S. 4492

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 4492 Introduced in Senate (IS)]

<DOC>

119th CONGRESS
2d Session
S. 4492

To amend the Internal Revenue Code of 1986 to provide matching payments 
for ABLE account contributions by certain individuals, and for other 
purposes.

_______________________________________________________________________

IN THE SENATE OF THE UNITED STATES

May 12, 2026

Mr. Van Hollen (for himself, Mr. Moran, Ms. Klobuchar, and Mr. Tillis) 
introduced the following bill; which was read twice and referred to the 
Committee on Finance

_______________________________________________________________________

A BILL

To amend the Internal Revenue Code of 1986 to provide matching payments 
for ABLE account contributions by certain individuals, and for other 
purposes.

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 MATCH (Making Able a Tool to 
Combat Hardship) Act''.

SEC. 2. MATCHING PAYMENTS FOR ABLE ACCOUNT CONTRIBUTIONS BY CERTAIN 
INDIVIDUALS.

(a) In General.--Subchapter B of chapter 65 of the Internal Revenue 
Code of 1986 is amended by inserting after section 6433 the following 
new section:

``SEC. 6433A. MATCHING PAYMENTS FOR ABLE ACCOUNT CONTRIBUTIONS BY 
CERTAIN INDIVIDUALS.

``(a) In General.--
``(1) Allowance of match.--Any individual who is the 
designated beneficiary of an ABLE account as of the last day of 
the taxable year and who makes qualified ABLE account 
contributions for such taxable year shall be allowed a matching 
contribution for such taxable year in an amount equal to the 
applicable percentage of so much of the qualified ABLE account 
contributions made by such individual for the taxable year as 
does not exceed $2,000.
``(2) Payment of match.--
``(A) In general.--Except as provided in 
subparagraph (B), the matching contribution under this 
section shall be allowed as a credit which shall be 
payable by the Secretary as a contribution (as soon as 
practicable after the individual has filed a tax return 
making a claim for such matching contribution for the 
taxable year) to the ABLE account of the individual.
``(B) Exception.--In the case of an individual who 
elects the application of this subparagraph and with 
respect to whom the matching contribution determined 
under paragraph (1) is greater than zero but less than 
$50 for the taxable year, subparagraph (A) shall not 
apply and such matching contribution shall be treated 
as a credit allowed by subpart C of part IV of 
subchapter A of chapter 1.
``(b) Applicable Percentage.--For purposes of this section--
``(1) In general.--Except as provided in paragraph (2), the 
applicable percentage is 100 percent.
``(2) Phaseout.--The percentage under paragraph (1) shall 
be reduced (but not below zero) by the number of percentage 
points which bears the same ratio to 100 percentage points as--
``(A) the excess of--
``(i) the taxpayer's modified adjusted 
gross income for such taxable year, over
``(ii) the applicable dollar amount, bears 
to
``(B) $20,000.
If any reduction determined under this paragraph is not a whole 
percentage point, such reduction shall be rounded to the next 
lowest whole percentage point.
``(3) Applicable dollar amount.--The applicable dollar 
amount is--
``(A) in the case of a joint return, $56,000,
``(B) in the case of a head of household (as 
defined in section 2(b)), \3/4\ of the amount 
applicable under subparagraph (A), and
``(C) in any other case, \1/2\ of the amount 
applicable under subparagraph (A).
``(c) Qualified ABLE Account Contributions.--For purposes of this 
section--
``(1) In general.--The term `qualified ABLE account 
contributions' means, with respect to any taxable year, the 
amount of contributions made by the individual to the ABLE 
account of which such individual is the designated beneficiary. 
Such term shall not include any amount attributable to a 
payment under subsection (a)(2).
``(2) Reduction for certain distributions.--
``(A) In general.--The qualified ABLE account 
contributions determined under paragraph (1) for a 
taxable year shall be reduced (but not below zero) by 
the aggregate distributions received by the individual 
during the testing period from the ABLE account.
``(B) Testing period.--For purposes of subparagraph 
(A), the testing period, with respect to a taxable 
year, is the period which includes--
``(i) such taxable year,
``(ii) the 2 preceding taxable years, and
``(iii) the period after such taxable year 
and before the due date (including extensions) 
for filing the return of tax for such taxable 
year.
``(C) Excepted distributions.--There shall not be 
taken into account under subparagraph (A) the amount of 
distributions under a qualified ABLE program (within 
the meaning of section 529A) that is equal to amounts 
not included in gross income with respect to such 
distributions under section 529A(c)(1)(B) (relating to 
distributions for qualified disability expenses).
``(D) Treatment of distributions received by spouse 
of individual.--For purposes of determining 
distributions received by an individual under 
subparagraph (A) for any taxable year, any distribution 
received by the spouse of such individual shall be 
treated as received by such individual if such 
individual and spouse file a joint return for such 
taxable year and for the taxable year during which the 
spouse receives the distribution.
``(d) ABLE Account.--For purposes of this section, the term `ABLE 
account' has the meaning given such term under section 529A.
``(e) Other Definitions and Special Rules.--
``(1) Modified adjusted gross income.--For purposes of this 
section, the term `modified adjusted gross income' means 
adjusted gross income determined without regard to sections 
911, 931, and 933.
``(2) Treatment of contributions.--In the case of any 
contribution under subsection (a)(2), such contribution shall 
not be taken into account with respect to the limitation under 
section 529A(b)(2)(B).
``(3) Erroneous credits.--
``(A) In general.--If any contribution is 
erroneously paid under subsection (a)(2), including a 
