[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7418 Introduced in House (IH)]
<DOC>
116th CONGRESS
2d Session
H. R. 7418
To amend the Internal Revenue Code of 1986 to provide matching payments
for retirement savings contributions by certain individuals.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 30, 2020
Ms. Judy Chu of California (for herself, Mr. Panetta, and Ms. Sewell of
Alabama) 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 Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Encouraging Americans to Save Act''.
SEC. 2. MATCHING PAYMENTS FOR ELECTIVE DEFERRAL AND IRA CONTRIBUTIONS
BY CERTAIN INDIVIDUALS.
(a) In General.--Subchapter B of chapter 65 of the Internal Revenue
Code of 1986 is amended by adding at the end the following new section:
``SEC. 6433. SAVER'S MATCH.
``(a) In General.--
``(1) Allowance of credit.--Any eligible individual who
makes qualified retirement savings contributions for the
taxable year shall be allowed a credit for such taxable year in
an amount equal to the applicable percentage of so much of the
qualified retirement savings contributions made by such
eligible individual for the taxable year as does not exceed
$3,000.
``(2) Payment of credit.--The credit under this section
shall be paid by the Secretary as a contribution (as soon as
practicable after the eligible individual has filed a tax
return for the taxable year) to the applicable retirement
savings vehicle of an eligible individual.
``(b) Applicable Percentage.--For purposes of this section--
``(1) In general.--Except as provided in paragraph (2), the
applicable percentage is 50 percent.
``(2) Phaseout.--The percentage under paragraph (1) shall
be reduced (but not below zero) by the number of percentage
points which bears the same ratio to 50 percentage points as--
``(A) the excess of--
``(i) the taxpayer's modified adjusted
gross income for such taxable year, over
``(ii) the applicable dollar amount, bears
to
``(B) the phaseout range.
If any reduction determined under this paragraph is not a whole
percentage point, such reduction shall be rounded to the next
lowest whole percentage point.
``(3) Applicable dollar amount; phaseout range.--
``(A) Joint returns.--Except as provided in
subparagraph (B)--
``(i) the applicable dollar amount is
$80,000, and
``(ii) the phaseout range is $20,000.
``(B) Other returns.--In the case of--
``(i) a head of a household (as defined in
section 2(b)), the applicable dollar amount and
the phaseout range shall be \3/4\ of the
amounts applicable under subparagraph (A) (as
adjusted under subsection (g)), and
``(ii) any taxpayer who is not filing a
joint return and who is not a head of a
household (as so defined), the applicable
dollar amount and the phaseout range shall be
\1/2\ of the amounts applicable under
subparagraph (A) (as so adjusted).
``(c) Eligible Individual.--For purposes of this section--
``(1) In general.--The term `eligible individual' means any
individual if such individual has attained the age of 18 as of
the close of the taxable year.
``(2) Dependents and full-time students not eligible.--The
term `eligible individual' shall not include--
``(A) any individual with respect to whom a
deduction under section 151 is allowed to another
taxpayer for a taxable year beginning in the calendar
year in which such individual's taxable year begins,
and
``(B) any individual who is a student (as defined
in section 152(f)(2)).
``(d) Qualified Retirement Savings Contributions.--For purposes of
this section--
``(1) In general.--The term `qualified retirement savings
contributions' means, with respect to any taxable year, the sum
of--
``(A) the amount of the qualified retirement
contributions (as defined in section 219(e)) made by
the eligible individual,
``(B) the amount of--
``(i) any elective deferrals (as defined in
section 402(g)(3)) of such individual, and
``(ii) any elective deferral of
compensation by such individual under an
eligible deferred compensation plan (as defined
in section 457(b)) of an eligible employer
described in section 457(e)(1)(A), and
``(C) the amount of voluntary employee
contributions by such individual to any qualified
retirement plan (as defined in section 4974(c)).
Such term shall not include any amount attributable to a
payment under subsection (a).
