To amend the Internal Revenue Code of 1986 to provide a partial exclusion of interest from the gross income of individuals, to increase retirement plan contribution limitations, and to temporarily suspend minimum distribution requirements for certain defined contribution plans.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Securing Tomorrow by Saving Today 
Act of 2009''.

SEC. 2. EXEMPTION OF CERTAIN INTEREST INCOME FROM TAX.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to amounts specifically 
excluded from gross income) is amended by inserting after section 115 
the following new section:

``SEC. 116. PARTIAL EXCLUSION OF INTEREST RECEIVED BY INDIVIDUALS.

    ``(a) Exclusion From Gross Income.--Gross income does not include 
interest otherwise includible in gross income which is received during 
the taxable year by an individual.
    ``(b) Limitations.--
            ``(1) Maximum amount.--The aggregate amount excluded under 
        subsection (a) for any taxable year shall not exceed--
                    ``(A) in the case of any taxable year beginning in 
                2009, $500 ($1,000 in the case of a joint return), and
                    ``(B) in the case of taxable years beginning after 
                2009--
                            ``(i) in the case of a joint return, 200 
                        percent of the dollar amount in effect under 
                        clause (ii) for the taxable year, and
                            ``(ii) in any other case, $550.
            ``(2) Inflation adjustment.--In the case of any taxable 
        year beginning after 2010, the $550 amount contained in 
        paragraph (1)(B)(ii) 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 such calendar year by 
                substituting `calendar year 2009' for `calendar year 
                1992' in subparagraph (B) thereof.
        If any increase under the preceding sentence is not a multiple 
        of $10, such increase shall be rounded to the nearest multiple 
        of $10.
    ``(c) Interest.--For purposes of this section, the term `interest' 
means--
            ``(1) interest on deposits with a bank (as defined in 
        section 581),
            ``(2) amounts (whether or not designated as interest) paid 
        in respect of deposits, investment certificates, or 
        withdrawable or repurchasable shares, by--
                    ``(A) a mutual savings bank, cooperative bank, 
                domestic building and loan association, industrial loan 
                association or bank, or credit union, or
                    ``(B) any other savings or thrift institution which 
                is chartered and supervised under Federal or State law,
        the deposits or accounts in which are insured under Federal or 
        State law or which are protected and guaranteed under State 
        law.
    ``(d) Certain Nonresident Aliens Ineligible for Exclusion.--For 
purposes of this section, in the case of a nonresident alien 
individual, subsection (a) shall apply only in determining the taxes 
imposed for the taxable year pursuant to sections 871(b)(1) and 
877(b).''.
    (b) Conforming Amendments.--
            (1) Subparagraph (A) of section 32(i)(2) of such Code is 
        amended by inserting ``(determined without regard to section 
        116)'' before the comma.
            (2) Subparagraph (B) of section 86(b)(2) of such Code is 
        amended to read as follows:
                    ``(B) increased by the sum of--
                            ``(i) the amount of interest received or 
                        accrued by the taxpayer during the taxable year 
                        which is exempt from tax, and
                            ``(ii) the amount of interest received 
                        during the taxable year which is excluded from 
                        gross income under section 116.''.
            (3) Subsection (d) of section 135 of such Code is amended 
        by redesignating paragraph (4) as paragraph (5) and by 
        inserting after paragraph (3) the following new paragraph:
            ``(4) Coordination with section 116.--This section shall be 
        applied before section 116.''.
            (4) Paragraph (2) of section 265(a) of such Code is amended 
        by inserting before the period ``, or to purchase or carry 
        obligations or shares, or to make deposits, to the extent the 
        interest thereon is excludable from gross income under section 
        116''.
            (5) Subsection (c) of section 584 of such Code is amended 
        by adding at the end the following new flush sentence:
``The proportionate share of each participant in the amount of interest 
received by the common trust fund and to which section 116 applies 
shall be considered for purposes of such section as having been 
received by such participant.''.
            (6) Subsection (a) of section 643 of such Code is amended 
        by redesignating paragraph (7) as paragraph (8) and by 
        inserting after paragraph (6) the following new paragraph:
            ``(7) Interest.--There shall be included the amount of any 
        interest excluded from gross income pursuant to section 116.''.
            (7) The table of sections for part III of subchapter B of 
        chapter 1 of such Code is amended by inserting after the item 
        relating to section 115 the following new item:

``Sec. 116. Partial exclusion of dividends and interest received by 
                            individuals.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2008.

SEC. 3. INCREASE IN DOLLAR LIMITATIONS ON CONTRIBUTIONS TO RETIREMENT 
              PLANS.

    (a) Permanent Increase in Dollar Limitation on Deduction for 
Contributions to Individual Retirement Plans.--
            (1) In general.--Paragraph (5) of section 219(b) of the 
        Internal Revenue Code of 1986 is amended--
                    (A) by amending subparagraph (A) to read as 
                follows:
                    ``(A) In general.--The deductible amount for any 
                taxable year is the applicable dollar amount in effect 
                under section 402(g)(1) for such taxable year.'', and
                    (B) by striking subparagraph (D).
            (2) Simple retirement accounts.--Subparagraph (E) of 
        section 408(p)(2) of such Code is amended to read as follows:
                    ``(E) Applicable dollar amount.--For purposes of 
                subparagraph (A)(ii), the applicable dollar amount for 
                any taxable year is the applicable dollar amount in 
                effect under section 402(g)(1) for such taxable 
                year.''.
    (b) Temporary Increase in Contributions to Defined Contribution 
Plans.--
            (1) Increase in limitation on elective deferrals.--
        Paragraph (1) of section 402(g) of such Code is amended by 
        adding at the end the following new subparagraph:
                    ``(D) Temporary increase in applicable dollar 
                amount.--In the case of taxable years beginning in 
                calendar year 2009, 2010, or 2011, the applicable 
                dollar amount determined under subparagraph (B) shall 
                not be less than $33,000.''.
            (2) Increase in combined employee and employer limitation 
        on contributions to defined contribution plans.--Paragraph 1 of 
        section 415(c) of such Code is amended by adding at the end the 
        following new flush sentence:
        ``In the case of taxable years beginning in calendar year 2009, 
        2010, or 2011, the dollar amount in effect under subparagraph 
        (A) shall not be less than $65,500.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2008.

