II 

116TH CONGRESS 

2D SESSION S. 5035 

To amend the Internal Revenue Code of 1986 to provide matching payments 

for retirement savings contributions by certain individuals. 

IN THE SENATE OF THE UNITED STATES 

DECEMBER 16, 2020 

Mr. WYDEN (for himself, Mr. BENNET, Mr. BROWN, Mr. CASEY, Ms. CORTEZ

MASTO, Mr. DURBIN, Ms. KLOBUCHAR, and Mrs. MURRAY) introduced 

the following bill; which was read twice and referred to the Committee 

on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

matching payments for retirement savings contributions 

by certain individuals. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Encouraging Ameri5 cans to Save Act’’. 


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1 SEC. 2. MATCHING PAYMENTS FOR ELECTIVE DEFERRAL 

2 AND IRA CONTRIBUTIONS BY CERTAIN INDI3 VIDUALS. 

4 (a) IN GENERAL.—Subchapter B of chapter 65 of the 

5 Internal Revenue Code of 1986 is amended by adding at 

6 the end the following new section: 

7 ‘‘SEC. 6433. MATCHING PAYMENTS FOR ELECTIVE DEFER8 RAL AND IRA CONTRIBUTIONS BY CERTAIN 

9 INDIVIDUALS. 

10 ‘‘(a) IN GENERAL.— 

11 ‘‘(1) ALLOWANCE OF CREDIT.—Any eligible in12 dividual who makes qualified retirement savings con13 tributions for the taxable year shall be allowed a 

14 credit for such taxable year in an amount equal to 

15 the applicable percentage of so much of the qualified 

16 retirement savings contributions made by such eligi17 ble individual for the taxable year as does not exceed 

18 $2,000. 

19 ‘‘(2) PAYMENT OF CREDIT.—The credit under 

20 this section shall be paid by the Secretary as a con21 tribution (as soon as practicable after the eligible in22 dividual has filed a tax return for the taxable year) 

23 to the applicable retirement savings vehicle of an eli24 gible individual. 

25 ‘‘(b) APPLICABLE PERCENTAGE.—For purposes of 

26 this section— 


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1 ‘‘(1) IN GENERAL.—Except as provided in para2 graph (2), the applicable percentage is 50 percent. 

3 ‘‘(2) PHASEOUT.—The percentage under para4 graph (1) shall be reduced (but not below zero) by 

5 the number of percentage points which bears the 

6 same ratio to 50 percentage points as— 

7 ‘‘(A) the excess of— 

8 ‘‘(i) the taxpayer’s modified adjusted 

9 gross income for such taxable year, over 

10 ‘‘(ii) the applicable dollar amount, 

11 bears to 

12 ‘‘(B) the phaseout range. 

13 If any reduction determined under this paragraph is 

14 not a whole percentage point, such reduction shall be 

15 rounded to the next lowest whole percentage point. 

16 ‘‘(3) APPLICABLE DOLLAR AMOUNT; PHASEOUT

17 RANGE.— 

18 ‘‘(A) JOINT RETURNS.—Except as pro19 vided in subparagraph (B)— 

20 ‘‘(i) the applicable dollar amount is 

21 $65,000, and 

22 ‘‘(ii) the phaseout range is $20,000. 

23 ‘‘(B) OTHER RETURNS.—In the case of— 

24 ‘‘(i) a head of a household (as defined 

25 in section 2(b)), the applicable dollar 


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amount and the phaseout range shall be 3 1 ⁄4

2 of the amounts applicable under subpara3 graph (A) (as adjusted under subsection 

4 (g)), and 

5 ‘‘(ii) any taxpayer who is not filing a 

6 joint return and who is not a head of a 

7 household (as so defined), the applicable 

8 dollar amount and the phaseout range 

shall be 1 9 ⁄2 of the amounts applicable 

10 under subparagraph (A) (as so adjusted). 

11 ‘‘(4) EXCEPTION; MINIMUM CREDIT.—In the 

12 case of an eligible individual with respect to whom 

13 (without regard to this paragraph) the credit deter14 mined under subsection (a)(1) is greater than zero 

15 but less than $100, the credit allowed under this 

16 section shall be $100. 

17 ‘‘(c) ELIGIBLE INDIVIDUAL.—For purposes of this 

18 section— 

19 ‘‘(1) IN GENERAL.—The term ‘eligible indi20 vidual’ means any individual if such individual has 

21 attained the age of 18 as of the close of the taxable 

22 year. 