``(2) Reduction for certain distributions.--
``(A) In general.--The qualified retirement savings
contributions determined under paragraph (1) for a
taxable year shall be reduced (but not below zero) by
the aggregate distributions received by the individual
during the testing period from any entity of a type to
which contributions under paragraph (1) may be made.
``(B) Testing period.--For purposes of subparagraph
(A), the testing period, with respect to a taxable
year, is the period which includes--
``(i) such taxable year,
``(ii) the 2 preceding taxable years, and
``(iii) the period after such taxable year
and before the due date (including extensions)
for filing the return of tax for such taxable
year.
``(C) Excepted distributions.--There shall not be
taken into account under subparagraph (A)--
``(i) any distribution referred to in
section 72(p), 401(k)(8), 401(m)(6), 402(g)(2),
404(k), or 408(d)(4),
``(ii) any distribution to which section
408(d)(3) or 408A(d)(3) applies, and
``(iii) any portion of a distribution if
such portion is transferred or paid in a
rollover contribution (as defined in section
402(c), 403(a)(4), 403(b)(8), 408A(e), or
457(e)(16)) to an account or plan to which
qualified retirement contributions can be made.
``(D) Treatment of distributions received by spouse
of individual.--For purposes of determining
distributions received by an individual under
subparagraph (A) for any taxable year, any distribution
received by the spouse of such individual shall be
treated as received by such individual if such
individual and spouse file a joint return for such
taxable year and for the taxable year during which the
spouse receives the distribution.
``(e) Applicable Retirement Savings Vehicle.--
``(1) In general.--The term `applicable retirement savings
vehicle' means--
``(A) an account or plan elected by the eligible
individual under paragraph (2), or
``(B) if no such election is made or the Secretary
is not able to make a contribution into the account or
plan selected by the eligible individual, a MyRA
established for the benefit of the eligible individual.
For purposes of subparagraph (B), if no MyRA has previously
been established for the benefit of the individual, the
Secretary shall establish such an account for such individual
for purposes of contributions under this section.
``(2) Other retirement vehicles.--An eligible individual
may elect to have the amount determined under subsection (a)
contributed to an account or plan which--
``(A) is a Roth IRA or a designated Roth account
(within the meaning of section 402A) of an applicable
retirement plan (as defined in section 402A(e)(1)),
``(B) is for the benefit of the eligible
individual,
``(C) accepts contributions made under this
section, and
``(D) is designated by such individual (in such
form and manner as the Secretary may provide) on the
return of tax for the taxable year.
``(3) MyRA.--For purposes of paragraph (1), the term `MyRA'
means a Roth IRA which is established--
``(A) under the MyRA program established under
section 3 of the Encouraging Americans to Save Act, and
``(B) by the individual for whose benefit the Roth
IRA was created or by the Secretary on behalf of such
individual.
``(f) Other Definitions and Special Rules.--
``(1) Modified adjusted gross income.--For purposes of this
section, the term `modified adjusted gross income' means
adjusted gross income--
``(A) determined without regard to sections 911,
931, and 933, and
``(B) determined without regard to any exclusion or
deduction allowed for any qualified retirement savings
contribution made during the taxable year.
``(2) Treatment of contributions.--In the case of any
contribution under subsection (a)(2)--
``(A) except as otherwise provided in this section
or by the Secretary under regulations, such
contribution shall be treated in the same manner as a
contribution made by the individual on whose behalf
such contribution was made,
``(B) such contribution shall not be treated as
income to the taxpayer, and
``(C) such contribution shall not be taken into
account with respect to any applicable limitation under
sections 402(g)(1), 403(b), 408(a)(1), 408(b)(2)(B),
408A(c)(2), 414(v)(2), 415(c), or 457(b)(2).
``(3) Treatment of qualified plans, etc.--A plan or
arrangement to which a contribution is made under this section
shall not be treated as violating any requirement under section
401, 403, 408, or 457 solely by reason of accepting such
contribution.
