H. R. 6472
IN THE HOUSE OF REPRESENTATIVES
September 20, 2012
Mr. Neal (for himself, Mr. McDermott, Mr. Lewis of Georgia, Mr. Blumenauer, Mr. Kind, and Mr. Ellison) introduced the following bill; which was referred to the Committee on Ways and Means
To amend the Internal Revenue Code of 1986 to expand the availability of the saver’s credit, to make the credit refundable, and to make Federal matching contributions into the retirement savings of the taxpayer.
This Act may be cited as the
Savings for American Families’ Future
Act of 2012.
Modification of saver’s credit
50 percent credit for all taxpayers: expansion of phaseout ranges
Subsection (b) of section 25B of the Internal Revenue Code of 1986 is amended to read as follows:
For purposes of this section—
Except as provided in paragraph (2), the applicable percentage is 50 percent.
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—
the excess of—
the taxpayer’s adjusted gross income for such taxable year, over
the applicable dollar amount, bears to
the phaseout range.
Applicable dollar amount; phaseout range
Except as provided in subparagraph (B)—
the applicable dollar amount is $65,000, and
the phaseout range is $20,000.
In the case of—
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 paragraph (4)), and
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 ½ of the amounts applicable under subparagraph (A) (as so adjusted).
Inflation adjustment of applicable dollar amount
In the case of any taxable year beginning in a calendar year after 2012, the dollar amount in paragraph (3)(A)(i) shall be increased by an amount equal to—
such dollar amount, multiplied by
adjustment determined under section 1(f)(3) for the calendar year in which the
taxable year begins, determined by substituting
calendar year 1992 in subparagraph (B)
Credit made refundable; matching contributions
Credit made refundable
The Internal Revenue Code of 1986 is amended by moving section 25B to subpart C of part IV of subchapter A of chapter 1 of such Code (relating to refundable credits), by inserting section 25B after section 36B, and by redesignating section 25B as section 36C.
Subsection (g) of section 36C of such Code, as redesignated by paragraph (1), is amended to read as follows:
The credit allowed to an eligible individual under this section for any taxable year shall be twice the credit which would (but for this subsection) be allowed if—
the individual consents to the application of paragraph (2), and
a designation by such individual is in effect for such year under paragraph (3).
Credit paid into designated retirement account
Any increase in credit under paragraph (1) for any taxable year shall be paid by the Secretary into the designated retirement account of the individual for such year. The amount payable under the preceding sentence shall be subject to the reductions under section 6402 in the same manner as if such amount were an overpayment. The amount so paid shall be treated as refunded to such individual.
Designated retirement account
For purposes of this subsection, the term designated retirement account means any account or plan—
of a type to which qualified retirement savings contributions may be made,
which is for such individual’s benefit, and
which is designated by such individual (in such form and manner as the Secretary may provide) on the return of tax for the taxable year.
Treatment of matching contributions
In the case of an amount paid under paragraph (2) into a designated retirement account—
any dollar limitation otherwise applicable to the amount of contributions or deferrals to such account shall be increased by the amount so paid,
the individual’s basis in such account shall not be increased by reason of the amount so paid, and
such amount shall be treated as an employer contribution for the plan year in which such amount is paid for purposes of—
section 401(k)(3), and
The Secretary shall prescribe such regulations or other guidance as may be necessary to address situations under which the Secretary is not able to make a payment to a designated retirement account of an individual, including a plan of an employer for which the individual no longer works and to an account that does not exist.
Sections 24(b)(3)(B), 25(e)(1)(C),
26(a)(1), and 1400C(d) of such Code are each amended by striking
The last sentence
of section 25A(i)(5) of such Code is amended by striking
Sections 904(i) of
such Code is amended by striking
23, 24, and 25B, and inserting
23 and 24.
Section 6211(b)(4)(A) of such Code is
amended by inserting
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.
The table of sections for subpart C of such part is amended by adding at the end the following new item:
Sec. 36C. Elective deferrals and IRA contributions by certain individuals.
of title 31, United States Code, is amended by inserting
Subsection (a) of section 36C of such Code, as redesignated by subsection (b), is amended to read as follows:
Allowance of credit
In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to the applicable percentage of so much of the qualified retirement savings contributions of the eligible individual for the taxable year as do not exceed the contribution limit.
For purposes of paragraph (1)—
Except as otherwise provided in this paragraph, the contribution limit is $500 ($1,500 for taxable years beginning after 2022).
Annual increases to reach $1,500
In the case of taxable years beginning in a calendar year after 2012 and before 2023, the contribution limit shall be the sum of—
the contribution limit for taxable years beginning in the preceding calendar year (as increased under this subparagraph), and
In the case of any taxable year beginning in a calendar year after 2022, the $1,500 amount in subparagraph (A) shall be increased by an amount equal to—
such dollar amount, multiplied by
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 2021 for
calendar year 1992 in
subparagraph (B) thereof.
The amendments made by this section shall apply to taxable years beginning after December 31, 2012.