23 ‘‘(2) DEPENDENTS AND FULL-TIME STUDENTS

24 NOT ELIGIBLE.—The term ‘eligible individual’ shall 

25 not include— 


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1 ‘‘(A) any individual with respect to whom 

2 a deduction under section 151 is allowed to an3 other taxpayer for a taxable year beginning in 

4 the calendar year in which such individual’s 

5 taxable year begins, and 

6 ‘‘(B) any individual who is a student (as 

7 defined in section 152(f)(2)). 

8 ‘‘(d) QUALIFIED RETIREMENT SAVINGS CONTRIBU9 TIONS.—For purposes of this section— 

10 ‘‘(1) IN GENERAL.—The term ‘qualified retire11 ment savings contributions’ means, with respect to 

12 any taxable year, the sum of— 

13 ‘‘(A) the amount of the qualified retire14 ment contributions (as defined in section 

15 219(e)) made by the eligible individual, 

16 ‘‘(B) the amount of— 

17 ‘‘(i) any elective deferrals (as defined 

18 in section 402(g)(3)) of such individual, 

19 and 

20 ‘‘(ii) any elective deferral of com21 pensation by such individual under an eli22 gible deferred compensation plan (as de23 fined in section 457(b)) of an eligible em24 ployer described in section 457(e)(1)(A), 

25 and 


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1 ‘‘(C) the amount of voluntary employee 

2 contributions by such individual to any qualified 

3 retirement plan (as defined in section 4974(c)). 

4 Such term shall not include any amount attributable 

5 to a payment under subsection (a). 

6 ‘‘(2) REDUCTION FOR CERTAIN DISTRIBU7 TIONS.— 

8 ‘‘(A) IN GENERAL.—The qualified retire9 ment savings contributions determined under 

10 paragraph (1) for a taxable year shall be re11 duced (but not below zero) by the aggregate 

12 distributions received by the individual during 

13 the testing period from any entity of a type to 

14 which contributions under paragraph (1) may 

15 be made. 

16 ‘‘(B) TESTING PERIOD.—For purposes of 

17 subparagraph (A), the testing period, with re18 spect to a taxable year, is the period which in19 cludes— 

20 ‘‘(i) such taxable year, 

21 ‘‘(ii) the 2 preceding taxable years, 

22 and 

23 ‘‘(iii) the period after such taxable 

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1 tensions) for filing the return of tax for 

2 such taxable year. 

3 ‘‘(C) EXCEPTED DISTRIBUTIONS.—There 

4 shall not be taken into account under subpara5 graph (A)— 

6 ‘‘(i) any distribution referred to in 

7 section 72(p), 401(k)(8), 401(m)(6), 

8 402(g)(2), 404(k), or 408(d)(4), 

9 ‘‘(ii) any distribution to which section 

10 408(d)(3) or 408A(d)(3) applies, and 

11 ‘‘(iii) any portion of a distribution if 

12 such portion is transferred or paid in a 

13 rollover contribution (as defined in section 

14 402(c), 403(a)(4), 403(b)(8), 408A(e), or 

15 457(e)(16)) to an account or plan to which 

16 qualified retirement contributions can be 

17 made. 

18 ‘‘(D) TREATMENT OF DISTRIBUTIONS RE19 CEIVED BY SPOUSE OF INDIVIDUAL.—For pur20 poses of determining distributions received by 

21 an individual under subparagraph (A) for any 

22 taxable year, any distribution received by the 

23 spouse of such individual shall be treated as re24 ceived by such individual if such individual and 

25 spouse file a joint return for such taxable year 


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1 and for the taxable year during which the 

2 spouse receives the distribution. 

3 ‘‘(e) APPLICABLE RETIREMENT SAVINGS VEHI4 CLE.— 

5 ‘‘(1) IN GENERAL.—The term ‘applicable retire6 ment savings vehicle’ means— 

7 ‘‘(A) an account or plan elected by the eli8 gible individual under paragraph (2), or 

9 ‘‘(B) if no such election is made or the 

10 Secretary is not able to make a contribution 

11 into the account or plan selected by the eligible 

12 individual, an account established for the ben13 efit of the eligible individual under the R-Bond 

14 Program. 

15 For purposes of subparagraph (B), if no account has 

16 previously been established for the benefit of the in17 dividual under the R-Bond Program, the Secretary 

18 shall establish such an account for such individual 

19 for purposes of contributions under this section. 

