserting , and , and by inserting at the end the following: (D) the amount of contributions by such individual to the ABLE account (within the meaning of section 529A) of which such individual is the designated beneficiary. . (b) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.