I 

117TH CONGRESS 

1ST SESSION H. R. 1449 

To amend the Internal Revenue Code of 1986 to provide emergency savings 

accounts for individuals. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 1, 2021 

Mr. CLOUD (for himself, Mrs. HINSON, Mr. LAMALFA, and Mr. OWENS) introduced the following bill; which was referred to the Committee on Ways 

and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

emergency savings accounts for 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 ‘‘Emergency Savings 

5 Accounts Act of 2021’’. 

6 SEC. 2. DEDUCTION FOR CONTRIBUTIONS TO EMERGENCY 

7 SAVINGS ACCOUNTS. 

8 (a) IN GENERAL.—Part VII of subchapter B of chap9 ter 1 of the Internal Revenue Code of 1986 (relating to 

10 additional itemized deductions for individuals) is amended 


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1 by redesignating section 224 as section 225 and by insert2 ing after section 223 the following new section: 

3 ‘‘SEC. 224. EMERGENCY SAVINGS ACCOUNTS. 

4 ‘‘(a) DEDUCTION ALLOWED.—In the case of a eligi5 ble individual, there shall be allowed as a deduction for 

6 the taxable year an amount equal to the aggregate amount 

7 paid during such taxable year by or on behalf of such indi8 vidual to an emergency savings account of such individual. 

9 ‘‘(b) LIMITATION.— 

10 ‘‘(1) IN GENERAL.—The amount allowed as a 

11 deduction under subsection (a) to an individual for 

12 the taxable year shall not exceed $5,000. 

13 ‘‘(2) PARTIAL YEAR OF ELIGIBILITY.—In the 

14 case of an individual who is an eligible individual for 

15 only a portion of the taxable year, the limitation 

16 under paragraph (1) shall be same proportion of 

17 $5,000 as such portion bears to the entire taxable 

18 year. 

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

20 section, the term ‘eligible individual’ means any individual 

21 if such individual occupied any residence in the United 

22 States at any time during the taxable year. 

23 ‘‘(d) EMERGENCY SAVINGS ACCOUNT.—For purposes 

24 of this section— 


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1 ‘‘(1) IN GENERAL.—The term ‘emergency sav2 ings account’ means a trust created or organized in 

3 the United States as an emergency savings account 

4 exclusively for the purpose of paying the qualified 

5 disaster and public health emergency expenses of the 

6 account beneficiary, but only if the written governing 

7 instrument creating the trust meets the following re8 quirements: 

9 ‘‘(A) Except in the case of a rollover con10 tribution described in subsection (f)(5), no con11 tribution will be accepted— 

12 ‘‘(i) unless it is in cash, or 

13 ‘‘(ii) to the extent such contribution, 

14 when added to previous contributions to 

15 the trust for the calendar year, exceeds the 

16 dollar limitation in effect under subsection 

17 (b). 

18 ‘‘(B) The trustee is a bank (as defined in 

19 section 408(n)), an insurance company (as de20 fined in section 816), or another person who 

21 demonstrates to the satisfaction of the Sec22 retary that the manner in which such person 

23 will administer the trust will be consistent with 

24 the requirements of this section. 


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1 ‘‘(C) No part of the trust assets will be in2 vested in life insurance contracts. 

3 ‘‘(D) The assets of the trust will not be 

4 commingled with other property except in a 

5 common trust fund or common investment 

6 fund. 

7 ‘‘(E) The interest of an individual in the 

8 balance in his account is nonforfeitable. 

9 ‘‘(2) QUALIFIED DISASTER AND PUBLIC

10 HEALTH EMERGENCY EXPENSES.—The term ‘quali11 fied disaster and public health emergency expenses’ 

12 means— 

13 ‘‘(A) disaster mitigation expenses, 

14 ‘‘(B) disaster recovery expenses, 

15 ‘‘(C) public health emergency expenses, 

16 and 

17 ‘‘(D) unemployment related expenses. 

18 ‘‘(3) DISASTER MITIGATION EXPENSES.—The 

19 term ‘disaster mitigation expenses’ means expenses 

20 for any of the following with respect to the residence 

21 referred to in subsection (c): 

22 ‘‘(A) Tornado safe rooms manufactured or 

23 constructed in accordance with FEMA 320 or 

24 FEMA 361 guidance or tornado shelters manu25 factured or constructed in accordance with the 


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1 National Storm Shelter/International Code 

2 Council 500 standard. 

3 ‘‘(B) Opening protection, including impact 

4 and wind resistant windows, exterior doors, and 

5 garage doors. 

6 ‘‘(C) Reinforcement of roof-to-wall and 

7 floor-to-wall connections for wind or seismic ac8 tivity. 