``(4) Erroneous credits.--If any contribution is
erroneously paid under subsection (a)(2), the amount of such
erroneous payment shall be treated as an underpayment of tax.
``(g) Inflation Adjustments.--
``(1) In general.--In the case of any taxable year
beginning in a calendar year after 2021, each of the dollar
amounts in subsections (a)(2) and (b)(3)(A)(i) shall be
increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year in which
the taxable year begins, determined by substituting
`calendar year 2020' for `calendar year 2016' in
subparagraph (A)(ii) thereof.
``(2) Rounding.--Any increase determined under paragraph
(1) shall be rounded to the nearest multiple of--
``(A) $100 in the case of an adjustment of the
amount in subsection (a)(2), and
``(B) $1,000 in the case of an adjustment of the
amount in subsection (b)(3)(A)(i).''.
(b) Payment Authority.--Section 1324(b)(2) of title 31, United
States Code, is amended by striking ``6431'' and inserting ``6433''.
(c) Deficiencies.--Section 6211(b)(4) of the Internal Revenue Code
of 1986 is amended by striking ``and 6428'' and inserting ``6428, and
6433''.
(d) Conforming Amendments.--
(1) Section 25B of the Internal Revenue Code of 1986 is
amended to read as follows:
``SEC. 25B. SAVER'S CREDIT.
``For payment of credit related to qualified retirement savings
contributions, see section 6433.''.
(2) The table of sections for subchapter B of chapter 65 of
such Code is amended by adding after the item relating to
section 6430 the following new item:
``Sec. 6433. Saver's match.''.
(3) The table of sections for subpart A of part IV of
subchapter A of chapter 1 of such Code is amended by striking
the item relating to section 25B and inserting the following
new item:
``Sec. 25B. Saver's credit.''
(e) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2020.
SEC. 3. ESTABLISHMENT OF MYRA PROGRAM.
(a) In General.--The Secretary of the Treasury (or the Secretary's
delegate) shall, not later than December 31, 2020, establish a
permanent program, to be known as the ``MyRA Program'', which meets the
requirements of this section to establish and maintain a Roth IRA on
behalf of individuals.
(b) Program Specifications.--
(1) In general.--
(A) Roth iras.--The MyRA Program established under
this section shall--
(i) permit an individual to establish a
Roth IRA which satisfies the requirements of
section 408A of the Internal Revenue Code of
1986 on behalf of the individual;
(ii) permit an employer to establish such a
Roth IRA on behalf of 1 or more employees of
such employer;
(iii) require the assets of each Roth IRA
established under the program to be held by the
designated Roth IRA custodian;
(iv) permit contributions to be made
periodically to such Roth IRAs by direct
deposit or other electronic means and by
methods that provide access for the unbanked;
(v) permit distributions and rollovers from
such Roth IRAs upon request of the account
owner;
(vi) include procedures to consolidate
multiple accounts established for the same
individual; and
(vii) ensure that such Roth IRAs are
invested solely in retirement savings bonds
issued by the Department of the Treasury for
the purpose of the MyRA Program.
(B) Regulations, etc.--The Secretary of the
Treasury shall have authority to promulgate such
regulations, rules, and other guidance as are necessary
to implement the MyRA program, and are consistent with
this section, as well as coordination rules permitting
Roth IRAs to be established under the MyRA program in
connection with State and local laws that enroll
residents in Roth IRAs.
(2) No fees.--No fees shall be assessed on participants in
the MyRA Program.
(3) Limitations.--
(A) Contribution minimum.--The Secretary of the
Treasury may establish minimum amounts for initial and
additional contributions to a Roth IRA under the MyRA
Program, not to exceed $5.
(B) Rollover contributions not permitted.--No
rollover contribution shall be accepted to a Roth IRA
under the MyRA program.
(C) Account maximum.--No contributions shall be
credited to a Roth IRA under the MyRA Program after the
account balance of such Roth IRA reaches $15,000.
