Encouraging Americans to Save Act

I 117TH CONGRESS 1ST SESSION H. R. 2913 To amend the Internal Revenue Code of 1986 to provide matching payments for retirement savings contributions by certain individuals. IN THE HOUSE OF REPRESENTATIVES APRIL 30, 2021 Ms. CHU (for herself, Mr. PANETTA, and Ms. SEWELL) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to provide matching payments for retirement savings contributions by certain individuals. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Encouraging Ameri- 4 cans to Save Act’’. 5 VerDate Sep 11 2014 02:31 Jun 09, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2913.IH H2913 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 2913 IH SEC. 2. MATCHING PAYMENTS FOR ELECTIVE DEFERRAL 1 AND IRA CONTRIBUTIONS BY CERTAIN INDI- 2 VIDUALS. 3 (a) IN GENERAL.—Subchapter B of chapter 65 of the 4 Internal Revenue Code of 1986 is amended by adding at 5 the end the following new section: 6 ‘‘SEC. 6433. SAVER’S MATCH. 7 ‘‘(a) IN GENERAL.— 8 ‘‘(1) ALLOWANCE OF CREDIT.—Any eligible in- 9 dividual who makes qualified retirement savings con- 10 tributions for the taxable year shall be allowed a 11 credit for such taxable year in an amount equal to 12 the applicable percentage of so much of the qualified 13 retirement savings contributions made by such eligi- 14 ble individual for the taxable year as does not exceed 15 $3,000. 16 ‘‘(2) PAYMENT OF CREDIT.—The credit under 17 this section shall be paid by the Secretary as a con- 18 tribution (as soon as practicable after the eligible in- 19 dividual has filed a tax return for the taxable year) 20 to the applicable retirement savings vehicle of an eli- 21 gible individual. 22 ‘‘(b) APPLICABLE PERCENTAGE.—For purposes of 23 this section— 24 ‘‘(1) IN GENERAL.—Except as provided in para- 25 graph (2), the applicable percentage is 50 percent. 26 VerDate Sep 11 2014 02:31 Jun 09, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2913.IH H2913 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 2913 IH ‘‘(2) PHASEOUT.—The percentage under para- 1 graph (1) shall be reduced (but not below zero) by 2 the number of percentage points which bears the 3 same ratio to 50 percentage points as— 4 ‘‘(A) the excess of— 5 ‘‘(i) the taxpayer’s modified adjusted 6 gross income for such taxable year, over 7 ‘‘(ii) the applicable dollar amount, 8 bears to 9 ‘‘(B) the phaseout range. 10 If any reduction determined under this paragraph is 11 not a whole percentage point, such reduction shall be 12 rounded to the next lowest whole percentage point. 13 ‘‘(3) APPLICABLE DOLLAR AMOUNT; PHASEOUT 14 RANGE.— 15 ‘‘(A) JOINT RETURNS.—Except as pro- 16 vided in subparagraph (B)— 17 ‘‘(i) the applicable dollar amount is 18 $80,000, and 19 ‘‘(ii) the phaseout range is $20,000. 20 ‘‘(B) OTHER RETURNS.—In the case of— 21 ‘‘(i) a head of a household (as defined 22 in section 2(b)), the applicable dollar 23 amount and the phaseout range shall be 3⁄4 24 of the amounts applicable under subpara- 25 VerDate Sep 11 2014 02:31 Jun 09, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2913.IH H2913 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 2913 IH graph (A) (as adjusted under subsection 1 (g)), and 2 ‘‘(ii) any taxpayer who is not filing a 3 joint return and who is not a head of a 4 household (as so defined), the applicable 5 dollar amount and the phaseout range 6 shall be 1⁄2 of the amounts applicable 7 under subparagraph (A) (as so adjusted). 8 ‘‘(4) LIMITATION ON PHASEOUT.—The reduc- 9 tion provided under paragraph (2) shall not apply to 10 the extent that such reduction would result in the 11 amount of the credit allowed under subsection (a) to 12 be less than $100. 