Category Archives: Tax Policy

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

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.

Tax Policy: ABLE Age Adjustment Act Reintroduced

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On March 5, Senators Bob Casey (D-PA), Jerry Moran (R-KS), Chris Van Hollen (D-MD), and Pat Roberts (R-KS) reintroduced the ABLE Age Adjustment Act (S.651). 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. The Arc supports the ABLE Age Adjustment Act.

Tax: California Opens Qualified ABLE Program

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In December, California opened a new Achieving a Better Life Experience (ABLE) program, bringing the total number of jurisdictions with ABLE programs to 42. The program is open to all eligible individuals nationwide. It has three investment options and a savings option. The program has an annual maintenance fee of $37 and an additional $10 annual fee for those selecting paper statements. Asset-based fees for investments options range from 0.52% to 0.54%. More information about state implementation of the ABLE Act can be found here.

Tax Policy – Arkansas Opens Qualified ABLE Program

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Arkansas recently opened a new Achieving a Better Life Experience (ABLE) program, bringing the total number of jurisdictions with ABLE programs to 41. The program is open to all eligible individuals nationwide. It has three investment options and a cash option. The program has a quarterly maintenance fee of $15 with a $3.75 discount for opting to receive statements via email, and monthly asset-based fees ranging from 0.34% to 0.38% depending on the investment option chosen. There is an additional $1.25 discount for Arkansas residents. More information about state implementation of the ABLE Act can be found here.

Tax Policy – House Tax Bill Introduced

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On November 26, Chairman Kevin Brady (R-TX), House Ways and Means Committee, introduced a tax bill. The measure has five main elements: technical corrections to the Tax Cuts and Jobs Act of 2017 (TCJA); extension of 26 tax breaks (such as credits for biodiesel fuel and regional railroads); an overhaul of the Internal Revenue Service; tax breaks for disaster area residents; and retirement savings provisions. It is estimated to cost $53 billion over 10 years. Since the measure requires 60 votes in the Senate to pass, it is not expected to advance. Some Members of Congress have stated their opposition to making technical corrections to the TCJA unless other provisions that benefit the very wealthy and encourage corporate offshoring are changed.

Tax – House Approves Tax Cut Package

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On September 28, the House of Representatives approved a package of three tax bills (H.R. 6760, H.R. 6757, H.R. 6756), collectively referred to as “Tax Reform 2.0” by a vote of 220-191. The centerpiece of the package, H.R. 6760, makes permanent the individual tax cuts from last year’s Tax Cuts and Jobs Act that are presently set to expire in 2025. The Tax Policy Center estimates that tax revenues would fall by $3.2 trillion over a 10-year period under H.R. 6760, on top of the $1.9 trillion that last year’s tax law is already expected to cost. The Senate is not expected to take up the measure prior to the mid-term elections. The Arc opposes Tax Reform 2.0 as it sharply reduces federal revenue, extends tax cuts that primarily benefit wealthy individuals, and will create greater pressure to cut critical programs for people with disabilities. Read more from CCD here.

Tax – House Committee Approves Second Round of Tax Cuts

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On September 13, the House Ways and Means Committee approved a package of three tax bills (H.R. 6760, H.R. 6757, H.R. 6756), collectively referred to as “Tax Reform 2.0”. H.R. 6760 makes permanent the individual tax cuts from last year’s Tax Cuts and Jobs Act that are presently set to expire in 2025; H.R. 6757 makes various changes to retirement savings rules, including allowing penalty-free withdrawals for expenses related to birth or adoption; and H.R. 6756 makes various tax changes for startup companies. The full House is expected to vote on the package by the end of the month. House Speaker Paul Ryan (R-WI) has said he wants the measure voted on before leaving for the recess and the final campaign push before November. The Arc opposes Tax Reform 2.0 as it sharply reduces federal revenue, extends tax cuts that primarily benefit wealthy individuals, and will create greater pressure to cut critical programs for people with disabilities. Read more from the Center on Budget and Policy Priorities here and see the statement from CCD’s Fiscal Policy Task Force here.

Tax Policy – House Outline for Additional Tax Cuts Released

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House Ways and Means Committee Chairman Kevin Brady (R-TX) has released a Listening Session Framework for what is being referred to as “Tax Reform 2.0”. The outline includes making permanent the individual and small business tax cuts in the Tax Cuts and Jobs Act of 2017. Permanent extension of the individual and small business tax cuts, that are presently set to expire in 2025, would reduce revenues by $1 trillion over ten years – increasing pressure to cut vital federal programs for people with disabilities. Chairman Brady has stated that he intends to bring a legislative package to the floor in September. If both chambers pass a concurrent budget resolution for fiscal year 2019, it would be possible for the Senate to approve additional tax cut legislation by a simple majority.

Tax Policy – Washington Opens Qualified ABLE Programs

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On July 23, the State of Washington opened a new Achieving a Better Life Experience (ABLE) program, bringing the total number of jurisdictions with ABLE programs to 40. The program is currently only open to Washington residents. It has three investments options and a cash option. Accounts have a $35 annual fee with an additional $10 fee for those who receive paper statements, and asset-based fees ranging from 0.30% to 0.38% for investment options. More information about state implementation of the ABLE Act can be found here.