Policy Corner: January 7, 2022

IRS Increases Gift Tax Exclusion for ABLE Accounts

The Internal Revenue Service (IRS) increased the federal gift tax exclusion from $15,000 to $16,000 annually starting January 2022 for contributions to Achieving a Better Life Experience (ABLE) accounts authorized under the ABLE Act of 2014. The Act allows states to create tax-advantaged savings programs for eligible people with disabilities (designated beneficiaries). Funds from these 529A ABLE accounts can help designated beneficiaries pay for qualified disability expenses. Distributions are tax-free if used for these expenses. This is the first time in four years the federal gift tax has increased the contribution amount allowed. The increase is due to inflation.

The ABLE Act limits eligibility to individuals with disabilities with an age of onset of disability before turning 26 years of age. Sen. Robert Casey, Jr. (D-Pa.) and Rep. Thomas Suozzi (D-N.Y.) have introduced the ABLE Age Adjustment Act introduced, S. 331 and H.R. 1219, to increase the age threshold from 26 to 46 for tax-favored ABLE accounts. To establish an account, an individual must have a qualifying impairment that began before the individual attained the age threshold.

President Signs National Defense Authorization for FY 2022

President Biden signed into law the National Defense Authorization Act for Fiscal Year 2022, S. 1605, which authorizes funding for military activities. Included in the bill is a provision authorizing $10 million for military children with severe disabilities. The legislation also requires the Secretary of Defense to provide certain federal employees and their family members experiencing symptoms of anomalous health conditions relating to injury or affliction timely access for medical assessment and treatment, subject to space availability, at certain medical treatment facilities.

State Department to Investigate Havana Syndrome

Secretary of State Antony Blinken appointed Jonathan Moore, Principal Deputy Assistant Secretary and a member of the Senior Foreign Service, and Margaret Uyehara, formerly the U.S. Ambassador to Montenegro, to lead the department’s Health Incidents Response Task Force to investigate cases of Havana Syndrome, which the department refers to as Anomalous Health Incidents. Individuals experiencing this new syndrome have reported nausea, headaches, dizziness, vomiting, and other symptoms in line with traumatic brain injury (TBI).

Intelligence Committee Chairman Mark R. Warner (D-Va.), Vice Chairman Marco Rubio (R-Fla.), Sens. Susan Collins (R-Maine), and Jeanne Shaheen (D-N.H.) introduced the Helping American Victims Afflicted by Neurological Attacks (HAVANA) Act, S. 1828, to support public servants who have incurred brain injuries likely from directed energy attacks that was signed into law in October. The law authorized additional financial support for individuals who have been injured.

BIAA gratefully acknowledges the Centre for Neuro Skills and Avanir Pharmaceuticals for their support for legislative action. Click here to read past issues of Policy Corner.