[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 2522 Introduced in Senate (IS)]

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118th CONGRESS
  1st Session
                                S. 2522

To amend the Internal Revenue Code of 1986 to provide matching payments 
 for ABLE account contributions by certain individuals, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 26, 2023

Mr. Casey (for himself, Mr. Wyden, Ms. Klobuchar, Mr. Sanders, and Ms. 
  Duckworth) 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 matching payments 
 for ABLE account contributions by certain individuals, and for other 
                               purposes.

    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 MATCH (Making Able a Tool to 
Combat Hardship) Act''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) People with disabilities are more than twice as likely 
        to live in poverty than people without disabilities.
            (2) Households containing an adult with a disability that 
        limits their ability to work requires, on average, 28 percent 
        more income to obtain the same standard of living as similar 
        households without a member with a disability.
            (3) The average income of households that include any 
        working-age people with disabilities is $27,500 less than the 
        average household income of people without disabilities.
            (4) The Stephen Beck, Jr., Achieving a Better Life 
        Experience Act of 2014 provided for qualified ABLE programs, 
        which provided eligible people with disabilities the 
        opportunity to open tax-advantaged savings accounts without the 
        risk of losing the benefits they need to participate in 
        society.
            (5) As of March 2023, there were 144,068 ABLE accounts open 
        in the United States with an average balance of $9,715.

SEC. 3. PURPOSES.

    The purposes of this Act are--
            (1) to encourage and assist individuals with disabilities 
        with fewer resources to save using ABLE accounts;
            (2) to increase uptake and continued utilization of ABLE 
        accounts by people with disabilities, especially those 
        individuals receiving benefits under the Medicaid program 
        established under title XIX of the Social Security Act and the 
        program for supplemental security income benefits established 
        under title XVI of such Act; and
            (3) to provide for a Federal match for new and existing 
        ABLE accounts held by individuals with an annual income less 
        than 200 percent of the Federal poverty limit.

SEC. 4. MATCHING PAYMENTS FOR ABLE ACCOUNT CONTRIBUTIONS BY CERTAIN 
              INDIVIDUALS.

    (a) In General.--Subchapter B of chapter 65 of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new section:

``SEC. 6434. MATCHING PAYMENTS FOR ABLE ACCOUNT CONTRIBUTIONS BY 
              CERTAIN INDIVIDUALS.

