I 

110TH CONGRESS 

2D SESSION H. R. 5497 

To amend the Internal Revenue Code of 1986 to provide for tax preferred 

savings accounts for individuals under age 26, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 26, 2008 

Mr. MURTHA 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 

for tax preferred savings accounts for individuals under 

age 26, and for other purposes. 

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 ‘‘Kids IRA Act of 2008 

5 (K–IRA)’’. 

6 SEC. 2. YOUNG SAVERS ACCOUNT. 

7 (a) ESTABLISHMENT OF ACCOUNTS.— 

8 (1) IN GENERAL.—Section 408A of the Internal 

9 Revenue Code of 1986 (relating to Roth IRAs) is 


rwilkins on PROD1PC63 with BILLS
2 

•HR 5497 IH

1 amended by adding at the end the following new 

2 subsection: 

3 ‘‘(g) YOUNG SAVERS ACCOUNT.— 

4 ‘‘(1) IN GENERAL.—Except as provided in this 

5 subsection, a young savers account shall be treated 

6 in the same manner as a Roth IRA. 

7 ‘‘(2) YOUNG SAVERS ACCOUNT.—For purposes 

8 of this subsection, the term ‘young savers account’ 

9 means, with respect to any taxable year, a Roth IRA 

10 which is established and maintained on behalf of an 

11 individual who has not attained age 26 before the 

12 close of the taxable year. 

13 ‘‘(3) CONTRIBUTION LIMITS.—In the case of 

14 any contributions for any taxable year to 1 or more 

15 young savers accounts established and maintained 

16 on behalf of an individual, each of the following con17 tribution limits for the taxable year shall be in18 creased as follows: 

19 ‘‘(A) The contribution limit applicable to 

20 the individual under subsection (c)(2) shall be 

21 increased by the aggregate amount of qualified 

22 young saver contributions to such accounts for 

23 the taxable year. 

24 ‘‘(B) The contribution limits applicable to 

25 the young savers accounts under subsection 


rwilkins on PROD1PC63 with BILLS
3 

•HR 5497 IH

1 (a)(1) or (b)(2)(B) of section 408, whichever is 

2 applicable, shall be increased by the deductible 

3 amount in effect under section 219(b)(5) for 

4 such taxable year (determined without regard to 

5 subparagraph (B) thereof). 

6 ‘‘(4) QUALIFIED CONTRIBUTIONS.—For pur7 poses of this subsection— 

8 ‘‘(A) IN GENERAL.—The term ‘qualified 

9 young saver contribution’ means a contribution 

10 by an individual (with respect to whom a young 

11 savers account is not established and main12 tained during the taxable year) to a young sav13 ers account established and maintained on be14 half of another individual. 

15 ‘‘(B) LIMITATIONS.— 

16 ‘‘(i) LIMIT ON ACCOUNTS WITH RE17 SPECT TO INDIVIDUAL.—The aggregate 

18 amount of contributions which may be 

19 made for any taxable year to all young sav20 ers accounts established and maintained on 

21 behalf of an individual shall not exceed the 

22 deductible amount in effect for the taxable 

23 year under section 219(b)(5) (determined 

24 without regard to subparagraph (B) there25 of). 


rwilkins on PROD1PC63 with BILLS
4 

•HR 5497 IH

1 ‘‘(ii) LIMIT ON CONTRIBUTORS.—The 

2 aggregate amount of qualified contribu3 tions an individual may make for any tax4 able year to all young savers accounts shall 

5 not exceed the deductible amount in effect 

6 for the taxable year under section 

7 219(b)(5) (determined without regard to 

8 subparagraph (B) thereof).’’. 

9 (b) PARTIAL DEDUCTIBILITY OF QUALIFIED YOUNG

10 SAVER CONTRIBUTIONS.—Section 219 of such Code (re11 lating to retirement savings) is amended by adding at the 

12 end the following new subsection: 

13 ‘‘(f) QUALIFIED YOUNG SAVER CONTRIBUTIONS.— 

14 ‘‘(1) IN GENERAL.—The amount allowable as a 

15 deduction under this section (determined without re16 gard to this subsection) to any individual for any 

17 taxable year shall be increased by an amount equal 

18 to 20 percent of so much of the qualified young 

19 saver contributions (as defined in section 408A(g)) 

20 made by such individual for such taxable year as 

21 does not exceed $5,000. 

22 ‘‘(2) LIMIT BASED ON MODIFIED ADJUSTED

23 GROSS INCOME.—The amount determined under 

24 paragraph (1) shall be reduced in the same manner 


rwilkins on PROD1PC63 with BILLS
5 

•HR 5497 IH

1 as under section 408A(c)(3)(A), except that the ap2 plicable dollar amount shall be— 

3 ‘‘(A) in the case of a taxpayer filing a joint 

4 return, $315,000, 

5 ‘‘(B) in the case of any other taxpayer 

6 (other than a married individual filing a sepa7 rate return), $200,000, and 

8 ‘‘(C) in the case of a married individual fil9 ing a separate return, zero. 

10 ‘‘(3) INFLATION ADJUSTMENT.—In the case of 

11 any taxable year beginning in a calendar year after 

12 2009, the dollar amounts in subparagraphs (A) and 

13 (B) of paragraph (2) shall each be increased by an 

14 amount equal to— 

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

16 ‘‘(B) the cost-of-living adjustment deter17 mined under section 1(f)(3) for the calendar 

18 year in which the taxable year begins, deter19 mined by substituting ‘calendar year 2008’ for 

20 ‘calendar year 1992’ in subparagraph (B) 

21 thereof. 

22 Any increase determined under the preceding sen23 tence shall be rounded to the nearest multiple of 

24 $1,000.’’. 


rwilkins on PROD1PC63 with BILLS
6 

•HR 5497 IH

1 (c) CONFORMING AMENDMENT.—Paragraph (1) of 

2 section 408A(c) of such Code (relating to no deduction 

3 allowed) is amended by striking ‘‘No deduction’’ and in4 serting ‘‘Except as provided in section 219(f), no deduc5 tion’’. 

6 (d) EFFECTIVE DATE.—The amendments made by 

7 this section shall apply to taxable years beginning after 

8 December 31, 2008. 

Æ 


rwilkins on PROD1PC63 with BILLS