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S. 1961 (117th): IRA Act of 2021


The text of the bill below is as of Jun 7, 2021 (Introduced). The bill was not enacted into law.


II

117th CONGRESS

1st Session

S. 1961

IN THE SENATE OF THE UNITED STATES

June 7, 2021

introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to increase IRA contribution limits for individuals without an employer retirement plan.

1.

Short title

This Act may be cited as the Increasing Retirement Amount Act of 2021 or the IRA Act of 2021.

2.

Increase in contribution limits for individuals without an employer retirement plan

(a)

In general

Section 219 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

(h)

Special rules for individuals without an employer plan

For purposes of this section—

(1)

In general

In the case of an applicable individual—

(A)

the deductible amount for purposes of subsection (b)(1)(A) is $12,000, and

(B)

the applicable amount for purposes of subsection (b)(5)(B)(i) is $3,000.

(2)

Cost-of-living adjustment

(A)

In general

In the case of any taxable year beginning in a calendar year after 2022, the $12,000 amount under paragraph (1)(A) 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) for the calendar year in which the taxable year begins, determined by substituting calendar year 2021 for calendar year 2016 in subparagraph (A)(ii) thereof.

(B)

Rounding rules

If any amount after adjustment under subparagraph (A) is not a multiple of $500, such amount shall be rounded to the next lower multiple of $500.

(3)

Applicable individual

For purposes of paragraph (1), the term applicable individual with respect to any taxable year means any individual whose employer does not maintain a plan described in any clause of subsection (g)(5)(A) for such taxable year.

.

(b)

Coordination with Kay Bailey Hutchinson spousal IRA

Subparagraph (A) of section 219(c)(1) of the Internal Revenue Code of 1986 is amended by striking (b)(1)(A) and inserting (b)(1)(A) (determined without regard to subsection (h)).

(c)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2021.