Category Archives: Tax Policy

Read about tax policy issues as they relate to The Arc’s public policy.

Congressional Negotiations Stall on Next COVID Package; Trump Issues Proposals

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With stimulus talks stalled, President Trump issued executive actions over the weekend to provide relief to Americans affected by the pandemic. The President proposed the following relief measures:

  • Unemployment insurance (UI) benefits. Up to $400 additional weekly federal UI benefit. States would be required to pay for 25% of the benefit.
  • Eviction moratorium. The order includes no new resources to assist renters and only directs federal agencies to “review all existing authorities and resources” and consider measures that are “reasonably necessary to prevent the further spread of COVID-19.” It does not extend the limited federal eviction moratorium that expired on July 24.
  • Payroll tax. The measure proposes to defer the portion of payroll taxes paid by employees for some low-wage workers from September 1 to the end of the year. There is no provision made to reimbursing the Social Security and Medicare trust funds for these losses and the taxes would need to be paid back after 2020. This measure would not help the unemployed and will hurt the finances of Social Security and Medicare, which are already under fiscal strain.
  • Student loans. The President’s memorandum directs the Education Department to extend by three months the student loan relief granted in previous COVID relief legislation until the end of the year. Student loan payments are presently paused and interest is suspended on federally-held student loans until the end of September.

Numerous questions have been raised about the President’s authority to undertake such actions without Congressional approval.

COVID Relief: Senate Releases Framework for Next Package; Advocacy Needed

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Last week, the Senate released a framework for its fourth COVID-19 response bill. The package of bills, called the Healthcare, Economic Assistance, Liability, and Schools (HEALS) Act, fails to include all but one of the disability community’s priorities. The HEALS Act provides a lower extended federal unemployment benefit; funding for schools, child care, and COVID testing; another round of funding for the paycheck protection program; expanded tax credits; and waivers of liability for hospitals, schools, state governments, and businesses. While it would provide a $500 tax rebate for all adult dependents, unfortunately, it does not include The Arc’s other critical priorities: additional home and community based services (HCBS) funding, increased access to personal protective equipment for direct support professionals, or any expansion of paid leave. This framework is a starting point that will be subject to negotiation in the coming weeks.

See a blog post from Nicole Jorwic, The Arc’s Senior Director for Public Policy. We urge you to contact your Senators here.

Senate Finance Committee Holds Hearing on 2020 Filing Season and IRS COVID-19 Recovery

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On June 30, the Senate Finance Committee held a hearing titled “2020 Filing Season and IRS COVID-19 Recovery.” The sole witness was Charles P. Rettig, Commissioner, Internal Revenue Service (IRS). Commissioner Rettig stated at the hearing that the IRS would send corrective payments to all non-filers who used the IRS non-filer portal before May 17 but did not receive their economic impact payments. However, non-filers who didn’t use the form will not receive payments. Visit the Committee website for more information or to view archived video of the hearing.

House Committee Holds Hearing on Tax Relief to Support Workers and Families During the COVID-19 Recession

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On June 18, the House Committee on Ways and Means, Subcommittee on Select Revenue Measures held a hearing titled “Tax Relief to Support Workers and Families During the COVID-19 Recession.” Witnesses were Amy Matsui, Senior Counsel, The National Women’s Law Center; Indivar Dutta-Gupta, Co-Executive Director, the Center on Poverty and Inequality at the Georgetown University Law Center; Allison Bovell-Ammon, Director of Policy Strategy for Children’s HealthWatch at Boston Medical Center; Martha Rodriguez, Preschool educator from Renton, WA; and Kyle Pomerleau, resident fellow, American Enterprise Institute. Visit the Committee website for more information or to access video of the hearing.

Tax: Advocates Host Call-In Day for ABLE Age Adjustment Act

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On Thursday, November 14, The Arc and partner organizations will host a call-in day in support of the ABLE Age Adjustment Act. For the past five years, Achieving a Better Life Experience (ABLE) accounts have allowed millions of people with disabilities to save money without jeopardizing access to needed benefits. However, millions of people aren’t eligible because they did not acquire their disability before age 26. The ABLE Age Adjustment Act would raise the maximum age from before 26 to before 46, making six million additional people eligible. As a result, ABLE programs will become more solvent. To RSVP or find more information, visit the event Facebook page. You can also tweet at your members using this link.