SEC. 4. INCREASE IN PERMITTED CATCH-UP CONTRIBUTIONS TO RETIREMENT 
              PLANS.

    (a) Temporary Increase in Permitted Catch-Up Contributions.--
            (1) In general.--Paragraph (2) of section 414(v) of such 
        Code is amended by adding at the end the following new 
        subparagraph:
                    ``(E) Temporary increase in permitted catch-up 
                contributions.--In the case of taxable years beginning 
                in calendar year 2009, 2010, or 2011, the dollar amount 
                in effect under subparagraph (A) shall not be less than 
                $10,000.''.
            (2) Individual retirement plans.--Subparagraph (B) of 
        section 219(b)(5) of such Code is amended by adding at the end 
        the following new clause:
                            ``(iii) Special rule for 2009 through 
                        2011.--In the case of taxable years beginning 
                        in calendar years 2009, 2010, or 2011, the 
                        dollar amount in effect under clause (i) shall 
                        not be less than $10,000.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2008.

SEC. 5. SUSPENSION OF MINIMUM DISTRIBUTION REQUIREMENTS.

    (a) In General.--In the case of an eligible defined contribution 
plan of an individual, sections 401(a)(9), 404(a)(2), 403(b)(10), 
408(a)(6), 408(b)(3), and 457(d)(2) of the Internal Revenue Code of 
1986 shall not apply with respect to such individual for any year 
during the suspension period.
    (b) Suspension Period.--For purposes of this section, the term 
``suspension period'' means the period beginning on January 1, 2008, 
and ending on December 31, 2012.
    (c) Eligible Defined Contribution Plan.--For purposes of this 
section, the term ``eligible defined contribution plan'' means--
            (1) a defined contribution plan (within the meaning of 
        section 414(i) of such Code) which is--
                    (A) an employee's trust described in section 401(a) 
                of such Code which is exempt from tax under section 
                501(a) of such Code,
                    (B) an annuity plan described in section 403(a) of 
                such Code,
                    (C) an annuity contract described in section 403(b) 
                of such Code, and
                    (D) an eligible deferred compensation plan 
                described in section 457(b) of such Code which is 
                maintained by an eligible employer described in section 
                457(e)(1)(A) of such Code, and
            (2) an individual retirement plan (as defined in section 
        7701(a)(37) of such Code).
    (d) Special Rules.--
            (1) Required beginning date during suspension period.--The 
        required beginning date with respect to any individual under 
        section 401(a)(9) of such Code shall be determined without 
        regard to this section for purposes of applying sections 
        401(a)(9), 404(a)(2), 403(b)(10), 408(a)(6), 408(b)(3), and 
        457(d) of such Code for calendar years after 2009.
            (2) Exception for 5-year rule.--In the case of a 
        distribution required under section 401(a)(9)(B)(ii) of such 
        Code, subsection (a) shall not apply.
            (3) Exemption of distributions during suspension period 
        from trustee transfer and withholding rules.--For purposes of 
        sections 401(a)(31), 402(f), and 3405 of such Code, any 
        distribution during the suspension period which, but for 
        subsection (a), would have been a required distribution under 
        section 401(a)(9) of such Code shall not be treated as an 
        eligible rollover distribution.
    (e) Provisions Relating to Plan Amendments.--
            (1) In general.--If this subsection applies to any plan or 
        annuity contract, such plan or contract shall be treated as 
        being operated in accordance with the terms of the plan during 
        the period described in paragraph (2)(B)(i).
            (2) Amendments to which subsection applies.--
                    (A) In general.--This subsection shall apply to any 
                amendment to any plan or annuity contract which is 
                made--
                            (i) pursuant to this section or pursuant to 
                        any regulation issued by the Secretary of the 
                        Treasury to carry out this section, and
                            (ii) on or before the last day of the first 
                        plan year beginning on or after January 1, 
                        2009.
                    (B) Conditions.--This subsection shall not apply to 
                any amendment unless during the period beginning on the 
                date such amendment takes effect and ending on December 
                31, 2009 (or, if earlier, the date the plan or contract 
                amendment is adopted), the plan or contract is operated 
                as if such plan or contract amendment were in effect.
    (f) Effective Date.--This section shall take effect on the date of 
the enactment of this Act.

Summary: Securing Tomorrow by Saving Today Act of 2009 - Amends the Internal Revenue Code to: (1) allow an exclusion from gross income of interest earned on deposits with certain financial institutions. (2) allow increased contributions, including catch-up contributions, to retirement plans in 2009, 2010, and 2011. And (3) suspend minimum distribution requirements from tax-deferred pension plans and individual retirement accounts between 2008 and 2013.