[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 4911 Introduced in Senate (IS)]

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118th CONGRESS
  2d Session
                                S. 4911

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


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 31, 2024

   Mr. Casey (for himself, Ms. Hirono, Mr. Wyden, Mr. Welch, Mr. Van 
 Hollen, 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 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:
    ``(dd) ABLE Account Contributions.--
            ``(1) In general.--An applicable employer plan (as defined 
        in subsection (v)(6)(A)) which 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 which 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) Treatment of contributions.--
                    ``(A) No deduction for amounts contributed to able 
                account.--Except as provided in subparagraph (B), a 
                contribution to a qualified ABLE program pursuant to an 
                election under paragraph (1) shall not be treated as a 
                contribution to an applicable employer plan.
                    ``(B) 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 an election under paragraph (1) shall be treated as 
                if such contributions were made to the plan.
            ``(3) Universal availability.--Paragraph (1) shall not 
        apply unless the plan provides that the election described 
        therein is available to all eligible ABLE individuals who are 
        eligible to participate in the plan.
            ``(4) Cash or deferred arrangement.--A plan shall not fail 
        to be treated as including a qualified cash or deferred 
        arrangement described in section 401(k)(1) solely because such 
        plan provides for the election described in paragraph (1).
            ``(5) 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.
            ``(6) Treatment of permissive withdrawals.--An eligible 
        ABLE individual may direct amounts eligible for withdrawal from 
        an eligible contribution arrangement pursuant to section 414(w) 
        to 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 
the Internal Revenue Code of 1986 is amended by redesignating 
subparagraph (B) as subparagraph (C) and by inserting after 
subparagraph (A) the following new subparagraph:
                    ``(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.''.
    (c) Clarification of Availability of Employer Contributions.--
Section 529A(e) of the Internal Revenue Code of 1986 is amended by 
adding at the end the following new paragraph:
            ``(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 to a Qualified 
ABLE Program.--Not later than 1 year after the date of the enactment of 
this Act, the Secretary of the Treasury shall--
            (1) amend the regulations under section 162 of the Internal 
        Revenue Code of 1986 to confirm that contributions made by an 
        employer to a qualified ABLE program described in section 529A 
        of such Code on behalf of an eligible ABLE individual described 
        in section 414(dd)(5) of such Code who is an employee of 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 with respect to such individual; and
            (2) update the publications issued for employers to 
        encourage employers offering a retirement plan with automatic 
        enrollment to notify employees who elect not to contribute to 
        the plan and who may be eligible to contribute to a qualified 
        ABLE program to notify such employees 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 apply to plan and taxable 
        years beginning after the date of the enactment of this Act.
            (2) Clarifications.--The amendment made by subsection (c) 
        and the amendments made pursuant to subsection (d)(1) shall 
        apply to plan and taxable years beginning before, on, or after 
        the date of the enactment of this Act.
    (f) Model Amendment Authority.--The Secretary of the Treasury (or 
such Secretary's delegate) shall promulgate model amendments which 
plans may adopt to implement contributions to qualified ABLE programs 
pursuant to the amendments made by this section.
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