119-hr4644

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4644 Introduced in House

    (IH) ]

<DOC>

119th CONGRESS
 1st Session
 H. R. 4644

 To amend the Internal Revenue Code of 1986 to allow employers to 
 contribute to ABLE accounts in lieu of retirement plan contributions.

_______________________________________________________________________

 IN THE HOUSE OF REPRESENTATIVES

 July 23, 2025

 Ms. Davids of Kansas (for herself and Mr. Fitzpatrick) introduced the 
 following bill; which was referred to the Committee on Ways and Means

_______________________________________________________________________

 A BILL

 To amend the Internal Revenue Code of 1986 to allow employers to 
 contribute to ABLE accounts in lieu of retirement plan contributions.

 Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

 This Act may be cited as the ``ABLE Employment Flexibility Act''.

SEC. 2. PROTECTING WORKING ABLE INDIVIDUALS FROM LOSING BENEFITS 
 BECAUSE OF RETIREMENT PLAN RULES.

    (a) In General.--

Section 414 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new subsection:
 ``
            (dd) ABLE Account Contributions.--
 ``

    (1) In general.--An applicable employer plan (as defined 
 in subsection
            (v) (6)
        (A) ) which is a defined contribution plan 
 shall not be treated as failing to meet any requirement of this 
 title solely because the plan provides that an eligible ABLE 
 individual may elect for a plan year that employer 
 contributions which would otherwise be made under the terms of 
 the plan for such plan year shall (in lieu of contribution to 
 the plan) be contributed by the employer to a qualified ABLE 
 program described in 

section 529A on behalf of such eligible 
 ABLE individual.
 ``

    (2) Treatment of contributions.--
 ``
        (A) No deduction for amounts contributed to able 
 account.--Except as provided in subparagraph
        (B) , a 
 contribution to a qualified ABLE program pursuant to an 
 election under paragraph

    (1) shall not be treated as a 
 contribution to an applicable employer plan.
 ``
        (B) Application of nondiscrimination rules.--
 Under rules prescribed by the Secretary, for purposes 
 of applying sections 401

    (a)

    (4) , 401

    (k)

    (3) , 401

    (k)

    (12) , 
 401

    (k)

    (13) , 401
            (m) (2) , 403

    (b)

    (12) , 408

    (k)

    (3) , 
 408

    (p)

    (2)
            (iii) , 408

    (p)

    (2)
        (B) , 410, and 416, 
 contributions made to a qualified ABLE program pursuant 
 to an election under paragraph

    (1) shall be treated as 
 if such contributions were made to the plan.
 ``

    (3) Universal availability.--Paragraph

    (1) shall not 
 apply unless the plan provides that the election described 
 therein is available to all eligible ABLE individuals who are 
 eligible to participate in the plan.
 ``

    (4) Cash or deferred arrangement.--A plan shall not fail 
 to be treated as including a qualified cash or deferred 
 arrangement described in 

section 401

    (k)

    (1) solely because such 
 plan provides for the election described in paragraph

    (1) .
 ``

    (5) Eligible able individual.--For purposes of this 
 subsection, the term `eligible ABLE individual' means an 
 employee who, as of the first day of a plan year, is an 
 eligible individual within the meaning of 

section 529A

    (e)

    (1) for the taxable year containing such first day of the plan 
 year.
 ``

    (6) Treatment of permissive withdrawals.--An eligible 
 ABLE individual may direct amounts eligible for withdrawal from 
 an eligible contribution arrangement pursuant to 

section 414

    (w) to be contributed to a qualified ABLE program described in 
 

section 529A on behalf of such eligible ABLE individual.''.

    (b) Treatment as Beneficiary Contribution.--

Section 529A

    (b)

    (7) of 
the Internal Revenue Code of 1986 is amended by redesignating 
subparagraph
        (B) as subparagraph
            (C) and by inserting after 
subparagraph
        (A) the following new subparagraph:
 ``
        (B) Employer contributions.--Contributions made 
 to a qualified ABLE program by an employer on behalf of 
 a designated beneficiary described in this paragraph 
 pursuant to paragraph

    (1) or

    (6) of 

section 414
            (dd) shall be treated as made by the designated 
 beneficiary.''.
            (c) Clarification of Availability of Employer Contributions.--

Section 529A

    (e) of the Internal Revenue Code of 1986 is amended by 
adding at the end the following new paragraph:
 ``

    (7) Employer contributions.--An employer of an eligible 
 individual may contribute to any qualified ABLE program for 
 which the eligible individual is the designated beneficiary, 
 including through a contribution matching a contribution made 
 by such eligible individual to the qualified ABLE program.''.
            (d) Deduction for Contributions Remitted by Employer to a Qualified 
ABLE Program.--Not later than 1 year after the date of the enactment of 
this Act, the Secretary of the Treasury shall--

    (1) amend the regulations under 

section 162 of the Internal 
 Revenue Code of 1986 to confirm that contributions made by an 
 employer to a qualified ABLE program described in 

section 529A 
 of such Code on behalf of an eligible ABLE individual described 
 in 

section 414
            (dd) (5) of such Code who is an employee of such 
 employer shall be considered a reasonable allowance for 
 salaries or other compensation for personal service if such 
 contribution for a year, taking into account all other 
 contributions to such qualified ABLE program, does not exceed 
 the maximum contribution described in 

section 529A

    (b)

    (2)
        (B) of 
 such Code with respect to such individual; and

    (2) update the publications issued for employers to 
 encourage employers offering a retirement plan with automatic 
 enrollment to notify employees who elect not to contribute to 
 the plan and who may be eligible to contribute to a qualified 
 ABLE program to notify such employees of the possibility of a 
 contribution under 

section 529A

    (b)

    (2)
        (B)
            (ii) of such Code.

    (e) Effective Date.--

    (1) In general.--Except as provided in paragraph

    (2) , the 
 amendments made by this section shall apply to plan and taxable 
 years beginning after the date of the enactment of this Act.

    (2) Clarifications.--The amendment made by subsection
            (c) and the amendments made pursuant to subsection
            (d) (1) shall 
 apply to plan and taxable years beginning before, on, or after 
 the date of the enactment of this Act.

    (f) Model Amendment Authority.--The Secretary of the Treasury (or 
such Secretary's delegate) shall promulgate model amendments which 
plans may adopt to implement contributions to qualified ABLE programs 
pursuant to the amendments made by this section.

    (g) Contributions Disregarded for Purposes of Certain Means-Tested 
Federal Programs.--

    (1) In general.--Notwithstanding any other provision of 
 Federal law that requires consideration of one or more 
 financial circumstances (including income) of an individual, 
 for the purpose of determining eligibility to receive, or the 
 amount of, any assistance or benefit authorized by such 
 provision to be provided to or for the benefit of such 
 individual, a contribution to a qualified ABLE program pursuant 
 to paragraph

    (1) or

    (6) of 

section 414
            (dd) of the Internal 
 Revenue Code of 1986 shall be disregarded (including 
 disregarded as income) for such purpose with respect to any 
 period during which such individual maintains, makes 
 contributions to, or receives distributions from such ABLE 
 program.

    (2) Cross reference.--For additional rules relating to the 
 treatment of qualified ABLE programs for purposes of certain 
 means-tested Federal programs, see 

section 103 of the Stephen 
 Beck, Jr., ABLE Act of 2014 (division B of Public Law 113-295).
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