(D) Limitation on participation.--Within a
reasonable amount of time after the earlier of--
(i) the date the account balance of a Roth
IRA under the MyRA Program reaches $15,000; or
(ii) the earlier of--
(I) the date that the participant
has been a participant in the MyRA
Program for 30 years; or
(II) the date that the participant
reaches age 59\1/2\;
the designated Roth IRA custodian shall provide notice
to the participant that no further contributions will
be accepted and that the participant may elect to have
the account balance rolled over to another Roth IRA
according to the rules relating to rollovers and
conversions of Roth IRAs under the Internal Revenue
Code of 1986.
(E) Adjustment for inflation.--
(i) In general.--In the case of any
calendar year after 2020, the $15,000 amount in
subparagraphs (C) and (D) and subsection
(c)(3)(B) shall be increased by an amount equal
to--
(I) such dollar amount, multiplied
by
(II) the cost-of-living adjustment
determined under section 1(f)(3) of the
Internal Revenue Code of 1986 for the
calendar year, determined by
substituting ``calendar year 2020'' for
``calendar year 2016'' in subparagraph
(A)(ii) thereof.
(ii) Rounding.--If any increase determined
under clause (i) is not a multiple of $50, such
increase shall be rounded to the next lowest
multiple of $50.
(4) Designated roth ira custodian.--For purposes of this
section, the designated Roth IRA custodian is the person
designated by the Secretary of the Treasury to act as custodian
of the Roth IRAs established on behalf of participants in the
retirement savings program of such Department.
(c) Retirement Savings Bonds.--For purposes of this section--
(1) In general.--The term ``retirement savings bond'' means
an interest-bearing electronic United States savings bond
issued to the designated Roth IRA custodian which is available
only to participants in the MyRA Program.
(2) Interest rate.--Bonds issued under the MyRA program
shall earn interest at a rate equal to the greater of
(determined on the issue date)--
(A) the rate earned by the Government Securities
Investment Fund established under section 8438(b)(1) of
title 5, United States Code; or
(B) a Series I United States savings bond.
(3) Bonds to be credited to single account.--Each
retirement savings bond issued to the designated Roth IRA
custodian shall be credited to a single Roth IRA established
through the MyRA Program on behalf of a participant.
(4) Reissue in case of change in custodian.--If a successor
designated Roth IRA custodian is designated under subsection
(b)(4), the retirement savings bonds issued to the predecessor
designated Roth IRA custodian shall be reissued to such
successor.
(d) Roth IRA.--For purposes of this section, the term ``Roth IRA''
has the meaning given such term by section 408A(b) of the Internal
Revenue Code of 1986.
(e) Secretary.--For purposes of this section, the term
``Secretary'' means the Secretary of the Treasury (or the Secretary's
delegate).
SEC. 4. PROMOTION AND GUIDANCE.
(a) Promotion.--
(1) In general.--The Secretary shall take such steps as the
Secretary determines are necessary and appropriate to increase
public awareness of the benefits provided under section 6433 of
the Internal Revenue Code of 1986 and the MyRA Program
established under section 3 of this Act.
(2) Report to congress.--
(A) In general.--Not later than 90 days after the
date of the enactment of this Act, the Secretary shall
provide a report to Congress to summarize the
anticipated promotion efforts of the Treasury with
respect to paragraph (1).
(B) Contents.--The report under subparagraph (A)
shall include--
(i) a description of plans for--
(I) the development and
distribution of digital and print
materials, including the distribution
of such materials to States for
participants in State-sponsored
retirement savings plans, and
(II) the translation of such
materials into the five most commonly
spoken languages in the United States
after English (as determined by
American Community Survey data), and
(ii) such other information as the
Secretary determines necessary.
(b) Guidance.--Not later than December 31, 2020, the Secretary
shall issue guidance on the implementation and administration of the
amendments made by section 2 of this Act.
(c) Secretary.--For purposes of this section, the term
``Secretary'' means the Secretary of the Treasury (or the Secretary's
delegate).
<all>