    ``(a) In General.--
            ``(1) Allowance of credit.--Any individual who is the 
        designated beneficiary of an ABLE account as of the last day of 
        the taxable year and who makes qualified ABLE account 
        contributions for such taxable year shall be allowed a credit 
        for such taxable year in an amount equal to the applicable 
        percentage of so much of the qualified ABLE account 
        contributions made by such individual for the taxable year as 
        does not exceed $2,000.
            ``(2) Payment of credit.--
                    ``(A) In general.--The credit under this section 
                shall be--
                            ``(i) treated as allowed by subpart C of 
                        part IV of subchapter A of chapter 1, and
                            ``(ii) paid by the Secretary as a 
                        contribution (as soon as practicable after the 
                        individual has filed a tax return making a 
                        claim for such credit for the taxable year) to 
                        the ABLE account of the individual.
                    ``(B) Exception.--In the case of an individual who 
                elects the application of this subparagraph and with 
                respect to whom the credit determined under paragraph 
                (1) is greater than zero but less than $50 for the 
                taxable year, subparagraph (A)(ii) shall not apply.
    ``(b) Overall Limitation.--The amount of the credit allowed under 
this section with respect to any individual shall not exceed the excess 
of--
            ``(1) the amount in effect under section 529A(b)(2)(B) for 
        the taxable year, over
            ``(2) the amount of contributions made to the ABLE account 
        of the individual for such taxable year.
    ``(c) Applicable Percentage.--For purposes of this section--
            ``(1) In general.--Except as provided in paragraph (2), the 
        applicable percentage is 100 percent.
            ``(2) Phaseout.--The percentage under paragraph (1) shall 
        be reduced (but not below zero) by the number of percentage 
        points which bears the same ratio to 100 percentage points as--
                    ``(A) the excess of--
                            ``(i) the taxpayer's modified adjusted 
                        gross income for such taxable year, over
                            ``(ii) the applicable dollar amount, bears 
                        to
                    ``(B) $20,000.
        If any reduction determined under this paragraph is not a whole 
        percentage point, such reduction shall be rounded to the next 
        lowest whole percentage point.
            ``(3) Applicable dollar amount.--The applicable dollar 
        amount is--
                    ``(A) in the case of a joint return, $56,000,
                    ``(B) in the case of a head of household (as 
                defined in section 2(b)), \3/4\ of the amount 
                applicable under subparagraph (A), and
                    ``(C) in any other case, \1/2\ of the amount 
                applicable under subparagraph (A).
    ``(d) Qualified ABLE Account Contributions.--For purposes of this 
section--
            ``(1) In general.--The term `qualified ABLE account 
        contributions' means, with respect to any taxable year, the 
        amount of contributions made by the individual to the ABLE 
        account of which such individual is the designated beneficiary. 
        Such term shall not include any amount attributable to a 
        payment under subsection (a)(2).
            ``(2) Reduction for certain distributions.--
                    ``(A) In general.--The qualified ABLE account 
                contributions determined under paragraph (1) for a 
                taxable year shall be reduced (but not below zero) by 
                the aggregate distributions received by the individual 
                during the testing period from the ABLE account.
                    ``(B) Testing period.--For purposes of subparagraph 
                (A), the testing period, with respect to a taxable 
                year, is the period which includes--
                            ``(i) such taxable year,
                            ``(ii) the 2 preceding taxable years, and
                            ``(iii) the period after such taxable year 
                        and before the due date (including extensions) 
                        for filing the return of tax for such taxable 
                        year.
                    ``(C) Excepted distributions.--There shall not be 
                taken into account under subparagraph (A) the amount of 
                distributions under a qualified ABLE program (within 
                the meaning of section 529A) that is equal to amounts 
                not included in gross income with respect to such 
                distributions under section 529A(c)(1)(B) (relating to 
                distributions for qualified disability expenses).
                    ``(D) Treatment of distributions received by spouse 
                of individual.--For purposes of determining 
                distributions received by an individual under 
                subparagraph (A) for any taxable year, any distribution 
                received by the spouse of such individual shall be 
                treated as received by such individual if such 
                individual and spouse file a joint return for such 
                taxable year and for the taxable year during which the 
                spouse receives the distribution.
    ``(e) ABLE Account.--For purposes of this section, the term `ABLE 
account' has the meaning given such term under section 529A.
    ``(f) Other Definitions and Special Rules.--
            ``(1) Modified adjusted gross income.--For purposes of this 
        section, the term `modified adjusted gross income' means 
        adjusted gross income determined without regard to sections 
        911, 931, and 933.
            ``(2) Erroneous credits.--
                    ``(A) In general.--If any contribution is 
                erroneously paid under subsection (a)(2), including a 
                payment that is not made to an ABLE account, the amount 
                of such erroneous payment shall be treated as an 
                underpayment of tax (other than for purposes of part II 
