HR-1436-119
Referred to the House Committee on Ways and Means.
Sponsored by Lloyd Smucker (R-PA)
What it does
This bill would permanently extend two provisions of the tax code that are currently set to expire in 2026: (1) the ability of working individuals with disabilities to contribute more than the standard annual limit to their ABLE savings account, and (2) the ability to roll over unused funds from a 529 college savings account into an ABLE account. It would also make ABLE account contributions permanently eligible for the Saver's Credit, a tax credit for lower-income individuals who save for retirement or disability.
Who benefits
Individuals with disabilities who were disabled before age 26 and who are employed — they could contribute additional amounts (up to the federal poverty level) beyond the standard annual ABLE limit without a sunset date. Families who saved in 529 college savings accounts for a beneficiary who became disabled — they could roll unused 529 funds into an ABLE account without penalty, permanently. Lower-income individuals with disabilities who contribute to ABLE accounts and qualify for the Saver's Credit. Financial institutions and ABLE program administrators who benefit from increased account activity and assets under management.
Who is hurt
Federal taxpayers broadly, as the bill would reduce federal tax revenue by making these tax-advantaged provisions permanent rather than allowing them to expire. Individuals with disabilities who do not qualify for ABLE accounts (e.g., those whose disability onset was after age 26) would not benefit and may face indirect opportunity costs if program resources are concentrated on ABLE-eligible individuals. State Medicaid programs, which may see reduced asset recovery from ABLE account holders, since ABLE assets are sheltered from certain means tests.
Supporters argue
Supporters argue that ABLE accounts are a critical financial tool for the roughly 8 million Americans eligible for them, allowing people with disabilities to save without losing access to means-tested benefits like Medicaid and SSI. They contend that the looming 2026 expiration creates planning uncertainty for disabled workers and families with 529 accounts, and that making these provisions permanent provides the long-term stability needed for meaningful financial security. The bill's broad bipartisan sponsorship reflects consensus that disability savings incentives should not be subject to recurring legislative cliffs.
Opponents argue
Opponents argue that permanently extending these provisions foregoes a regular congressional review process that could be used to evaluate whether ABLE accounts are effectively reaching the lowest-income individuals with disabilities or primarily benefiting higher-income families with existing 529 savings. They contend that the revenue cost of permanent extension — rather than periodic reauthorization — reduces fiscal flexibility, and that the 529 rollover provision in particular benefits families who had resources to fund college savings accounts, raising questions about whether the tax benefit is well-targeted to those most in need.