13 ‘‘(c) ELIGIBLE INDIVIDUAL.—For purposes of this 14 section— 15 ‘‘(1) IN GENERAL.—The term ‘eligible indi- 16 vidual’ means any individual if such individual has 17 attained the age of 18 as of the close of the taxable 18 year. 19 ‘‘(2) DEPENDENTS AND FULL-TIME STUDENTS 20 NOT ELIGIBLE.—The term ‘eligible individual’ shall 21 not include— 22 ‘‘(A) any individual with respect to whom 23 a deduction under section 151 is allowed to an- 24 other taxpayer for a taxable year beginning in 25 VerDate Sep 11 2014 02:31 Jun 09, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2913.IH H2913 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 2913 IH the calendar year in which such individual’s 1 taxable year begins, and 2 ‘‘(B) any individual who is a student (as 3 defined in section 152(f)(2)). 4 ‘‘(d) QUALIFIED RETIREMENT SAVINGS CONTRIBU- 5 TIONS.—For purposes of this section— 6 ‘‘(1) IN GENERAL.—The term ‘qualified retire- 7 ment savings contributions’ means, with respect to 8 any taxable year, the sum of— 9 ‘‘(A) the amount of the qualified retire- 10 ment contributions (as defined in section 11 219(e)) made by the eligible individual, 12 ‘‘(B) the amount of— 13 ‘‘(i) any elective deferrals (as defined 14 in section 402(g)(3)) of such individual, 15 and 16 ‘‘(ii) any elective deferral of com- 17 pensation by such individual under an eli- 18 gible deferred compensation plan (as de- 19 fined in section 457(b)) of an eligible em- 20 ployer described in section 457(e)(1)(A), 21 and 22 ‘‘(C) the amount of voluntary employee 23 contributions by such individual to any qualified 24 retirement plan (as defined in section 4974(c)). 25 VerDate Sep 11 2014 02:31 Jun 09, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2913.IH H2913 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 2913 IH Such term shall not include any amount attributable 1 to a payment under subsection (a). 2 ‘‘(2) REDUCTION FOR CERTAIN DISTRIBU- 3 TIONS.— 4 ‘‘(A) IN GENERAL.—The qualified retire- 5 ment savings contributions determined under 6 paragraph (1) for a taxable year shall be re- 7 duced (but not below zero) by the aggregate 8 distributions received by the individual during 9 the testing period from any entity of a type to 10 which contributions under paragraph (1) may 11 be made. 12 ‘‘(B) TESTING PERIOD.—For purposes of 13 subparagraph (A), the testing period, with re- 14 spect to a taxable year, is the period which in- 15 cludes— 16 ‘‘(i) such taxable year, 17 ‘‘(ii) the 2 preceding taxable years, 18 and 19 ‘‘(iii) the period after such taxable 20 year and before the due date (including ex- 21 tensions) for filing the return of tax for 22 such taxable year. 23 VerDate Sep 11 2014 02:31 Jun 09, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2913.IH H2913 kjohnson on DSK79L0C42PROD with BILLS 7 •HR 2913 IH ‘‘(C) EXCEPTED DISTRIBUTIONS.—There 1 shall not be taken into account under subpara- 2 graph (A)— 3 ‘‘(i) any distribution referred to in 4 section 72(p), 401(k)(8), 401(m)(6), 5 402(g)(2), 404(k), or 408(d)(4), 6 ‘‘(ii) any distribution to which section 7 408(d)(3) or 408A(d)(3) applies, and 8 ‘‘(iii) any portion of a distribution if 9 such portion is transferred or paid in a 10 rollover contribution (as defined in section 11 402(c), 403(a)(4), 403(b)(8), 408A(e), or 12 457(e)(16)) to an account or plan to which 13 qualified retirement contributions can be 14 made. 15 ‘‘(D) TREATMENT OF DISTRIBUTIONS RE- 16 CEIVED BY SPOUSE OF INDIVIDUAL.