ABLE Tomorrow Act

Bill Number: S. 4498
Origin Chamber: Senate
Congress: 119th Congress, Session 2
Policy Area: Taxation
Status: Introduced
Latest Action: 2026-05-12: Read twice and referred to the Committee on Finance.
Last Updated: 2026-06-25T12:18:24Z

AI-Generated Summary

The ABLE Tomorrow Act amends the Internal Revenue Code of 1986 and related laws to support individuals with disabilities by:

Encouraging tax-advantaged savings through ABLE accounts for qualified disability-related expenses.
Increasing access and use of ABLE accounts, particularly for those receiving Medicaid or Supplemental Security Income (SSI) benefits.
Promoting financial stability for ABLE account holders and the overall program.

Repeal of State Recovery Rules: Prohibits states from seeking adjustment or recovery of Medicaid payments from a beneficiary's ABLE account, even upon death.
Contribution Limit Changes: Removes restrictions on rollovers from 529 plans and creates an exception allowing one-time lump-sum contributions from third-party trusts, life insurance proceeds, or 529 distributions without counting toward annual limits.
Benefit Suspension Delay: Delays suspension of SSI or other benefits for ABLE account holders by adding a two-month notice period before suspension begins.
Employer Contributions to ABLE Accounts: Permits employers to contribute to an employee's ABLE account in lieu of retirement plan contributions, with rules ensuring nondiscrimination compliance and treating such contributions as beneficiary-made for tax purposes.
Information and Awareness Requirements: Mandates that multiple federal and state agencies (including the Social Security Administration, Department of Veterans Affairs, Department of Housing and Urban Development, Medicaid/CHIP agencies, TANF agencies, and others) inform eligible individuals about ABLE programs upon enrollment or benefit receipt.
Awareness Grants: Authorizes the Secretary of the Treasury to award grants to states, tribal governments, or consortia for promoting ABLE accounts, with $50 million authorized annually from fiscal years 2027 through 2031; grantees must report on accounts established.

Amends Section 529A of the Internal Revenue Code to eliminate the state Medicaid recovery provision in 529A(f) and add exceptions to contribution limits in 529A(b).
Modifies Section 414 of the Internal Revenue Code to allow flexible employer contributions to ABLE accounts from defined contribution plans.
Updates the Social Security Act (titles XVI, XIX, and others), the Rehabilitation Act of 1973, the Individuals with Disabilities Education Act, and various agency statutes to require ABLE program information dissemination.
Extends or clarifies provisions from the Stephen Beck, Jr., ABLE Act of 2014 and the SECURE 2.0 Act of 2022.

Government Agencies: Requires additional outreach and notification duties for agencies like the Social Security Administration, Department of Veterans Affairs, state Medicaid programs, and others, potentially increasing administrative workloads.
Citizens: Expands eligibility and flexibility for people with disabilities to save without losing benefit eligibility, with improved education on account setup.
International Relations: No direct provisions or impacts addressed.

Individuals with disabilities eligible for ABLE accounts (including those with onset before age 46).
Families and designated beneficiaries of ABLE accounts.
Federal agencies (e.g., Social Security Administration, Department of the Treasury, Department of Housing and Urban Development).
State agencies (e.g., Medicaid, TANF, vocational rehabilitation programs).
Employers offering retirement plans.
Nonprofit agencies and tribal governments involved in disability services.

Alters tax code treatment of contributions and rollovers, potentially affecting IRS enforcement and employer plan compliance.
Limits state authority over Medicaid estate recovery, creating uniformity across states.
Imposes new statutory duties on agencies without altering core constitutional structures, such as federalism or individual rights.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.