Assembly Bill No. 339 Qualified ABLE Program Age Limit

This assembly bill was introduced by Assembly Member Irwin on January 30, 2023. The Stephen Beck, Jr., Achieving a Better Life Experience Act of 2014 (ABLE Act) is a federal law designed to encourage individuals and families to save private funds to support eligible individuals with disabilities. It allows for the exclusion from gross income of distributions used for qualified disability expenses by a beneficiary of a qualified ABLE program established and maintained by a state. Under the ABLE Act, an eligible individual for a taxable year is someone entitled to specified benefits based on blindness or disability or for whom there is a disability certification filed with the Secretary of the Treasury, and such blindness or disability occurred before the date on which the individual attained 26 years of age, or, on and after January 1, 2026, 46 years of age. The Qualified ABLE Program, administered by the California ABLE Act Board, implements the federal ABLE Act in this state, using the same definition for "eligible individual." The Personal Income Tax Law and the Corporation Tax Law, for taxable years beginning on or after January 1, 2016, conform to the exclusions from gross income provided under federal income tax law provisions relating to the ABLE Act, as those exclusions read in specified federal law prior to the Consolidated Appropriations Act, 2023.

Starting January 1, 2026, this bill proposes changing the definition of an "eligible individual" under the Qualified ABLE Program to include those whose blindness or disability occurred before they turned 46, aligning with the federal ABLE Act. Additionally, the bill aims to adjust state tax laws for taxable years beginning on or after January 1, 2026, to reflect the changes made to qualified ABLE programs by the Consolidated Appropriations Act, 2023. Existing law mandates that any bill introducing a new tax expenditure must outline specific goals, purposes, and objectives the tax credit aims to achieve, along with detailed performance indicators and data collection requirements. This bill meets these requirements by providing specific findings related to the tax expenditure described above.