Tax/Rights: Representatives Re-Introduce Bill to Improve ADA Compliance for 29th Anniversary

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Last week, in conjunction with the 29th anniversary of the signing of the Americans with Disabilities Act (ADA), Representatives Donald McEachin (D-VA) and Jim Langevin (D-RI) and Senators Tammy Duckworth (D-IL) and Bob Casey (D-PA) re-introduced the Disabled Access Credit Expansion Act (H.R.4045/S.2290). This bill will double the Disabled Access Credit (DAC) and increase the number of businesses eligible for it. The DAC is a tax credit for small businesses that make renovations to make their facilities accessible. Additionally, the bill increases funding for the voluntary ADA Mediation Program in the Department of Justice and requires data collection and reporting on the types of calls received by the ADA Information Line.

Tax: Mississippi Opens Qualified ABLE Program

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In June, Mississippi opened a new Achieving a Better Life Experience (ABLE) program, bringing the total number of jurisdictions with ABLE programs to 43. The program is open to all eligible individuals nationwide. It has six investment options and a checking option with a debit card. The program has a quarterly maintenance fee of $15 with a $3.75 discount for opting to receive statements via email and a $1.25 discount for Mississippi residents. Asset-based fees for investment options range from 0.34% to 0.38%. More information about state implementation of the ABLE Act can be found here.

Tax: Representatives Introduce New Tax Legislation

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On June 18, Representatives Richard Neal (D-MA) and Michael San Nicolas (D-GU) introduced the Economic Mobility Act of 2019 (H.R.3300). This bill makes various improvements to the earned income tax credit, child tax credit, and dependent care assistance, most of which last for two years. Additionally, it repeals a provision of the Tax Cuts and Jobs Act of 2017 that imposes a tax on non-profit organizations that provide transportation benefits to their employees.

Tax/Housing: HUD Issues Guidance on Treatment of ABLE Accounts

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The U.S. Department of Housing and Urban Development (HUD) recently issued long-awaited guidance clarifying that funds in ABLE accounts should not be included in determining a person’s eligibility for means-tested housing assistance. ABLE accounts are available to people with significant disabilities that developed before the age of 26, including those who meet the eligibility requirements under Supplemental Security Income (SSI) or Social Security disability programs, including Social Security Disability Insurance (SSDI). Money in an ABLE account can be used to cover “qualified disability expenses,” such as housing, education, and transportation. In general, to be eligible for some public benefits that many people with disabilities and their families rely on, including Medicaid and housing assistance, an individual is limited to no more than $2,000 in cash savings, retirement funds, and other items of significant value. ABLE accounts are an option for people with disabilities to build savings without taking away their eligibility for these important benefits.

The ABLE Act states that amounts in an ABLE account or contributions to an ABLE account and pay-outs for qualified disability expenses should not be counted for federal means-tested programs. Consistent with Internal Revenue Service and Social Security Administration policy, the HUD notice clarifies that, for the purpose of determining eligibility and continued occupancy for a list of key HUD programs, HUD will disregard amounts in the individual’s ABLE account. Some people with disabilities and their families have heard confusing or inaccurate information about whether or not participation in ABLE could threaten their receipt of other critical federal benefits. The notice is good news for people in HUD-funded programs and should be helpful in addressing questions about the treatment of ABLE account funds.

Tax Policy: ABLE Age Adjustment Act Reintroduced in House

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On March 18, Representatives Tony Cardenas (D-CA), Cathy McMorris Rodgers (R-WA), Steve Cohen (D-TN), Brian Fitzpatrick (R-PA), Michael Turner (R-OH), Max Rose (D-NY), and Debbie Wasserman Schultz (D-FL) reintroduced the ABLE Age Adjustment Act (H.R.1814). This bill amends the Stephen J. Beck, Jr. Achieving a Better Life Experience (ABLE) Act to increase the maximum age of onset limit from before 26 to before 46. Its companion bill, S.651, was introduced in the Senate on March 5. The Arc supports the ABLE Age Adjustment Act.