To amend the Internal Revenue Code of 1986 to modify the saver's credit.

Summary: Retirement Savings for Working Americans Act - Amends Internal Revenue Code provisions relating to the tax credit for retirement savings contributions (saver's credit) to: (1) require the Secretary of the Treasury to deposit saver's credit amounts directly into the designated retirement account of the taxpayer; (2) expand income eligibility levels for the saver's credit; (3) allow taxpayers that contribute to a qualified tuition program or a Coverdell education savings account to claim such contributions as retirement savings contributions; and (4) adjust the saver's credit maximum contribution amount for inflation beginning after 2007.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Retirement Savings for Working 
Americans Act''.

SEC. 2. MODIFICATION OF SAVER'S CREDIT.

    (a) Full Credit Amount Made as Payment Into Retirement Accounts.--
The Internal Revenue Code of 1986 is amended--
            (1) by redesignating section 25B as section 30D, and by 
        moving section 30D (as so redesignated) from subpart A of part 
        IV of subchapter A of chapter 1 (relating to nonrefundable 
        personal credits) to immediately after section 30C in subpart B 
        of such part (relating to other credits), and
            (2) by amending subsection (g) of section 30D (as so 
        redesignated) to read as follows:
    ``(g) Credit Payable Only Into Retirement Account.--
            ``(1) In general.--The Secretary of the Treasury shall pay 
        into the designated retirement account of the taxpayer an 
        amount equal to the credit determined under subsection (a) for 
        the taxable year.
            ``(2) Designated retirement account.--For purposes of this 
        subsection, the term `designated retirement account' means any 
        account or plan--
                    ``(A) with respect to which qualified retirement 
                savings contributions of the taxpayer are taken into 
                account under subsection (a) for the taxable year,
                    ``(B) which is designated by the taxpayer (in such 
                form and manner as the Secretary may provide) on the 
                return of tax for the taxable year, and
                    ``(C) which, under the terms of the account or 
                plan, accepts the payment described in paragraph (1).
            ``(3) No double benefit.--The credit determined under 
        subsection (a) shall not be allowed as a credit against any tax 
        imposed by this title.''.
    (b) Expansion of Phaseout Ranges.--Subsection (b) of section 30D of 
such Code, as redesignated by this section, is amended to read as 
follows:
    ``(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.--With respect to any taxpayer for any 
        taxable year, the applicable percentage shall be reduced (but 
        not below zero) by the percentage which bears the same ratio to 
        50 percent as--
                    ``(A) the excess of--
                            ``(i) the taxpayer's adjusted gross income 
                        for such taxable year, over
                            ``(ii) the applicable dollar amount, bears 
                        to
                    ``(B) the phaseout range.
        If any reduction under this paragraph is not a multiple of 1 
        percent, such reduction shall be rounded to the nearest 
        multiple of 1 percent.
            ``(3) Applicable dollar amount; phaseout range.--The 
        applicable dollar amount and the phaseout range shall be 
        determined in accordance with the following table:

 
                                                                                                   The phaseout
                 In the case of:                         The applicable dollar amount is:           range is:
 
A joint return..................................  $60,000                                               $10,000
A head of a household...........................  $45,000                                                $7,500
Any other case..................................  $30,000                                             $5,000''.
 

    (c) Tax-Preferred Education Savings Treated as Retirement 
Savings.--Subsection (d) of section 30D of such Code, as redesignated 
by this section, is amended by adding at the end the following new 
paragraph:
            ``(3) Education savings account contributions treated as 
        retirement savings.--Amounts contributed to qualified tuition 
        programs under section 529 and amounts contributed to Coverdell 
        education savings accounts under section 530 shall be treated 
        as qualified retirement savings contributions (subject to any 
        reduction under paragraph (2)).''.
    (d) Limitation on Retirement Contributions Taken Into Account 
Indexed for Inflation.--Section 30D of such Code, as redesignated by 
this section, is amended by adding at the end the following new 
subsection:
    ``(h) Inflation Adjustment.--In the case of any taxable year 
beginning in a calendar year after 2007, the dollar amounts in 
subsection (a) shall be increased by an amount equal to--
            ``(1) such dollar amount, multiplied by
            ``(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 `2006' for `1992' in 
        subparagraph (B) thereof.
Any increase determined under the preceding sentence shall be rounded 
to the nearest multiple of $100.''.
    (e) Conforming Amendments.--
            (1) Section 24(b)(3)(B) of such Code is amended by striking 
        ``and 25B''.
            (2) Section 25(e)(1)(C) of such Code is amended by striking 
        ``25B,''.
            (3) Sections 26(a)(1), 904(i), and 1400C(d) of such Code 
        are each amended by striking ``24, and 25B'' and inserting 
        ``and 24''.
            (4) The heading of section 30D of such Code, as 
        redesignated by this section, is amended to read as follows:

``SEC. 30D. SAVER'S CREDIT.''.

            (5) Section 30D(a) of such Code, as so redesignated, is 
        amended by striking ``there shall be allowed as a credit 
        against the tax imposed by this subtitle for the taxable year'' 
        and inserting ``the credit determined under this subsection for 
        the taxable year is''.
            (6) 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.
            (7) The table of sections for subpart B of such part is 
        amended by adding at the end the following new item:

``Sec. 30D. Saver's credit.''.
            (8) Section 1324(b)(2) of title 31, United States Code, is 
        amended by inserting ``or 30D'' after ``section 35''.
    (f) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2007.