H.R. 1177 (112th): K-IRA Act

112th Congress, 2011–2013. Text as of Mar 17, 2011 (Introduced).

Status & Summary | PDF | Source: GPO

I

112th CONGRESS

1st Session

H. R. 1177

IN THE HOUSE OF REPRESENTATIVES

March 17, 2011

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 for tax preferred savings accounts for individuals under age 26, and for other purposes.

1.

Short title

This Act may be cited as the Kids IRA Act of 2011 or the K–IRA Act.

2.

Young savers account

(a)

Establishment of accounts

(1)

In general

Section 408A of the Internal Revenue Code of 1986 (relating to Roth IRAs) is amended by adding at the end the following new subsection:

(g)

Young savers account

(1)

In general

Except as provided in this subsection, a young savers account shall be treated in the same manner as a Roth IRA.

(2)

Young savers account

For purposes of this subsection, the term young savers account means, with respect to any taxable year, a Roth IRA which is established and maintained on behalf of an individual who has not attained age 26 before the close of the taxable year.

(3)

Contribution limits

In the case of any contributions for any taxable year to 1 or more young savers accounts established and maintained on behalf of an individual, each of the following contribution limits for the taxable year shall be increased as follows:

(A)

The contribution limit applicable to the individual under subsection (c)(2) shall be increased by the aggregate amount of qualified young saver contributions to such accounts for the taxable year.

(B)

The contribution limits applicable to the young savers accounts under subsection (a)(1) or (b)(2)(B) of section 408, whichever is applicable, shall be increased by the deductible amount in effect under section 219(b)(5) for such taxable year (determined without regard to subparagraph (B) thereof).

(4)

Qualified contributions

For purposes of this subsection—

(A)

In general

The term qualified young saver contribution means a contribution by an individual (with respect to whom a young savers account is not established and maintained during the taxable year) to a young savers account established and maintained on behalf of another individual.

(B)

Limitations

(i)

Limit on accounts with respect to individual

The aggregate amount of contributions which may be made for any taxable year to all young savers accounts established and maintained on behalf of an individual shall not exceed the deductible amount in effect for the taxable year under section 219(b)(5) (determined without regard to subparagraph (B) thereof).

(ii)

Limit on contributors

The aggregate amount of qualified contributions an individual may make for any taxable year to all young savers accounts shall not exceed the deductible amount in effect for the taxable year under section 219(b)(5) (determined without regard to subparagraph (B) thereof).

.

(b)

Partial deductibility of qualified young saver contributions

Section 219 of such Code (relating to retirement savings) is amended by adding at the end the following new subsection:

(f)

Qualified young saver contributions

(1)

In general

The amount allowable as a deduction under this section (determined without regard to this subsection) to any individual for any taxable year shall be increased by an amount equal to 20 percent of so much of the qualified young saver contributions (as defined in section 408A(g)) made by such individual for such taxable year as does not exceed $5,000.

(2)

Limit based on modified adjusted gross income

The amount determined under paragraph (1) shall be reduced in the same manner as under section 408A(c)(3)(A), except that the applicable dollar amount shall be—

(A)

in the case of a taxpayer filing a joint return, $315,000,

(B)

in the case of any other taxpayer (other than a married individual filing a separate return), $200,000, and

(C)

in the case of a married individual filing a separate return, zero.

(3)

Inflation adjustment

In the case of any taxable year beginning in a calendar year after 2012, the dollar amounts in subparagraphs (A) and (B) of paragraph (2) shall each 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 2011 for calendar year 1992 in subparagraph (B) thereof.

Any increase determined under the preceding sentence shall be rounded to the nearest multiple of $1,000.

.

(c)

Conforming amendment

Paragraph (1) of section 408A(c) of such Code (relating to no deduction allowed) is amended by striking No deduction and inserting Except as provided in section 219(f), no deduction.

(d)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2011.