9 ‘‘(D) Roof covering for impact, fire, or 

10 high wind resistance. 

11 ‘‘(E) Cripple and shear walls to resist seis12 mic activity. 

13 ‘‘(F) Flood resistant building materials. 

14 ‘‘(G) Elevating structures and utilities 

15 above base flood elevation. 

16 ‘‘(H) Fire resistant exterior wall assem17 blies/systems. 

18 ‘‘(I) Lightning protection systems. 

19 ‘‘(J) Whole home standby generators. 

20 ‘‘(K) Any activity specified by the Sec21 retary as appropriate to mitigate the risks of 

22 future hazards (including earthquake, flood, 

23 hail, hurricane, sinkhole, lightning, power out24 age, tornado, and wildfire) and other natural 

25 disasters. 


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1 ‘‘(4) DISASTER RECOVERY EXPENSES.—The 

2 term ‘disaster recovery expenses’ means with respect 

3 to the residence referred to in subsection (c) any ex4 pense incurred to replace or repair disaster-related 

5 uninsured personal casualty personal losses totaling 

6 $1,000 or greater. 

7 ‘‘(5) DISASTER-RELATED UNINSURED PER8 SONAL CASUALTY LOSS.—The term ‘disaster-related 

9 uninsured personal casualty loss’ means a personal 

10 casualty loss (as defined in section 165(h)(3)(B), de11 termined without regard to the second sentence 

12 thereof) attributable to a State or federally declared 

13 disaster for which a deduction is allowable under 

14 section 165 (without regard to subsection (h)(1)). 

15 ‘‘(6) FEDERALLY DECLARED DISASTER.—The 

16 term ‘federally declared disaster’ has the meaning 

17 given such term by section 165(i)(5). 

18 ‘‘(7) PUBLIC HEALTH EMERGENCY EX19 PENSES.—The term ‘public health emergency ex20 penses’ means expenses for any of the following with 

21 respect to an individual referred to in subsection (c) 

22 if paid or incurred while a public health emergency 

23 declaration is in effect and while such individual is 

24 unemployed or has their employment status reduced 

25 from full-time status: 


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1 ‘‘(A) Child care expenses. 

2 ‘‘(B) Out-of-pocket health care costs, in3 cluding insurance premiums. 

4 ‘‘(C) Housing expenses including mort5 gage, rent, or property taxes. 

6 ‘‘(D) Utilities. 

7 ‘‘(8) PUBLIC HEALTH EMERGENCY DECLARA8 TION.—The term ‘public health emergency declara9 tion’ means any declaration of a public health emer10 gency by the Secretary of Health and Human Serv11 ices under section 319 of the Public Health Service 

12 Act (42 U.S.C. 247d). 

13 ‘‘(9) UNEMPLOYMENT RELATED EXPENSES.— 

14 The term ‘unemployment related expenses’ means, in 

15 the case of an account beneficiary with any period 

16 of unemployment during the taxable year, any ex17 penses during such taxable year which, in the aggre18 gate, do not exceed $500. 

19 ‘‘(10) ACCOUNT BENEFICIARY.—The term ‘ac20 count beneficiary’ means the individual on whose be21 half the emergency savings account was established. 

22 ‘‘(e) TREATMENT OF ACCOUNT.— 

23 ‘‘(1) IN GENERAL.—An emergency savings ac24 count is exempt from taxation under this subtitle 

25 unless such account has ceased to be an emergency 


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1 savings account. Notwithstanding the preceding sen2 tence, any such account is subject to the taxes im3 posed by section 511 (relating to imposition of tax 

4 on unrelated business income of charitable, etc. or5 ganizations). 

6 ‘‘(2) ACCOUNT TERMINATIONS.—Rules similar 

7 to the rules of paragraphs (2) and (4) of section 

8 408(e) shall apply to emergency savings accounts, 

9 and any amount treated as distributed under such 

10 rules shall be treated as not used to pay qualified 

11 disaster and public health emergency expenses. 

12 ‘‘(f) TAX TREATMENT OF DISTRIBUTIONS.— 

13 ‘‘(1) AMOUNTS USED FOR QUALIFIED DISASTER

14 AND PUBLIC HEALTH EMERGENCY EXPENSES.—Any 

15 amount paid or distributed out of an emergency sav16 ings account which is used exclusively to pay quali17 fied disaster and public health emergency expenses 

18 of any account beneficiary shall not be includible in 

19 gross income. 

