S4541-118

What This Bill Does

The Ensuring Nationwide Access to a Better Life Experience Act (ENABLE Act) makes permanent two tax benefits for ABLE accounts - special savings accounts for people with disabilities. Currently, these benefits are set to expire on January 1, 2026; this bill removes those expiration dates so they continue indefinitely.

Who Benefits and How

Individuals with disabilities and their families benefit directly from this legislation. They can continue to make larger annual contributions to ABLE accounts beyond the standard gift tax exclusion amount, and they can roll over funds from 529 college savings plans into ABLE accounts tax-free. These accounts help people with disabilities save for disability-related expenses without jeopardizing their eligibility for federal benefits like Medicaid or SSI. ABLE account holders also remain eligible for the Saver's Credit, a tax credit for low-to-moderate income individuals who contribute to retirement or disability savings accounts.

Who Bears the Burden and How

The federal government bears a modest cost through foregone tax revenue. By extending these tax-advantaged savings provisions permanently, the Treasury collects less in taxes on investment earnings and contributions than it otherwise would. However, no private entities, businesses, or individuals face new requirements, restrictions, or costs under this legislation.

Key Provisions

• Removes the January 1, 2026 expiration date for increased ABLE account contribution limits, allowing contributions above the standard annual gift tax limit to continue permanently
• Makes permanent the eligibility of ABLE account contributors for the Saver's Credit tax benefit
• Extends indefinitely the ability to roll over funds from 529 education savings plans into ABLE accounts without tax penalties
• Changes take effect for taxable years beginning after the date of enactment (for contributions) and 10 days after enactment (for rollovers)