NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7473
TITLE OF BILL: An act to amend the mental hygiene law, in relation to
increasing the maximum account balance for the New York ABLE program
The purpose of this legislation is to increase the maximum account
balance for the New York Achieving A Better Life Experience (NY ABLE)
Program to match the federally authorized level.
SUMMARY OF PROVISIONS::
Section 1 of this proposal amends section 84.09 of the mental hygiene
Section 2 of this proposal provides for an immediate effective date.
The federal ABLE Act (Internal Revenue Code § 529A) authorizes a state
to set its maximum account balance in an amount not to exceed the maxi-
mum account balance set for its 529 College Savings Program which is
currently set at $520,000. In most states, the ABLE maximum account
balance is similar or equal to that of the federally authorized maximum
set for that state's 529 College Savings Program.
In 2015, when the New York Achieving A Better Life Experience Program
(NY ABLE or Program) was originally enacted, the maximum account balance
was set at one hundred thousand dollars ($100,000), and contributions to
the Program were eligible for a New York State tax deduction. However,
the NY ABLE Act was signed contingent on the enactment of a chapter
amendment eliminating this state tax benefit, and, in 2016, the New York
State tax deduction was eliminated without a corresponding amendment to
increase the Program's maximum account balance. Consequently, New York's
current maximum account balance is the second lowest of any ABLE program
in the country, even though the administration of NY ABLE does not
result in a direct loss of tax revenue to the State.
The maximum ABLE account balances of neighboring states which track the
529 maximum in each are as follows: Massachusetts: $400,000; New Jersey:
$305,000; and Pennsylvania: $511,758. New York's ABLE Program has a
$100,000 maximum, far below New York's current 529 College Savings
Program maximum of $520,000.
As a result of legislative changes in the federal Tax Cuts and Jobs Act,
beginning in 2018, the current maximum annual contribution amount
increased to over twenty-seven thousand dollars ($27,000) per year for
ABLE program participants who are employed. Since 2019 marks the third
calendar year in which NY ABLE has been available to participants, the
maximum account balance of $100,000 may be reached within the next two
Increasing the allowable maximum account balance in the NY ABLE Program
to an amount equal to the federally authorized level for the 529 College
Savings Program would align NY ABLE with several other states' ABLE
programs and enable participants to maximize the benefits offered by the
PRIOR LEGISLATIVE HISTORY::
FISCAL IMPLICATIONS FOR STATE:
This change would be revenue-neutral to the State of New York, since
contributions to the NY ABLE Program are not tax deductible.
This act shall take effect immediately.