20 ‘‘(2) INCLUSION OF AMOUNTS NOT USED FOR

21 QUALIFIED DISASTER AND PUBLIC HEALTH EMER22 GENCY EXPENSES.—Any amount paid or distributed 

23 out of an emergency savings account which is not 

24 used exclusively to pay the qualified disaster and 

25 public health emergency expenses of the account 


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1 beneficiary shall be included in the gross income of 

2 such beneficiary. 

3 ‘‘(3) EXCESS CONTRIBUTIONS RETURNED BE4 FORE DUE DATE OF RETURN.— 

5 ‘‘(A) IN GENERAL.—If any excess con6 tribution is contributed for a taxable year to 

7 any emergency savings account of an individual, 

8 paragraph (2) shall not apply to distributions 

9 from the emergency savings accounts of such 

10 individual (to the extent such distributions do 

11 not exceed the aggregate excess contributions to 

12 all such accounts of such individual for such 

13 year) if— 

14 ‘‘(i) such distribution is received by 

15 the individual on or before the last day 

16 prescribed by law (including extensions of 

17 time) for filing such individual’s return for 

18 such taxable year, and 

19 ‘‘(ii) such distribution is accompanied 

20 by the amount of net income attributable 

21 to such excess contribution. 

22 Any net income described in clause (ii) shall be 

23 included in the gross income of the individual 

24 for the taxable year in which it is received. 


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1 ‘‘(B) EXCESS CONTRIBUTION.—For pur2 poses of subparagraph (A), the term ‘excess 

3 contribution’ means any contribution (other 

4 than a rollover contribution described in para5 graph (5)) which is not deductible under this 

6 section. 

7 ‘‘(4) ADDITIONAL TAX ON DISTRIBUTIONS NOT

8 USED FOR QUALIFIED DISASTER AND PUBLIC

9 HEALTH EMERGENCY EXPENSES.— 

10 ‘‘(A) IN GENERAL.—The tax imposed by 

11 this chapter on the account beneficiary for any 

12 taxable year in which there is a payment or dis13 tribution from an emergency savings account of 

14 such beneficiary which is includible in gross in15 come under paragraph (2) shall be increased by 

16 20 percent of the amount which is so includible. 

17 ‘‘(B) EXCEPTION FOR DISABILITY OR

18 DEATH.—Subparagraph (A) shall not apply if 

19 the payment or distribution is made after the 

20 account beneficiary becomes disabled within the 

21 meaning of section 72(m)(7) or dies. 

22 ‘‘(5) ROLLOVER CONTRIBUTION.—An amount is 

23 described in this paragraph as a rollover contribu24 tion if it meets the requirements of subparagraphs 

25 (A) and (B). 


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1 ‘‘(A) IN GENERAL.—Paragraph (2) shall 

2 not apply to any amount paid or distributed 

3 from an emergency savings account to the ac4 count beneficiary to the extent the amount re5 ceived is paid into an emergency savings ac6 count for the benefit of such beneficiary not 

7 later than the 60th day after the day on which 

8 the beneficiary receives the payment or distribu9 tion. 

10 ‘‘(B) LIMITATION.—This paragraph shall 

11 not apply to any amount described in subpara12 graph (A) received by an individual from an 

13 emergency savings account if, at any time dur14 ing the 1-year period ending on the day of such 

15 receipt, such individual received any other 

16 amount described in subparagraph (A) from an 

17 emergency savings account which was not in18 cludible in the individual’s gross income because 

19 of the application of this paragraph. 

20 ‘‘(g) COST-OF-LIVING ADJUSTMENT.— 

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

22 year beginning in a calendar year after 2021, each 

23 $5,000 amount in subsection (b) and the $3,000 

24 amount in subsection (d)(4) shall be increased by an 

25 amount equal to— 


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

2 ‘‘(B) the cost-of-living adjustment deter3 mined under section 1(f)(3) for the calendar 

4 year in which such taxable year begins deter5 mined by substituting ‘calendar year 2020’ for 

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

7 thereof. 

8 ‘‘(2) ROUNDING.—If any increase under para9 graph (1) is not a multiple of $50, such increase 

10 shall be rounded to the nearest multiple of $50. 

11 ‘‘(h) SPECIAL RULES.— 

12 ‘‘(1) DENIAL OF DEDUCTION TO DEPEND13 ENTS.—No deduction shall be allowed under this 

14 section to any individual with respect to whom a de15 duction under section 151 is allowable to another 

16 taxpayer for a taxable year beginning in the cal17 endar year in which such individual’s taxable year 

18 begins. 

19 ‘‘(2) TAXABLE YEAR MUST BE FULL TAXABLE

20 YEAR.—Except in the case of a taxable year closed 

21 by reason of the death of the taxpayer, no deduction 

22 shall be allowed under this section in the case of a 

23 taxable year covering a period of less than 12 

24 months. 


