HR 153 IHCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to provide for tax-favored unemployment savings accounts, and for other purposes.CommentsClose CommentsPermalink

January 6, 2009CommentsClose CommentsPermalink

Mr. MCHUGH introduced the following bill; which was referred to the Committee on Ways and MeansCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to provide for tax-favored unemployment savings accounts, and for other purposes.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘Worker Savings Account Act of 2009’.CommentsClose CommentsPermalink

SEC. 2. WORKER SAVINGS ACCOUNTS.

(a) In General- Subpart A of part I of subchapter D of chapter 1 of the Internal Revenue Code of 1986 (relating to pension, profit-sharing, stock bonus plans, etc.) is amended by inserting after section 408A the following new section:CommentsClose CommentsPermalink

‘SEC. 408B. WORKER SAVINGS ACCOUNTS.

‘(a) In General-CommentsClose CommentsPermalink





‘(1) TREATED IN SAME MANNER AS IRA- Except as provided in this section, a worker savings account shall be treated for purposes of this title in the same manner as an individual retirement plan.CommentsClose CommentsPermalink





‘(2) SEPARATE APPLICATION OF RULES- Rules made applicable by reason of this paragraph shall be applied separately with respect to worker savings accounts and individual retirement plans of the individual.CommentsClose CommentsPermalink





‘(b) Worker Savings Account- For purposes of this title, the term ‘worker savings account’ means an individual retirement plan (as defined in section 7701(a)(37)) which is designated (in such manner as the Secretary may prescribe) at the time of establishment of the plan as a worker savings account.CommentsClose CommentsPermalink





‘(c) Contributions-CommentsClose CommentsPermalink





‘(1) EMPLOYER CONTRIBUTIONS- For purposes of this section, the amount in effect under section 219(b)(5)(A), with respect to an individual for a taxable year, shall be increased by the lesser of--CommentsClose CommentsPermalink





‘(A) $5,000, orCommentsClose CommentsPermalink





‘(B) the amounts contributed for the taxable year to the individual’s worker savings account by all employers of the individual.CommentsClose CommentsPermalink





‘(2) WORKER SAVINGS ACCOUNT REFUND PAYMENT- Section 408(a)(1) shall not apply with respect to a payment under section 6431.CommentsClose CommentsPermalink





‘(3) CONTRIBUTIONS AFTER RECEIPT OF SOCIAL SECURITY BENEFITS- Except in the case of a rollover contribution described in subsection (e)(1), no contributions may be made to an individual’s worker savings account during calendar years beginning after the first month such individual begins receiving amounts by reason of entitlement to a monthly benefit under title II of the Social Security Act.CommentsClose CommentsPermalink





‘(d) Treatment of Distributions-CommentsClose CommentsPermalink





‘(1) IN GENERAL- Any amounts distributed from a worker savings account shall be included in gross income, unless such amount is a qualified unemployment distribution.CommentsClose CommentsPermalink





‘(2) QUALIFIED UNEMPLOYMENT DISTRIBUTION- For purposes of this section--CommentsClose CommentsPermalink





‘(A) IN GENERAL- The term ‘qualified unemployment distribution’ means any amount distributed--CommentsClose CommentsPermalink





‘(i) during a period of unemployment of the account beneficiary which is by reason of termination of employment (other than for gross misconduct of the account beneficiary), orCommentsClose CommentsPermalink





‘(ii) not earlier than the first month the account beneficiary receives an amount by reason of entitlement to a monthly benefit under title II of the Social Security Act.CommentsClose CommentsPermalink





‘(3) DISABILITY DISTRIBUTION- Paragraph (1) shall not apply to any amount paid or distributed on or after disability (within the meaning of section 72(m)(7)) of the account beneficiary.CommentsClose CommentsPermalink





‘(4) OTHER DISTRIBUTION RULES-CommentsClose CommentsPermalink





‘(A) EXCESS CONTRIBUTIONS; TRANSFER OF ACCOUNT INCIDENT TO DIVORCE- Rules similar to the rules of paragraphs (4) through (6) of section 408(d) shall apply for purposes of this section.CommentsClose CommentsPermalink





‘(B) NO MINIMUM DISTRIBUTION REQUIREMENT PRIOR TO DEATH- Notwithstanding subsections (a)(6) and (b)(6), section 401(a)(9) and the incidental death benefit requirement of section 401(a) shall not apply for purposes of this subsection.CommentsClose CommentsPermalink





‘(C) TREATMENT AFTER DEATH OF ACCOUNT BENEFICIARY- Rules similar to the rules of paragraph (8) of section 223(f) shall apply for purposes of this section.CommentsClose CommentsPermalink





‘(e) Definitions and Special Rules- For purposes of this section--CommentsClose CommentsPermalink





‘(1) ROLLOVER CONTRIBUTIONS- An amount is described in this paragraph as a rollover contribution if it meets the requirements of clauses (i) and (ii).CommentsClose CommentsPermalink





‘(A) IN GENERAL- Paragraph (1) shall not apply to any amount paid or distributed from a worker savings account to the account holder to the extent--CommentsClose CommentsPermalink





‘(i) the entire amount received is paid into a worker savings account for the benefit of such holder not later than the 60th day after the day on which the holder receives the payment or distribution, orCommentsClose CommentsPermalink