20 ‘‘(2) OTHER RETIREMENT VEHICLES.—An eligi21 ble individual may elect to have the amount deter22 mined under subsection (a) contributed to an ac23 count or plan which— 

24 ‘‘(A) is a Roth IRA or a designated Roth 

25 account (within the meaning of section 402A) 


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1 of an applicable retirement plan (as defined in 

2 section 402A(e)(1)), 

3 ‘‘(B) is for the benefit of the eligible indi4 vidual, 

5 ‘‘(C) accepts contributions made under this 

6 section, and 

7 ‘‘(D) is designated by such individual (in 

8 such form and manner as the Secretary may 

9 provide) on the return of tax for the taxable 

10 year. 

11 In the case of a plan of which a qualified trust 

12 under section 401(a) is a part, an annuity contract 

13 described in section 403(b), or a plan described in 

14 section 457(b) which is established and maintained 

15 by an employer described in section 457(e)(1)(A), 

16 amounts under this section may only be contributed 

17 to such plan if the plan document permits such con18 tribution. 

19 ‘‘(f) OTHER DEFINITIONS AND SPECIAL RULES.— 

20 ‘‘(1) MODIFIED ADJUSTED GROSS INCOME.— 

21 For purposes of this section, the term ‘modified ad22 justed gross income’ means adjusted gross income— 

23 ‘‘(A) determined without regard to sections 

24 911, 931, and 933, and 


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1 ‘‘(B) determined without regard to any ex2 clusion or deduction allowed for any qualified 

3 retirement savings contribution made during 

4 the taxable year. 

5 ‘‘(2) TREATMENT OF CONTRIBUTIONS.—In the 

6 case of any contribution under subsection (a)(2)— 

7 ‘‘(A) except as otherwise provided in this 

8 section or by the Secretary under regulations, 

9 such contribution shall be treated as— 

10 ‘‘(i) an elective deferral made by the 

11 individual which is a designated Roth con12 tribution, if contributed to an applicable 

13 retirement plan, or 

14 ‘‘(ii) as a Roth IRA contribution made 

15 by such individual, if contributed to a Roth 

16 IRA, 

17 ‘‘(B) such contribution shall not be treated 

18 as income to the taxpayer, and 

19 ‘‘(C) such contribution shall not be taken 

20 into account with respect to any applicable limi21 tation under sections 402(g)(1), 403(b), 

22 408(a)(1), 408(b)(2)(B), 408A(c)(2), 414(v)(2), 

23 415(c), or 457(b)(2), and shall be disregarded 

24 for purposes of sections 401(a)(4), 401(k)(3), 

25 401(k)(11)(B)(i)(III), and 416. 


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1 ‘‘(3) TREATMENT OF QUALIFIED PLANS, ETC.— 

2 A plan or arrangement to which a contribution is 

3 made under this section shall not be treated as vio4 lating any requirement under section 401, 403, 408, 

5 or 457 solely by reason of accepting such contribu6 tion. 

7 ‘‘(4) ERRONEOUS CREDITS.—If any contribu8 tion is erroneously paid under subsection (a)(2), the 

9 amount of such erroneous payment shall be treated 

10 as an underpayment of tax. 

11 ‘‘(g) INFLATION ADJUSTMENTS.— 

12 ‘‘(1) IN GENERAL.—In the case of any taxable 

13 year beginning in a calendar year after 2020, each 

14 of the dollar amounts in subsections (a)(1) and 

15 (b)(3)(A)(i) shall be increased by an amount equal 

16 to— 

17 ‘‘(A) such dollar amount, multiplied by 

18 ‘‘(B) the cost-of-living adjustment deter19 mined under section 1(f)(3) for the calendar 

20 year in which the taxable year begins, deter21 mined by substituting ‘calendar year 2019’ for 

22 ‘calendar year 2016’ in subparagraph (A)(ii) 

23 thereof. 


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1 ‘‘(2) ROUNDING.—Any increase determined 

2 under paragraph (1) shall be rounded to the nearest 

3 multiple of— 

4 ‘‘(A) $100 in the case of an adjustment of 

5 the amount in subsection (a)(1), and 

6 ‘‘(B) $1,000 in the case of an adjustment 

7 of the amount in subsection (b)(3)(A)(i).’’. 

8 (b) PAYMENT AUTHORITY.—Section 1324(b)(2) of 

9 title 31, United States Code, is amended by striking ‘‘or 

10 6431’’ and inserting ‘‘6431, or 6433’’. 

11 (c) DEFICIENCIES.—Section 6211(b)(4) is amended 

12 by striking ‘‘and 6431’’ and inserting ‘‘6431, and 6433’’. 