                of subchapter A of chapter 68) for the taxable year in 
                which the Secretary determines the payment is 
                erroneous.
                    ``(B) Distribution of erroneous credits.--In the 
                case of a contribution to which subparagraph (A) 
                applies, section 72 shall not apply to the distribution 
                of such contribution (and any income attributable 
                thereto) if such distribution is received not later 
                than the day prescribed by law (including extensions of 
                time) for filing the individual's return for such 
                taxable year.
            ``(3) Exception from reduction or offset.--Any payment made 
        to any individual under this section shall not be--
                    ``(A) subject to reduction or offset pursuant to 
                subsection (c), (d), (e), or (f) of section 6402 or any 
                similar authority permitting offset, or
                    ``(B) reduced or offset by other assessed Federal 
                taxes that would otherwise be subject to levy or 
                collection.
    ``(g) Inflation Adjustments.--
            ``(1) In general.--In the case of any taxable year 
        beginning in a calendar year after 2027, the $56,000 amount in 
        subsection (c)(3)(A) shall be increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins, determined by substituting 
                `calendar year 2026' for `calendar year 2016' in 
                subparagraph (A)(ii) thereof.
            ``(2) Rounding.--Any increase determined under paragraph 
        (1) shall be rounded to the nearest multiple of $1,000.''.
    (b) Treatment of Certain Possessions.--
            (1) Payments to possessions with mirror code tax systems.--
        The Secretary of the Treasury shall pay to each possession of 
        the United States which has a mirror code tax system amounts 
        equal to the loss (if any) to that possession by reason of the 
        amendments made by this section. Such amounts shall be 
        determined by the Secretary of the Treasury based on 
        information provided by the government of the respective 
        possession.
            (2) Payments to other possessions.--The Secretary of the 
        Treasury shall pay to each possession of the United States 
        which does not have a mirror code tax system amounts estimated 
        by the Secretary of the Treasury as being equal to the 
        aggregate benefits (if any) that would have been provided to 
        residents of such possession by reason of the amendments made 
        by this section if a mirror code tax system had been in effect 
        in such possession. The preceding sentence shall not apply 
        unless the respective possession has a plan, which has been 
        approved by the Secretary of the Treasury, under which such 
        possession will promptly distribute such payments to its 
        residents.
            (3) Coordination with credit allowed against united states 
        income taxes.--No credit shall be allowed against United States 
        income taxes under section 6434 of the Internal Revenue Code of 
        1986 (as added by this section) to any person--
                    (A) to whom a credit is allowed against taxes 
                imposed by the possession by reason of the amendments 
                made by this section, or
                    (B) who is eligible for a payment under a plan 
                described in paragraph (2).
            (4) Mirror code tax system.--For purposes of this 
        subsection, the term ``mirror code tax system'' means, with 
        respect to any possession of the United States, the income tax 
        system of such possession if the income tax liability of the 
        residents of such possession under such system is determined by 
        reference to the income tax laws of the United States as if 
        such possession were the United States.
            (5) Treatment of payments.--For purposes of section 1324 of 
        title 31, United States Code, the payments under this 
        subsection shall be treated in the same manner as a refund due 
        from a credit provision referred to in subsection (b)(2) of 
        such section.
    (c) Deficiencies.--Section 6211(b)(4) of the Internal Revenue Code 
of 1986 is amended by striking ``and 6433'' and inserting ``6433, and 
6434''.
    (d) Payment Authority.--Section 1324(b)(2) of title 31, United 
States Code, is amended by striking ``or 6433'' and inserting ``6433, 
or 6434''.
    (e) Conforming Amendments.--
            (1) Subpart A of part IV of subchapter A of chapter 1 of 
        the Internal Revenue Code of 1986 is amended by striking 
        section 25B (and the item related to such section in the table 
        of sections for such subpart).
            (2) The table of sections for subchapter B of chapter 65 of 
        such Code is amended by adding at the end the following new 
        item:

``Sec. 6434. Matching payments for ABLE account contributions by 
                            certain individuals.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2026.

SEC. 5. DEMOGRAPHIC REPORTING WITH RESPECT TO ABLE ACCOUNTS.

    (a) In General.--Section 529A(d)(1) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new sentence: ``In 
addition to the information required under the preceding sentence, each 
officer or employee having control of the qualified ABLE program of 
their designee shall include in reports provided to the Secretary 
demographic information (including race, gender, and disability type) 
relating to the designated beneficiaries of ABLE accounts under the 
program.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to reports made after the date of the enactment of this section.

SEC. 6. GRANTS TO PROMOTE USE OF ABLE ACCOUNTS AND THE MATCHING 
              CONTRIBUTION CREDIT.

    (a) In General.--The Secretary of the Treasury (or the Secretary's 
delegate) may award grants to States to enable States to promote ABLE 
accounts (as defined in section 529A(e) of the Internal Revenue Code of 
1986) and matching payments for contributions to such accounts (as 
provided under section 6434 of such Code, as added by this Act).
    (b) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $5,000,000 for each of fiscal 
years 2025 through 2029.
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