—For pur- 17 poses of determining distributions received by 18 an individual under subparagraph (A) for any 19 taxable year, any distribution received by the 20 spouse of such individual shall be treated as re- 21 ceived by such individual if such individual and 22 spouse file a joint return for such taxable year 23 and for the taxable year during which the 24 spouse receives the distribution. 25 VerDate Sep 11 2014 02:31 Jun 09, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2913.IH H2913 kjohnson on DSK79L0C42PROD with BILLS 8 •HR 2913 IH ‘‘(e) APPLICABLE RETIREMENT SAVINGS VEHI- 1 CLE.— 2 ‘‘(1) IN GENERAL.—The term ‘applicable retire- 3 ment savings vehicle’ means— 4 ‘‘(A) an account or plan elected by the eli- 5 gible individual under paragraph (2), or 6 ‘‘(B) if no such election is made or the 7 Secretary is not able to make a contribution 8 into the account or plan selected by the eligible 9 individual, a MyRA established for the benefit 10 of the eligible individual. 11 For purposes of subparagraph (B), if no MyRA has 12 previously been established for the benefit of the in- 13 dividual, the Secretary shall establish such an ac- 14 count for such individual for purposes of contribu- 15 tions under this section. 16 ‘‘(2) OTHER RETIREMENT VEHICLES.—An eligi- 17 ble individual may elect to have the amount deter- 18 mined under subsection (a) contributed to an ac- 19 count or plan which— 20 ‘‘(A) is a Roth IRA or a designated Roth 21 account (within the meaning of section 402A) 22 of an applicable retirement plan (as defined in 23 section 402A(e)(1)), 24 VerDate Sep 11 2014 02:31 Jun 09, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2913.IH H2913 kjohnson on DSK79L0C42PROD with BILLS 9 •HR 2913 IH ‘‘(B) is for the benefit of the eligible indi- 1 vidual, 2 ‘‘(C) accepts contributions made under this 3 section, and 4 ‘‘(D) is designated by such individual (in 5 such form and manner as the Secretary may 6 provide) on the return of tax for the taxable 7 year. 8 ‘‘(3) MYRA.—For purposes of paragraph (1), 9 the term ‘MyRA’ means a Roth IRA which is estab- 10 lished— 11 ‘‘(A) under the MyRA program established 12 under section 3 of the Encouraging Americans 13 to Save Act, and 14 ‘‘(B) by the individual for whose benefit 15 the Roth IRA was created or by the Secretary 16 on behalf of such individual. 17 ‘‘(f) OTHER DEFINITIONS AND SPECIAL RULES.— 18 ‘‘(1) MODIFIED ADJUSTED GROSS INCOME.— 19 For purposes of this section, the term ‘modified ad- 20 justed gross income’ means adjusted gross income— 21 ‘‘(A) determined without regard to sections 22 911, 931, and 933, and 23 ‘‘(B) determined without regard to any ex- 24 clusion or deduction allowed for any qualified 25 VerDate Sep 11 2014 02:31 Jun 09, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2913.IH H2913 kjohnson on DSK79L0C42PROD with BILLS 10 •HR 2913 IH retirement savings contribution made during 1 the taxable year. 2 ‘‘(2) TREATMENT OF CONTRIBUTIONS.—In the 3 case of any contribution under subsection (a)(2)— 4 ‘‘(A) except as otherwise provided in this 5 section or by the Secretary under regulations, 6 such contribution shall be treated in the same 7 manner as a contribution made by the indi- 8 vidual on whose behalf such contribution was 9 made, 10 ‘‘(B) such contribution shall not be treated 11 as income to the taxpayer, and 12 ‘‘(C) such contribution shall not be taken 13 into account with respect to any applicable limi- 14 tation under sections 402(g)(1), 403(b), 15 408(a)(1), 408(b)(2)(B), 408A(c)(2), 414(v)(2), 16 415(c), or 457(b)(2). 17 ‘‘(3) TREATMENT OF QUALIFIED PLANS, ETC.