13 (d) REPORTING.—The Secretary of Labor, the Sec14 retary of the Treasury, and the Director of the Pension 

15 Benefit Guaranty Corporation shall— 

16 (1) amend Form 5500 to require separate re17 porting of the aggregate amount of contributions re18 ceived by the plan during the year under section 

19 6433 of the Internal Revenue Code of 1986 (as 

20 added by this section), and 

21 (2) amend Form 5498 to require similar report22 ing with respect to individual retirement plans (as 

23 defined in section 7701(a)(37) of such Code). 

24 (e) CONFORMING AMENDMENTS.— 


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1 (1) Section 25B of the Internal Revenue Code 

2 of 1986 is amended by striking subsections (a) 

3 through (f) and inserting the following: 

4 ‘‘For payment of credit related to qualified retirement sav5 ings contributions, see section 6433.’’. 

6 (2) The table of sections for subchapter B of 

7 chapter 65 of such Code is amended by adding at 

8 the end the following new item: 

‘‘Sec. 6433. Matching payments for elective deferral and IRA contributions by 

certain individuals.’’. 

9 (f) EFFECTIVE DATE.—The amendments made by 

10 this section shall apply to taxable years beginning after 

11 December 31, 2021. 

12 (g) CORONAVIRUS RECOVERY BONUS CREDIT.— 

13 (1) IN GENERAL.—In the case of taxable years 

14 beginning after December 31, 2021, and before Jan15 uary 1, 2027, the amount of the credit determined 

16 under section 6433 of the Internal Revenue Code of 

17 1986, as added by this section, shall be increased by 

18 an amount equal to 50 percent of so much of the 

19 qualified retirement savings contributions made by 

20 an eligible individual for the taxable year as does not 

21 exceed— 

22 (A) $10,000, reduced by 

23 (B) the aggregate amount of qualified re24 tirement savings contributions made by the eliVerDate Sep 11 2014 21:32 Dec 29, 2020 Jkt 019200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\S5035.IS S5035

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1 gible individual in all preceding taxable years 

2 which begin after December 31, 2021. 

3 (2) DEFINITIONS.—For purposes of this sub4 section, the terms ‘‘qualified retirement savings con5 tributions’’ and ‘‘eligible individual’’ have the mean6 ings given such terms by subsections (d) and (c), re7 spectively, of section 6433 of such Code, as so 

8 added. 

9 SEC. 3. ESTABLISHMENT OF R-BOND PROGRAM. 

10 (a) IN GENERAL.—The Secretary of the Treasury 

11 shall, not later than December 31, 2022, establish a per12 manent program, to be known as the ‘‘R-Bond Program’’, 

13 which meets the requirements of this section to establish 

14 and maintain a Roth IRA on behalf of individuals. 

15 (b) PROGRAM SPECIFICATIONS.— 

16 (1) IN GENERAL.— 

17 (A) ROTH IRAS.—The R-Bond Program 

18 established under this section shall— 

19 (i) permit an individual to establish a 

20 Roth IRA which satisfies the requirements 

21 of section 408A of the Internal Revenue 

22 Code of 1986 on behalf of the individual; 

23 (ii) permit an employer to establish 

24 such a Roth IRA on behalf of 1 or more 

25 employees of such employer; 


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1 (iii) require the assets of each Roth 

2 IRA established under the program to be 

3 held by the designated Roth IRA custo4 dian; 

5 (iv) permit contributions to be made 

6 periodically to such Roth IRAs by direct 

7 deposit or other electronic means and by 

8 methods that provide access for the 

9 unbanked; 

10 (v) permit distributions and rollovers 

11 from such Roth IRAs upon request of the 

12 account owner; 

13 (vi) include procedures to consolidate 

14 multiple accounts established for the same 

15 individual; and 

16 (vii) ensure that such Roth IRAs are 

17 invested solely in retirement savings bonds 

18 issued by the Department of the Treasury 

19 for the purpose of the R-Bond Program. 

20 (B) REGULATIONS, ETC.—The Secretary 

21 of the Treasury shall have authority to promul22 gate such regulations, rules, and other guidance 

23 as are necessary to implement the R-Bond Pro24 gram, and are consistent with this section, as 

25 well as coordination rules permitting Roth IRAs 


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1 to be established under the R-Bond Program in 

2 connection with State and local laws that enroll 

3 residents in Roth IRAs. 

4 (2) NO FEES.—No fees shall be assessed on 

5 participants in the R-Bond Program. 

6 (3) LIMITATIONS.— 

7 (A) CONTRIBUTION MINIMUM.—The Sec8 retary of the Treasury may establish minimum 

9 amounts for initial and additional contributions 

10 to a Roth IRA under the R-Bond Program, not 

11 to exceed $5. 

