H.R. 4644

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

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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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