ABLE Employment Flexibility Act
Sponsored By: Representative Rep. Davids, Sharice [D-KS-3]
Introduced
Summary
Lets employers redirect retirement-plan contributions into ABLE accounts for employees with disabilities. The bill would allow defined-contribution plans to recharacterize employer contributions that otherwise go to a retirement plan as contributions to a qualified ABLE account under section 529A without causing the plan to fail plan qualification rules.
Show full summary
- Employees with disabilities and their families could get employer contributions or employer matches sent directly to their ABLE account, increasing tax-advantaged savings for disability-related costs.
- Plan sponsors can offer this election to all eligible ABLE individuals and still treat those amounts as if contributed to the plan for applying tax-code tests like nondiscrimination and contribution limits.
- Employers may deduct ABLE contributions as reasonable compensation up to the ABLE contribution cap described in section 529A(b)(2)(B) under rules the Treasury Secretary must issue.
- Contributions made under section 414(dd) to ABLE accounts are disregarded for specified means-tested federal programs and are not counted as income while the account is maintained, contributed to, or distributions are received.
Your PRIA Score
Personalized for You
How does this bill affect your finances?
Sign up for a PRIA Policy Scan to see your personalized alignment score for this bill and every other piece of legislation we track. We analyze your financial profile against policy provisions to show you exactly what matters to your wallet.
Bill Overview
Analyzed Economic Effects
3 provisions identified: 2 benefits, 0 costs, 1 mixed.
Tax break for employer ABLE contributions
If enacted, employers could deduct what they put into an employee’s ABLE account as a compensation expense, up to the annual 529A limit. Treasury would have to issue the rule within one year, and the clarification would apply to plan and tax years before, on, or after enactment. The bill also treats employer ABLE contributions as if the beneficiary made them and allows employers to contribute to any state ABLE plan, including matching an employee’s own contribution. Note: these amounts would not be deductible as retirement plan contributions.
ABLE money ignored for SNAP and Medicaid
If enacted, certain employer ABLE contributions would not count as income or assets when agencies check eligibility for SNAP, Medicaid, and other means‑tested aid. This would apply while you have, add to, or take money from the ABLE account. The rule would apply to plan and tax years after enactment.
ABLE workers can redirect employer plan money
If enacted, employer retirement plans could let eligible ABLE workers choose to send employer contributions to their ABLE account for a year. The choice would have to be offered to all eligible ABLE participants, and the plan would keep its tax-favored status. For testing rules, those ABLE payments would be treated as if contributed to the plan. Picking ABLE instead could mean less money in your retirement account. This would apply to plan and tax years starting after enactment, and Treasury would issue rules and model language.
Free Policy Watch
You just read the policy. Now see what it costs you.
Pick a topic. PRIA runs your household against live legislation and sends you a free personalized readout.
Pick a topic to get started
Sponsors & CoSponsors
Sponsor
Rep. Davids, Sharice [D-KS-3]
KS • D
Cosponsors
Rep. Fitzpatrick, Brian K. [R-PA-1]
PA • R
Sponsored 7/23/2025
Rep. Thompson, Glenn [R-PA-15]
PA • R
Sponsored 3/3/2026
Roll Call Votes
No roll call votes available for this bill.
View on Congress.govTake It Personal
Get Your Personalized Policy View
Take the PRIA Score to see how policy affects your household, then upgrade to PRIA Full Coverage for year-round monitoring.
Already have an account? Sign in