12 (B) ROLLOVER CONTRIBUTIONS NOT PER13 MITTED.—No rollover contribution shall be ac14 cepted to a Roth IRA under the R-Bond Pro15 gram. 

16 (C) ACCOUNT MAXIMUM.—No contribu17 tions (other than a contribution made under 

18 section 6433(a)(2) of the Internal Revenue 

19 Code of 1986, as added by this Act) shall be 

20 credited to a Roth IRA under the R-Bond Pro21 gram after the account balance of such Roth 

22 IRA reaches $15,000. 

23 (D) LIMITATION ON PARTICIPATION.— 

24 Within a reasonable amount of time after the 

25 earlier of— 


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1 (i) the date the account balance of a 

2 Roth IRA under the R-Bond Program 

3 reaches $15,000; or 

4 (ii) the earlier of— 

5 (I) the date that the participant 

6 has been a participant in the R-Bond 

7 Program for 30 years; or 

8 (II) the date that the participant 

reaches age 591 9 ⁄2, 

10 the designated Roth IRA custodian shall pro11 vide notice to the participant that no further 

12 contributions will be accepted and that the par13 ticipant may elect to have the account balance 

14 rolled over to another Roth IRA according to 

15 the rules relating to rollovers and transfers of 

16 Roth IRAs under the Internal Revenue Code of 

17 1986. 

18 (E) ADJUSTMENT FOR INFLATION.— 

19 (i) IN GENERAL.—In the case of any 

20 calendar year after 2023, the $15,000 

21 amount in subparagraphs (C) and (D) and 

22 subsection (c)(3)(B) shall be increased by 

23 an amount equal to— 

24 (I) such dollar amount, multi25 plied by 


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1 (II) the cost-of-living adjustment 

2 determined under section 1(f)(3) of 

3 the Internal Revenue Code of 1986 

4 for the calendar year, determined by 

5 substituting ‘‘calendar year 2022’’ for 

6 ‘‘calendar year 2016’’ in subpara7 graph (A)(ii) thereof. 

8 (ii) ROUNDING.—If any increase de9 termined under clause (i) is not a multiple 

10 of $50, such increase shall be rounded to 

11 the next lowest multiple of $50. 

12 (4) DESIGNATED ROTH IRA CUSTODIAN.—For 

13 purposes of this section, the designated Roth IRA 

14 custodian is the person designated by the Secretary 

15 of the Treasury to act as custodian of the Roth 

16 IRAs established on behalf of participants in the re17 tirement savings program of such Department. 

18 (c) RETIREMENT SAVINGS BONDS.—For purposes of 

19 this section— 

20 (1) IN GENERAL.—The term ‘‘retirement sav21 ings bond’’ means an interest-bearing electronic 

22 United States savings bond issued to the designated 

23 Roth IRA custodian which is available only to par24 ticipants in the R-Bond Program. 


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1 (2) INTEREST RATE.—Bonds issued under the 

2 R-Bond Program shall earn interest at a rate equal 

3 to the greater of (determined on the issue date)— 

4 (A) the rate earned by the Government Se5 curities Investment Fund established under sec6 tion 8438(b)(1) of title 5, United States Code; 

7 or 

8 (B) a Series I United States savings bond. 

9 (3) BONDS TO BE CREDITED TO SINGLE AC10 COUNT.—Each retirement savings bond issued to the 

11 designated Roth IRA custodian shall be credited to 

12 a single Roth IRA established through the R-Bond 

13 Program on behalf of a participant. 

14 (4) REISSUE IN CASE OF CHANGE IN CUSTO15 DIAN.—If a successor designated Roth IRA custo16 dian is designated under subsection (b)(4), the re17 tirement savings bonds issued to the predecessor 

18 designated Roth IRA custodian shall be reissued to 

19 such successor. 

20 (d) ROTH IRA.—For purposes of this section, the 

21 term ‘‘Roth IRA’’ has the meaning given such term by 

22 section 408A(b) of the Internal Revenue Code of 1986. 

23 SEC. 4. PROMOTION AND GUIDANCE. 

24 (a) PROMOTION.—The Secretary of the Treasury (or 

25 the Secretary’s delegate) shall educate taxpayers on the 


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1 benefits provided under section 6433 of the Internal Rev2 enue Code of 1986 and the R-Bond Program established 

3 under section 3 of this Act. 

4 (b) GUIDANCE.—Not later than December 31, 2021, 

5 the Secretary of the Treasury (or the Secretary’s delegate) 

6 shall issue guidance on the implementation and adminis7 tration of the amendments made by section 2 of this Act. 

Æ 


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