Lawmakers Introduce Bicameral Bipartisan Bill to Extend ABLE Account Tax Rules

On Feb. 19, bipartisan bicameral legislation was introduced that would make permanent several provisions of tax-favored ABLE accounts. The bill’s sponsors say that ABLE accounts help people with disabilities save for their future and ease the burden on those who support them.

The Ensuring Nationwide Access to Better Life Experience (ENABLE) Act was introduced in the Senate by Sens. Eric Schmitt (R-MO) and Chris Van Hollen (D-MD). It was introduced in the House by Reps. Lloyd Smucker (R-PA) and Don Beyer (D-VA). The ENABLE Act has multiple bipartisan cosponsors in both chambers of Congress.

The ENABLE Act would make permanent three provisions of current law that are set to expire at the end of 2025. They include:

• ABLE to Work: An individual with a disability who is employed can contribute an additional amount to his or her ABLE account. This additional contribution cannot be greater than either the prior year’s federal poverty level for a one-person household ($15,060 in 2024), or the beneficiary’s yearly compensation.
•  ABLE Saver’s Credit: An individual with a disability who makes qualified contributions to their ABLE account can qualify for a nonrefundable saver’s credit of up to $1,000.
• 529 to ABLE rollover: An individual with a disability may roll over from a 529 education savings account to an ABLE account amounts that are less than or equal to the annual ABLE contribution limit tax and penalty free.

Prospects: Because these expiring provisions are among those in the Tax Cuts and Jobs Act (TCJA) enacted in late 2016, this bill has a reasonably good chance for enactment if Congress succeeds in its Trump-supported effort to extend all the TCJA expiring provisions. NAIFA supports this legislation.

NAIFA Staff Contact: Jayne Fitzgerald – Director – Government Relations, at jfitzgerald@naifa.org.