payment that is not made to an ABLE account, the amount 
of such erroneous payment shall be treated as an 
underpayment of tax (other than for purposes of part II 
of subchapter A of chapter 68) for the taxable year in 
which the Secretary determines the payment is 
erroneous.
``(B) Distribution of erroneous credits.--In the 
case of a contribution to which subparagraph (A) 
applies, section 72 shall not apply to the distribution 
of such contribution (and any income attributable 
thereto) if such distribution is received not later 
than the day prescribed by law (including extensions of 
time) for filing the individual's return for such 
taxable year.
``(4) Exception from reduction or offset.--Any payment made 
to any individual under this section shall not be--
``(A) subject to reduction or offset pursuant to 
subsection (c), (d), (e), or (f) of section 6402 or any 
similar authority permitting offset, or
``(B) reduced or offset by other assessed Federal 
taxes that would otherwise be subject to levy or 
collection.
``(5) Election not to have section apply.--A taxpayer may 
elect not to have this section apply for any taxable year.
``(f) Inflation Adjustments.--
``(1) In general.--In the case of any taxable year 
beginning in a calendar year after 2027, the $56,000 amount in 
subsection (b)(3)(A) shall be increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined 
under section 1(f)(3) for the calendar year in which 
the taxable year begins, determined by substituting 
`calendar year 2026' for `calendar year 2016' in 
subparagraph (A)(ii) thereof.
``(2) Rounding.--Any increase determined under paragraph 
(1) shall be rounded to the nearest multiple of $1,000.''.
(b) Treatment of Certain Possessions.--
(1) Payments to possessions with mirror code tax systems.--
The Secretary of the Treasury shall pay to each possession of 
the United States which has a mirror code tax system amounts 
equal to the loss (if any) to that possession by reason of the 
amendments made by this section. Such amounts shall be 
determined by the Secretary of the Treasury based on 
information provided by the government of the respective 
possession.
(2) Payments to other possessions.--The Secretary of the 
Treasury shall pay to each possession of the United States 
which does not have a mirror code tax system amounts estimated 
by the Secretary of the Treasury as being equal to the 
aggregate benefits (if any) that would have been provided to 
residents of such possession by reason of the amendments made 
by this section if a mirror code tax system had been in effect 
in such possession. The preceding sentence shall not apply 
unless the respective possession has a plan, which has been 
approved by the Secretary of the Treasury, under which such 
possession will promptly distribute such payments to its 
residents.
(3) Coordination with credit allowed against united states 
income taxes.--No credit shall be allowed against United States 
income taxes under section 6433A of the Internal Revenue Code 
of 1986 (as added by this section) to any person--
(A) to whom a credit is allowed against taxes 
imposed by the possession by reason of the amendments 
made by this section, or
(B) who is eligible for a payment under a plan 
described in paragraph (2).
(4) Mirror code tax system.--For purposes of this 
subsection, the term ``mirror code tax system'' means, with 
respect to any possession of the United States, the income tax 
system of such possession if the income tax liability of the 
residents of such possession under such system is determined by 
reference to the income tax laws of the United States as if 
such possession were the United States.
(5) Treatment of payments.--For purposes of section 1324 of 
title 31, United States Code, the payments under this 
subsection shall be treated in the same manner as a refund due 
from a credit provision referred to in subsection (b)(2) of 
such section.
(c) Coordination With Savers' Credit.--Section 25B(c)(1) of the 
Internal Revenue Code of 1986 is amended by inserting ``and such 
individual has made an election under section 6433A(e)(5) not to have 
section 6433A apply for such taxable year'' before the period at the 
end.
(d) Deficiencies.--Section 6211(b)(4) of the Internal Revenue Code 
of 1986 is amended by striking ``and 6433'' and inserting ``6433, and 
6433A''.
(e) Payment Authority.--Section 1324(b)(2) of title 31, United 
States Code, is amended by striking ``or 6433'' and inserting ``6433, 
or 6433A''.
(f) Clerical Amendment.--The table of sections for subchapter B of 
chapter 65 of the Internal Revenue Code of 1986 is amended by inserting 
after the item relating to section 6433 the following new item:

``Sec. 6433A. Matching payments for ABLE account contributions by 
certain individuals.''.
(g) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2026.

SEC. 3. DEMOGRAPHIC REPORTING WITH RESPECT TO ABLE ACCOUNTS.

(a) In General.--Section 529A(d)(1) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new sentence: ``In 
addition to the information required under the preceding sentence, each 
officer or employee having control of the qualified ABLE program of 
their designee shall include in reports provided to the Secretary 
demographic information (including race, gender, and disability type) 
relating to the designated beneficiaries of ABLE accounts under the 
program.''.
(b) Effective Date.--The amendment made by this section shall apply 
to reports made after the date of the enactment of this section.

SEC. 4. GRANTS TO PROMOTE USE OF ABLE ACCOUNTS AND THE MATCHING 
CONTRIBUTION CREDIT.

(a) In General.--The Secretary of the Treasury (or the Secretary's 
delegate) may award grants to States to enable States to promote ABLE 
accounts (as defined in section 529A(e) of the Internal Revenue Code of 
1986) and matching payments for contributions to such accounts (as 
provided under section 6433A of such Code, as added by this Act).
(b) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $5,000,000 for each of fiscal 
years 2027 through 2030.
<all>