‘(ii) the entire amount received is paid into an eligible retirement plan (as defined in section 408(d)(3)) for the benefit of such holder not later than the 60th day after the day on which the holder receives the payment or distribution, except that the maximum amount which may be paid into such plan may not exceed the portion of the amount received which is includible in gross income (determined without regard to this paragraph).CommentsClose CommentsPermalink





‘(B) LIMITATION- This paragraph shall not apply to any amount described in paragraph (A) received by an individual from a worker savings account if, at any time during the 1-year period ending on the day of such receipt, such individual received any other amount described in subparagraph (A) from a worker savings account which was not includible in the individual’s gross income because of the application of this paragraph.CommentsClose CommentsPermalink





‘(2) ACCOUNT BENEFICIARY- The term ‘account beneficiary’ means the individual on whose behalf the worker savings account is established.CommentsClose CommentsPermalink





‘(f) Inflation Adjustment- In the case of any taxable year beginning in a calendar year after 2010, the dollar amount contained in subsection (c)(1) shall be increased by an amount equal to--CommentsClose CommentsPermalink





‘(1) such dollar amount, multiplied byCommentsClose CommentsPermalink





‘(2) 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 2009’ for ‘calendar year 1992’ in subparagraph (B) thereof.CommentsClose CommentsPermalink





Any increase determined under the preceding sentence shall be rounded to the nearest multiple of $100.’.CommentsClose CommentsPermalink





(b) Clerical Amendment- The table of sections for subpart A of part I of subchapter D of chapter 1 of such Code is amended by inserting after the item relating to section 408A the following new item:CommentsClose CommentsPermalink





‘Sec. 408B. Worker savings accounts.’.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2009.CommentsClose CommentsPermalink

SEC. 3. PORTION OF SAVER’S CREDIT REFUNDABLE.

(a) In General- Section 25B of such Code (relating to elective deferrals and IRA contributions by certain individuals) is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink





‘(h) Portion of Credit Refundable-CommentsClose CommentsPermalink





‘(1) IN GENERAL- The aggregate credits allowed to a taxpayer under subpart C shall be increased by the lesser of--CommentsClose CommentsPermalink





‘(A) $1,000, orCommentsClose CommentsPermalink





‘(B) the amount of the credit attributable to qualified retirement savings contributions made by the individual to worker savings accounts which would be allowed under this section (without regard to this subsection and the limitation under section 26(a)(2) or subsection (g), as the case may be).CommentsClose CommentsPermalink





The amount of the credit allowed under this subsection shall not be treated as a credit allowed under this subpart and shall reduce the amount of credit otherwise allowable under subsection (a) without regard to section 26(a)(2) or subsection (g), as the case may be.CommentsClose CommentsPermalink





‘(2) LIMITATION- The amount of the credit allowed under this section for any taxable year shall not exceed an amount equal to the excess (if any) of--CommentsClose CommentsPermalink





‘(A) $5,000, overCommentsClose CommentsPermalink





‘(B) the aggregate amount of credits allowed under this subsection for all prior taxable years.CommentsClose CommentsPermalink





‘(3) INFLATION ADJUSTMENT- In the case of any taxable year beginning in a calendar year after 2010, each of the dollar amounts contained in paragraphs (1) and (2) shall be increased by an amount equal to--CommentsClose CommentsPermalink





‘(A) such dollar amount, multiplied byCommentsClose CommentsPermalink





‘(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 2009’ for ‘calendar year 1992’ in subparagraph (B) thereof.CommentsClose CommentsPermalink





Any increase determined under the preceding sentence shall be rounded to the nearest multiple of $100.’.CommentsClose CommentsPermalink





(b) Refund Payable to Worker Savings Account-CommentsClose CommentsPermalink





(1) 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:CommentsClose CommentsPermalink

‘SEC. 6431. WORKER SAVINGS ACCOUNT REFUND PAYMENT.

‘(a) In General- In the case of a credit allowed to an individual which is attributable to an increase under section 25B(h), the Secretary shall pay the amount of such credit into the designated retirement account of the individual.CommentsClose CommentsPermalink





‘(b) Designated Retirement Account- The term ‘designated retirement account’ means any worker savings account of the individual--CommentsClose CommentsPermalink





‘(1) which is designated (in such form and manner as the Secretary may provide) on the individual’s return of tax for the taxable year to receive the payment under subsection (a), andCommentsClose CommentsPermalink





‘(2) which, under the terms of the account, accepts the payment described in paragraph (1).’.CommentsClose CommentsPermalink





(2) CLERICAL AMENDMENT- The table of sections for subchapter B of chapter 65 of such Code is amended by adding at the end the following new item:CommentsClose CommentsPermalink





‘Sec. 6431. Worker savings account refund payment.’.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2009.CommentsClose CommentsPermalink

SEC. 4. NO INFERENCE AS TO STATE AND FEDERAL UNEMPLOYMENT COMPENSATION.

No provision of this Act (including the amendments made thereby) shall be construed to--CommentsClose CommentsPermalink





(1) diminish an employer’s obligation to pay any applicable State and Federal unemployment taxes (or any other amount required under State or Federal law to be paid into an unemployment fund), orCommentsClose CommentsPermalink





(2) reduce the amount of unemployment compensation (as defined in section 85(b) of the Internal Revenue Code of 1986) to which an individual is entitled.CommentsClose CommentsPermalink