ATR Supports H.R. 647, the ABLE Act
On Wednesday, the U.S. House of Representatives will consider H.R. 647, the ABLE (Achieving a Better Life Experience) Act of 2014. ATR is supportive of this legislation and urges Members to vote for it.
H.R. 647 is a net tax cut.
At its heart, the ABLE Act creates a brand new tax-advantaged savings account vehicle. A new form of 529 college savings plan is authorized under tax law. They would work much like existing 529 plans: money goes in after tax, and grows tax free for the intended purpose of the account.
The difference is that ABLE accounts, unlike 529 plans, are not intended for college savings. Rather, ABLE accounts would be used to help pay for the disability expenses of those classified as disabled before age 26. Qualified expenses include: education, housing, transportation, employment training and support, assistive technology and personal support services, health, prevention and wellness, financial management and administrative services, legal fees, expenses for oversight and monitoring, funeral and burial expenses.
The balance in an ABLE account cannot exceed $100,000 for practical purposes. Annual contributions are limited to the gift tax limit. As a result, these accounts are a modest aid to the target population of the bill, and are not intended as a significant wealth accumulation vehicle.
Put simply, an ABLE account is to a child with a disability what a 529 plan is to a child who has college in his future. Not only is an ABLE account a good way to increase tax-free savings for families (always a good thing), it's a compassionate way for families with special needs children to save for the needs of the most vulnerable.
More from Americans for Tax Reform
CONGRATULATIONS to all those
advocates that worked tirelessly to ensure some form of financial relief and
personal security is afforded to our Disabled American people. Yes, although not
perfect legislation, the age threshold of 26 is a sticky point in dis-allowing
full coverage or opportunity to those – – over that lean age – who also struggle
with ‘ disabilities’ to have some form of individual financial relief and a
minimum of economic security. However this is a great accomplishment in itself
within the labyrinth world of political bureaucracy on the federal level that
offers to those truly disabled people after years of restrictive and unfair
rule-making authority, the human and personal sense of a resemblance of economic
independence, although within a genuinely structured system. Although we hope
the developing new rule applications - for the A.B.L.E. Act - by the United
States Treasury will be promulgated sooner than later, in the interim, we all
should join together and look into recent proposals such as the SSI SAVERS ACT
and Supplemental Security Income Restoration Act to be re-introduced into
Congress with such sound and pronounce momentum for these types of upgrades to
existing legislation and rule-making. With such legislative action as the SSI
SVERS ACT or SUPPLEMNTAL SECURITY RESTORATION ACT being re-introduced into
Congress on a strong bi-partisan effort, a simple, needed and well overdue
allowance to those Disabled individuals over the age of 26, would actually
possess some independent (private) savings – with no reflection on ‘tax
expenditures’ or losses to the Treasury – and shed the offensive and oppressive
burden of long-term penalties and threats of medical expulsion for simple things
as accepting a meal or small donation under the ‘In-Kind Support &
Maintenance’ Rule, which upon minimum examination, is quite repulsive to even
the average American. Let’s continue the realistic encouragement of the proper
modernization of our disability regulatory process and coalesce with such
outstanding legislators to bring about a formula that replicates the SSI SAVERS
& SSI RESTORATION ACTS in the 114th United States Congress (2015-17).