Sponsors (9)
The bill substantially expands and promotes ABLE accounts—making it easier for people with disabilities to build and protect savings—at the cost of added federal/state administrative burdens, some fiscal cost to taxpayers, and potential state Medicaid funding and benefit-interaction complications.
People with disabilities (including low-income individuals) gain materially expanded access to ABLE accounts and higher tax-advantaged contribution opportunities (raised onset age, larger allowances, Saver’s credit eligibility, 529 rollovers), making it easier to build savings for disability-related expenses.
People with disabilities who are Medicaid or SSI beneficiaries can better preserve ABLE balances (reduced risk of clawback and clearer rules), protecting savings for future care and reducing estate-planning uncertainty.
Beneficiaries get more flexible ways to fund ABLE accounts — employer-directed contributions, one-time rollovers from 529 plans, and third-party trust or life-insurance transfers — enabling larger or more convenient lump funding when needed.
All taxpayers face new fiscal cost from expanded tax-advantaged treatment and the bill’s outreach appropriations (about $250M over five years) and related revenue loss from credits/rollovers.
Federal, state, and local agencies (and employers) will incur significant additional administrative and compliance costs — IRS rulemaking/verification, SSA processing, state outreach and reporting, employer payroll and plan changes — that could be substantial to implement.
States may face higher Medicaid expenditures because state Medicaid programs will be barred from recovering payments from ABLE accounts, and loss of recovery could weaken incentives to control improper payments.
Based on analysis of 9 sections of legislative text.
Expands ABLE account protections and contribution options, allows employer contributions into ABLE accounts, mandates federal outreach, and funds state/tribal ABLE outreach grants.
Official title: Amend the Internal Revenue Code of 1986 to make expiring ABLE provisions permanent, improve accessibility and education for families, and for other purposes.
Introduced May 12, 2026 by Jerry Moran · Last progress May 12, 2026
Creates multiple changes to encourage people with disabilities to open and use ABLE (tax-advantaged savings) accounts, protects ABLE balances from Medicaid recovery, relaxes some rollover and contribution limits, allows employer contributions from retirement plans into ABLE accounts, mandates federal outreach and notices about ABLE programs, and funds state and tribal grants to increase ABLE participation. It also requires Social Security and other federal agencies to provide information to beneficiaries about ABLE accounts and authorizes $50 million per year (FY2027–2031) for outreach grants. The bill modifies tax code rules for rollovers and lump-sum transfers into ABLE accounts, changes timing for suspension of Social Security benefits related to ABLE account resources, and directs Treasury to adopt employer-plan rules so workers can elect to route employer contributions into ABLE accounts while preserving certain retirement plan treatment and nondiscrimination testing rules.