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1 ‘‘(3) CERTAIN RULES TO APPLY.—Rules similar 

2 to the following rules shall apply for purposes of this 

3 section: 

4 ‘‘(A) Section 219(d)(2) (relating to no de5 duction for rollovers). 

6 ‘‘(B) Section 219(f)(3) (relating to time 

7 when contributions deemed made). 

8 ‘‘(C) Section 219(f)(5) (relating to em9 ployer payments). 

10 ‘‘(D) Section 408(g) (relating to commu11 nity property laws). 

12 ‘‘(E) Section 408(h) (relating to custodial 

13 accounts). 

14 ‘‘(F) Section 223(f)(7) (relating to transfer 

15 of account incident to divorce). 

16 ‘‘(G) Section 223(f)(8) (relating to treat17 ment after death of account beneficiary). 

18 ‘‘(4) COORDINATION WITH CASUALTY LOSS DE19 DUCTION.—No deduction shall be allowed under sec20 tion 165 for a loss for which a disaster recovery ex21 pense payment is made from an emergency savings 

22 account. 

23 ‘‘(i) REPORTS.—The Secretary may require the trust24 ee of an emergency savings account to make such reports 

25 regarding such account to the Secretary and to the acVerDate Sep 11 2014 05:16 Apr 14, 2021 Jkt 019200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\H1449.IH H1449

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1 count beneficiary with respect to contributions, distribu2 tions, the return of excess contributions, and such other 

3 matters as the Secretary determines appropriate.’’. 

4 (b) DEDUCTION ALLOWED WHETHER OR NOT INDI5 VIDUAL ITEMIZES OTHER DEDUCTIONS.—Section 62(a) 

6 of such Code is amended by inserting after paragraph (21) 

7 the following new paragraph: 

8 ‘‘(22) EMERGENCY SAVINGS ACCOUNTS.—The 

9 deduction allowed by section 224.’’. 

10 (c) TAX ON EXCESS CONTRIBUTIONS.—Section 4973 

11 of such Code (relating to tax on excess contributions to 

12 certain tax-favored accounts and annuities) is amended— 

13 (1) by striking ‘‘or’’ at the end of subsection 

14 (a)(5), by inserting ‘‘or’’ at the end of subsection 

15 (a)(6), and by inserting after subsection (a)(6) the 

16 following new paragraph: 

17 ‘‘(7) an emergency savings account (within the 

18 meaning of section 224(d)),’’; and 

19 (2) by adding at the end the following new sub20 section: 

21 ‘‘(i) EXCESS CONTRIBUTIONS TO EMERGENCY SAV22 INGS ACCOUNTS.—For purposes of this section, in the 

23 case of emergency savings accounts (within the meaning 

24 of section 224(d)), the term ‘excess contributions’ means 

25 the sum of— 


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1 ‘‘(1) the aggregate amount contributed for the 

2 taxable year to the accounts (other than a rollover 

3 contribution described in section 224(f)(5)) which is 

4 not allowable as a deduction under section 224 for 

5 such year, and 

6 ‘‘(2) the amount determined under this sub7 section for the preceding taxable year, reduced by 

8 the sum of— 

9 ‘‘(A) the distributions out of the accounts 

10 which were included in gross income under sec11 tion 224(f)(2), and 

12 ‘‘(B) the excess (if any) of— 

13 ‘‘(i) the maximum amount allowable 

14 as a deduction under section 224(b) for 

15 the taxable year, over 

16 ‘‘(ii) the amount contributed to the 

17 accounts for the taxable year. 

18 For purposes of this subsection, any contribu19 tion which is distributed out of the emergency 

20 savings account in a distribution to which sec21 tion 224(f)(3) applies shall be treated as an 

22 amount not contributed.’’. 

23 (d) FAILURE TO PROVIDE REPORTS ON EMERGENCY

24 SAVINGS ACCOUNTS.—Section 6693(a)(2) of such Code is 

25 amended by redesignating subparagraphs (D), (E), and 


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1 (F) as subparagraphs (E), (F), and (G), respectively, and 

2 by inserting after subparagraph (C) the following new sub3 paragraph: 

4 ‘‘(D) section 224(i) (relating to emergency 

5 savings accounts),’’. 

6 (e) CLERICAL AMENDMENT.—The table of sections 

7 for part VII of subchapter B of chapter 1 of such Code 

8 is amended by striking the last item and inserting the fol9 lowing: 

‘‘Sec. 224. Emergency savings accounts. 

‘‘Sec. 225. Cross reference.’’. 

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

11 this section shall apply to taxable years beginning after 

12 December 31, 2020. 

Æ 


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