Encouraging Americans to Save Act

Summary: Encouraging Americans to Save Act  This bill amends the Internal Revenue Code to expand the tax credit for retirement savings contributions to: (1) make such credit refundable; (2) allow individual taxpayers (excluding dependents and full-time students) who have attained age 18 as of the close of the taxable year a credit for 50% of their retirement savings contributions up to $1,000; (3) increase the maximum income threshold for determining eligibility for the credit; and (4) allow direct deposit of credit amounts into the taxpayer's retirement savings vehicle (e.g., MyRA or Roth IRA account).  The Department of the Treasury shall educate taxpayers on the benefits of the credit for retirement savings contributions. 

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Encouraging Americans to Save Act''.

SEC. 2. MATCHING PAYMENTS FOR ELECTIVE DEFERRAL AND IRA CONTRIBUTIONS 
              BY CERTAIN INDIVIDUALS.

    (a) 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. MATCHING PAYMENTS FOR ELECTIVE DEFERRAL AND IRA 
              CONTRIBUTIONS BY CERTAIN INDIVIDUALS.

    ``(a) In General.--
            ``(1) Allowance of credit.--Any eligible individual who 
        makes qualified retirement savings contributions for the 
        taxable year shall be allowed a credit for such taxable year in 
        an amount equal to the applicable percentage of so much of the 
        qualified retirement savings contributions made by such 
        eligible individual for the taxable year as does not exceed 
        $1,000.
            ``(2) Payment of credit.--The credit under this section 
        shall be paid by the Secretary as a contribution (as soon as 
        practicable after the eligible individual has filed a tax 
        return for the taxable year) to the applicable retirement 
        vehicle of an eligible individual.
    ``(b) Applicable Percentage.--For purposes of this section--
            ``(1) In general.--Except as provided in paragraph (2), the 
        applicable percentage is 50 percent.
            ``(2) Phaseout.--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--
                    ``(A) the excess of--
                            ``(i) the taxpayer's modified adjusted 
                        gross income for such taxable year, over
                            ``(ii) the applicable dollar amount, bears 
                        to
                    ``(B) the phaseout range.
        If any reduction determined under this paragraph is not a whole 
        percentage point, such reduction shall be rounded to the next 
        lowest whole percentage point.
            ``(3) Applicable dollar amount; phaseout range.--
                    ``(A) Joint returns.--Except as provided in 
                subparagraph (B)--
                            ``(i) the applicable dollar amount is 
                        $65,000, and
                            ``(ii) the phaseout range is $20,000.
                    ``(B) Other returns.--In the case of--
                            ``(i) 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 subsection (g)), and
                            ``(ii) 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 
                        \1/2\ of the amounts applicable under 
                        subparagraph (A) (as so adjusted).
    ``(c) Eligible Individual.--For purposes of this section--
            ``(1) In general.--The term `eligible individual' means any 
        individual if such individual has attained the age of 18 as of 
        the close of the taxable year.
            ``(2) Dependents and full-time students not eligible.--The 
        term `eligible individual' shall not include--
                    ``(A) any individual with respect to whom a 
                deduction under section 151 is allowed to another 
                taxpayer for a taxable year beginning in the calendar 
                year in which such individual's taxable year begins, 
                and
                    ``(B) any individual who is a student (as defined 
                in section 152(f)(2)).
    ``(d) Qualified Retirement Savings Contributions.--For purposes of 
this section--
            ``(1) In general.--The term `qualified retirement savings 
        contributions' means, with respect to any taxable year, the sum 
        of--
                    ``(A) the amount of the qualified retirement 
                contributions (as defined in section 219(e)) made by 
                the eligible individual,
                    ``(B) the amount of--
                            ``(i) any elective deferrals (as defined in 
                        section 402(g)(3)) of such individual, and
                            ``(ii) any elective deferral of 
                        compensation by such individual under an 
                        eligible deferred compensation plan (as defined 
                        in section 457(b)) of an eligible employer 
                        described in section 457(e)(1)(A), and
                    ``(C) the amount of voluntary employee 
                contributions by such individual to any qualified 
                retirement plan (as defined in section 4974(c)).
        Such term shall not include any amount attributable to a 
        payment under subsection (a).
            ``(2) Reduction for certain distributions.--
                    ``(A) In general.--The qualified retirement savings 
                contributions determined under paragraph (1) for a 
                taxable year shall be reduced (but not below zero) by 
                the aggregate distributions received by the individual 
                during the testing period from any entity of a type to 
                which contributions under paragraph (1) may be made.
                    ``(B) Testing period.--For purposes of subparagraph 
                (A), the testing period, with respect to a taxable 
                year, is the period which includes--
                            ``(i) such taxable year,
                            ``(ii) the 2 preceding taxable years, and
                            ``(iii) the period after such taxable year 
                        and before the due date (including extensions) 
                        for filing the return of tax for such taxable 
                        year.
                    ``(C) Excepted distributions.--There shall not be 
                taken into account under subparagraph (A)--
                            ``(i) any distribution referred to in 
                        section 72(p), 401(k)(8), 401(m)(6), 402(g)(2), 
                        404(k), or 408(d)(4),
                            ``(ii) any distribution to which section 