— 18 A plan or arrangement to which a contribution is 19 made under this section shall not be treated as vio- 20 lating any requirement under section 401, 403, 408, 21 or 457 solely by reason of accepting such contribu- 22 tion. 23 ‘‘(4) ERRONEOUS CREDITS.—If any contribu- 24 tion is erroneously paid under subsection (a)(2), the 25 VerDate Sep 11 2014 02:31 Jun 09, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H2913.IH H2913 kjohnson on DSK79L0C42PROD with BILLS 11 •HR 2913 IH amount of such erroneous payment shall be treated 1 as an underpayment of tax. 2 ‘‘(g) INFLATION ADJUSTMENTS.— 3 ‘‘(1) IN GENERAL.—In the case of any taxable 4 year beginning in a calendar year after 2022, each 5 of the dollar amounts in subsections (a)(2) and 6 (b)(3)(A)(i) shall be increased by an amount equal 7 to— 8 ‘‘(A) such dollar amount, multiplied by 9 ‘‘(B) the cost-of-living adjustment deter- 10 mined under section 1(f)(3) for the calendar 11 year in which the taxable year begins, deter- 12 mined by substituting ‘calendar year 2021’ for 13 ‘calendar year 2016’ in subparagraph (A)(ii) 14 thereof. 15 ‘‘(2) ROUNDING.—Any increase determined 16 under paragraph (1) shall be rounded to the nearest 17 multiple of— 18 ‘‘(A) $100 in the case of an adjustment of 19 the amount in subsection (a)(2), and 20 ‘‘(B) $1,000 in the case of an adjustment 21 of the amount in subsection (b)(3)(A)(i).’’. 22 (b) PAYMENT AUTHORITY.—Section 1324(b)(2) of 23 title 31, United States Code, is amended by striking 24 ‘‘6431’’ and inserting ‘‘6433’’. 25 VerDate Sep 11 2014 02:31 Jun 09, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H2913.IH H2913 kjohnson on DSK79L0C42PROD with BILLS 12 •HR 2913 IH (c) DEFICIENCIES.—Section 6211(b)(4) of the Inter- 1 nal Revenue Code of 1986 is amended by striking ‘‘and 2 6428’’ and inserting ‘‘6428, and 6433’’. 3 (d) CONFORMING AMENDMENTS.— 4 (1) Section 25B of the Internal Revenue Code 5 of 1986 is amended to read as follows: 6 ‘‘SEC. 25B. SAVER’S CREDIT. 7 ‘‘For payment of credit related to qualified retire- 8 ment savings contributions, see section 6433.’’. 9 (2) The table of sections for subchapter B of 10 chapter 65 of such Code is amended by adding after 11 the item relating to section 6430 the following new 12 item: 13 ‘‘Sec. 6433. Saver’s match.’’. (3) The table of sections for subpart A of part 14 IV of subchapter A of chapter 1 of such Code is 15 amended by striking the item relating to section 25B 16 and inserting the following new item: 17 ‘‘Sec. 25B. Saver’s credit.’’ (e) EFFECTIVE DATE.—The amendments made by 18 this section shall apply to taxable years beginning after 19 December 31, 2021. 20 SEC. 3. ESTABLISHMENT OF MYRA PROGRAM. 21 (a) IN GENERAL.—The Secretary of the Treasury (or 22 the Secretary’s delegate) shall, not later than December 23 31, 2021, establish a permanent program, to be known 24 VerDate Sep 11 2014 02:31 Jun 09, 2021 Jkt 019200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H2913.IH H2913 kjohnson on DSK79L0C42PROD with BILLS 13 •HR 2913 IH as the ‘‘MyRA Program’’, which meets the requirements 1 of this section to establish and maintain a Roth IRA on 2 behalf of individuals. 3 (b) PROGRAM SPECIFICATIONS.— 4 (1) IN GENERAL.— 5 (A) ROTH IRAS.—The MyRA Program es- 6 tablished under this section shall— 7 (i) permit an individual to establish a 8 Roth IRA which satisfies the requirements 9 of section 408A of the Internal Revenue 10 Code of 1986 on behalf of the individual; 11 (ii) permit an employer to establish 12 such a Roth IRA on behalf of 1 or more 13 employees of such employer; 14 (iii) require the assets of each Roth 15 IRA established under the program to be 16 [Text truncated for display. 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