Start Saving Sooner Act of 2015

Summary: Start Saving Sooner Act of 2015  Amends the Internal Revenue Code to establish a tax-exempt individual retirement account for taxpayers under age 18, to be known as a young savers account. Treats such accounts as Roth individual retirement accounts for income tax purposes. Allows the tax credit for retirement savings for contributions to a young savers account. Directs the Secretary of the Treasury to pay any overpayment of tax that is attributable to the tax credit for retirement savings to the taxpayer's young savers account. 

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Start Saving Sooner Act of 2015''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) Studies indicate that children as young as 3 years old 
        are able to grasp financial concepts and that basic financial 
        habits are largely formulated by age 7.
            (2) Research shows that children born to low-income parents 
        who are good financial savers are more likely to move up the 
        economic ladder than children from low-income households that 
        do not save. According to a 2011 study controlled for income 
        and demographic factors, youth who own financial accounts are 7 
        times more likely to attend college.
            (3) If tax-advantaged retirement accounts such as Roth IRAs 
        could be opened for children between the ages of zero and 18, 
        these individuals are likely to acquire substantially more tax-
        free assets by retirement age than their peers.
            (4) Children who possess retirement accounts from a young 
        age will benefit from longer exposure to compound interest and 
        can be expected to attain higher levels of financial literacy, 
        college graduation and retirement security in adulthood.
            (5) Greater private retirement savings for Americans of all 
        ages will increase personal financial security and 
        responsibility, reducing the likelihood that seniors will need 
        to rely solely on Social Security for their retirement income.
            (6) Federal policy should better enable parents, guardians 
        and families of all income levels to encourage youth saving and 
        investment for retirement at an earlier age.
            (7) Federal policy should help create retirement savings 
        incentives for low-income Americans because studies show that 
        low-income Americans will save more for retirement if there are 
        incentives and structures in place to help them do so. A 
        refundable incentive like the Saver's Credit would reach 50 
        million low-income households--nearly 10 times the number a 
        non-refundable credit reaches.

SEC. 3. YOUNG SAVERS ACCOUNT.

    (a) Establishment of Accounts.--
            (1) In general.--Section 408A of the Internal Revenue Code 
        of 1986 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 maintained on behalf 
        of an individual who has not attained age 18 before the close 
        of the taxable year and which is designated (in such manner as 
        the Secretary may prescribe) at the time of establishment as a 
        young savers account.
            ``(3) Contribution limits.--In the case of any 
        contributions for any taxable year to 1 or more young savers 
        accounts 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 young saver 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 
                maintained during the taxable year) to a young savers 
                account 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 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 young saver 
                        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), reduced by any contributions made by 
                        or on behalf of the individual to any Roth IRA 
                        maintained on behalf of the individual.''.
    (b) Eligible for Savers Credit.--Paragraph (1) of section 25B(d) of 
such Code is amended by striking ``and'' at the end of subparagraph 
(B)(ii), by striking the period at the end of subparagraph (C) and 
inserting ``, and'', and by adding at the end the following new 
subparagraph:
                    ``(D) the amount of any contribution to a young 
                savers account.''.
    (c) Refund Payable to Young Savers Account.--
            (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:

``SEC. 6433. YOUNG SAVERS ACCOUNT REFUND PAYMENT.

    ``In the case of any overpayment (or portion thereof) which is 
attributable to a credit allowed to an individual under section 25B by 
reason of a contribution to a young savers account, the Secretary shall 
pay the amount of such overpayment (or such portion) into the young 
savers account to which such contribution was made. The Secretary shall 
prescribe such regulations as may be necessary to carry out the 
purposes of this section.''.
            (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:

``Sec. 6433. Young savers account refund payment.''.
    (d) Young Savers Account Information Included With Application for 
Social Security Card.--The Commissioner of Social Security, in 
consultation with the Secretary of the Treasury, shall include with 
materials relating to the application for a social security card 
information describing young savers accounts (as defined in section 
408A(g)(2) of the Internal Revenue Code of 1986) and related tax 
benefits.
    (e) Account Funds Disregarded for Purposes of All Means Tested 
Federal Programs.--Notwithstanding any other provision of Federal law, 
assets accumulated in young savers accounts (within the meaning of 
section 408A(g) of the Internal Revenue Code of 1986) shall not be 
taken into account in determining any individual's or household's 
financial eligibility for, or amount of, any benefit or service, paid 
for in whole or in part with Federal funds, including student financial 
aid.
    (f) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2014.