                        408(d)(3) or 408A(d)(3) applies, and
                            ``(iii) any portion of a distribution if 
                        such portion is transferred or paid in a 
                        rollover contribution (as defined in section 
                        402(c), 403(a)(4), 403(b)(8), 408A(e), or 
                        457(e)(16)) to an account or plan to which 
                        qualified retirement contributions can be made.
                    ``(D) Treatment of distributions received by spouse 
                of individual.--For purposes of determining 
                distributions received by an individual under 
                subparagraph (A) for any taxable year, any distribution 
                received by the spouse of such individual shall be 
                treated as received by such individual if such 
                individual and spouse file a joint return for such 
                taxable year and for the taxable year during which the 
                spouse receives the distribution.
    ``(e) Applicable Retirement Savings Vehicle.--
            ``(1) In general.--The term `applicable retirement savings 
        vehicle' means--
                    ``(A) an account or plan elected by the eligible 
                individual under paragraph (2), or
                    ``(B) if no such election is made, a myRA 
                established for the benefit of the eligible individual.
        For purposes of subparagraph (B), if no myRA has previously 
        been established for the benefit of the individual, the 
        Secretary shall establish such an account for such individual 
        for purposes of contributions under this section.
            ``(2) Other retirement vehicles.--An eligible individual 
        may elect to have the amount determined under subsection (a) 
        contributed to an account or plan which--
                    ``(A) is a Roth IRA or a designated Roth account 
                (within the meaning of section 402A) of an applicable 
                retirement plan (as defined in section 402A(e)(1)),
                    ``(B) is for the benefit of the eligible 
                individual,
                    ``(C) accepts contributions made under this 
                section, and
                    ``(D) is designated by such individual (in such 
                form and manner as the Secretary may provide) on the 
                return of tax for the taxable year.
            ``(3) MyRA.--For purposes of paragraph (1), the term `MyRA' 
        means a Roth IRA which is established--
                    ``(A) under the myRA program established under 
                regulations promulgated by the Secretary, and
                    ``(B) by the individual for whose benefit the Roth 
                IRA was created or by the Secretary on behalf of such 
                individual.
    ``(f) Other Definitions and Special Rules.--
            ``(1) Modified adjusted gross income.--For purposes of this 
        section, the term `modified adjusted gross income' means 
        adjusted gross income--
                    ``(A) determined without regard to sections 911, 
                931, and 933, and
                    ``(B) determined without regard to any exclusion or 
                deduction allowed for any qualified retirement savings 
                contribution made during the taxable year.
            ``(2) Treatment of contributions.--In the case of any 
        contribution under subsection (a)(2)--
                    ``(A) except as otherwise provided in this section 
                or by the Secretary under regulations, such 
                contribution shall be treated in the same manner as a 
                contribution made by the individual on whose behalf 
                such contribution was made,
                    ``(B) such contribution shall not be treated as 
                income to the taxpayer, and
                    ``(C) such contribution shall not be taken into 
                account with respect to any applicable limitation under 
                sections 402(g)(1), 403(b), 408(a)(1), 408(b)(2)(B), 
                408A(c)(2), 414(v)(2), 415(c), or 457(b)(2).
            ``(3) Treatment of qualified plans, etc.--A plan or 
        arrangement to which a contribution is made under this section 
        shall not be treated as violating any requirement under section 
        401, 403, 408, or 457 solely by reason of accepting such 
        contribution.
            ``(4) Erroneous credits.--If any contribution is 
        erroneously paid under subsection (a)(2), the amount of such 
        erroneous payment shall be treated as an underpayment of tax.
    ``(g) Inflation Adjustments.--
            ``(1) In general.--In the case of any taxable year 
        beginning in a calendar year after 2017, each of the dollar 
        amounts in subsections (a)(2) and (b)(3)(A)(i) shall 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 2016' for `calendar year 1992' in 
                subparagraph (B) thereof.
            ``(2) Rounding.--Any increase determined under paragraph 
        (1) shall be rounded to the nearest multiple of--
                    ``(A) $100 in the case of an adjustment of the 
                amount in subsection (a)(2), and
                    ``(B) $1,000 in the case of an adjustment of the 
                amount in subsection (b)(3)(A)(i).''.
    (b) Promotion and Guidance.--
            (1) Promotion.--The Secretary of the Treasury (or the 
        Secretary's delegate) shall educate taxpayers on the benefits 
        provided under section 6433 of the Internal Revenue Code of 
        1986.
            (2) Guidance.--Not later than December 31, 2017, the 
        Secretary of the Treasury (or the Secretary's delegate) shall 
        issue guidance on the implementation and administration of the 
        amendments made by this section.
    (c) Payment Authority.--Section 1324(b)(2) of title 31, United 
States Code, is amended by striking ``or 6431'' and inserting ``6431, 
or 6433''.
    (d) Deficiencies.--Section 6211(b)(4) is amended by striking ``and 
6431'' and inserting ``6431, and 6433''.
    (e) Conforming Amendments.--
            (1) Section 25B of the Internal Revenue Code of 1986 is 
        amended by striking subsections (a) through (f) and inserting 
        the following:
``For payment of credit related to qualified retirement savings 
contributions, see section 6433.''.
            (2) 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. Matching payments for elective deferral and IRA 
                            contributions by certain individuals.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2016.