The ABLE Employment Flexibility Act allows employers to contribute directly to ABLE accounts (tax-advantaged savings accounts for people with disabilities) as an alternative to traditional retirement plan contributions. Under this bill, eligible employees with disabilities can elect to have their employer contribute to their ABLE account instead of a 401(k) or similar retirement plan, provided this option is available to all eligible workers at their company. The legislation treats these employer contributions as wages for tax purposes and ensures they don't trigger penalties under existing retirement plan rules. Additionally, contributions to ABLE accounts won't count as income when determining eligibility for means-tested federal benefits like Medicaid or SSI. The Treasury Department must issue guidance and model plan amendments within one year, and the changes take effect for plan years beginning after the bill's enactment, providing workers with disabilities greater flexibility in how employers can help them save for their future.
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