I 

113TH CONGRESS 

2D SESSION H. R. 5281 

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

savings accounts for individuals under age 18, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 30, 2014 

Mr. HANNA (for himself and Mr. KIND) 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 18, 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 ‘‘Young Savers Security 

5 in Retirement Act of 2014’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 

8 (1) Studies indicate that children as young as 

9 3 years old are able to grasp financial concepts and 


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1 that basic financial habits are largely formulated by 

2 age 7. 

3 (2) Research shows that children born to low4 income parents who are good financial savers are 

5 more likely to move up the economic ladder than 

6 children from low-income households that do not 

7 save. According to a 2011 study controlled for in8 come and demographic factors, youth who own fi9 nancial accounts are 7 times more likely to attend 

10 college. 

11 (3) If tax-advantaged retirement accounts such 

12 as Roth IRAs could be opened for children between 

13 the ages of zero and 18, these individuals are likely 

14 to acquire substantially more tax-free assets by re15 tirement age than their peers. 

16 (4) Children who possess retirement accounts 

17 from a young age will benefit from longer exposure 

18 to compound interest and can be expected to attain 

19 higher levels of financial literacy, college graduation 

20 and retirement security in adulthood. 

21 (5) Greater private retirement savings for 

22 Americans of all ages will increase personal financial 

23 security and responsibility, reducing the likelihood 

24 that seniors will need to rely solely on Social Secu25 rity for their retirement income. 


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1 (6) Federal policy should better enable parents, 

2 guardians and families of all income levels to encour3 age youth saving and investment for retirement at 

4 an earlier age. 

5 (7) Federal policy should help create retirement 

6 savings incentives for low-income Americans because 

7 studies show that low-income Americans will save 

8 more for retirement if there are incentives and 

9 structures in place to help them do so. A refundable 

10 incentive like the Saver’s Credit would reach 50 mil11 lion low-income households—nearly 10 times the 

12 number a non-refundable credit reaches. 

13 SEC. 3. YOUNG SAVERS ACCOUNT. 

14 (a) ESTABLISHMENT OF ACCOUNTS.— 

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

16 Revenue Code of 1986 is amended by adding at the 

17 end the following new subsection: 

18 ‘‘(g) YOUNG SAVERS ACCOUNT.— 

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

20 subsection, a young savers account shall be treated 

21 in the same manner as a Roth IRA. 

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

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

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

25 which is maintained on behalf of an individual who 


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1 has not attained age 18 before the close of the tax2 able year and which is designated (in such manner 

3 as the Secretary may prescribe) at the time of estab4 lishment as a young savers account. 

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

6 any contributions for any taxable year to 1 or more 

7 young savers accounts maintained on behalf of an 

8 individual, each of the following contribution limits 

9 for the taxable year shall be increased as follows: 

10 ‘‘(A) The contribution limit applicable to 

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

12 increased by the aggregate amount of qualified 

13 young saver contributions to such accounts for 

14 the taxable year. 

15 ‘‘(B) The contribution limits applicable to 

16 the young savers accounts under subsection 

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

18 applicable, shall be increased by the deductible 

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

20 such taxable year (determined without regard to 

21 subparagraph (B) thereof). 

22 ‘‘(4) QUALIFIED YOUNG SAVER CONTRIBU23 TIONS.—For purposes of this subsection— 

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

25 young saver contribution’ means a contribution 


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1 by an individual (with respect to whom a young 

2 savers account is not maintained during the 

3 taxable year) to a young savers account main4 tained on behalf of another individual. 

5 ‘‘(B) LIMITATIONS.— 

6 ‘‘(i) LIMIT ON ACCOUNTS WITH RE7 SPECT TO INDIVIDUAL.—The aggregate 

8 amount of contributions which may be 

9 made for any taxable year to all young sav10 ers accounts maintained on behalf of an in11 dividual shall not exceed the deductible 

12 amount in effect for the taxable year under 

13 section 219(b)(5) (determined without re14 gard to subparagraph (B) thereof). 

15 ‘‘(ii) LIMIT ON CONTRIBUTORS.—The 

16 aggregate amount of qualified young saver 

17 contributions an individual may make for 

18 any taxable year to all young savers ac19 counts shall not exceed the deductible 

20 amount in effect for the taxable year under 

21 section 219(b)(5) (determined without re22 gard to subparagraph (B) thereof), re23 duced by any contributions made by or on 

24 behalf of the individual to any Roth IRA 

25 maintained on behalf of the individual.’’. 


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1 (b) ELIGIBLE FOR SAVERS CREDIT.—Paragraph (1) 

2 of section 25B(d) of such Code is amended by striking 

3 ‘‘and’’ at the end of subparagraph (B)(ii), by striking the 

4 period at the end of subparagraph (C) and inserting ‘‘, 

5 and’’, and by adding at the end the following new subpara6 graph: 

7 ‘‘(D) the amount of any contribution to a 

8 young savers account.’’. 

9 (c) REFUND PAYABLE TO YOUNG SAVERS AC10 COUNT.— 

11 (1) IN GENERAL.—Subchapter B of chapter 65 

12 of the Internal Revenue Code of 1986 is amended by 

13 adding at the end the following new section: 

14 ‘‘SEC. 6433. YOUNG SAVERS ACCOUNT REFUND PAYMENT. 

15 ‘‘In the case of any overpayment (or portion thereof) 

16 which is attributable to a credit allowed to an individual 

17 under section 25B by reason of a contribution to a young 

18 savers account, the Secretary shall pay the amount of such 

19 overpayment (or such portion) into the young savers ac20 count to which such contribution was made. The Secretary 

21 shall prescribe such regulations as may be necessary to 

22 carry out the purposes of this section.’’. 

23 (2) CLERICAL AMENDMENT.—The table of sec24 tions for subchapter B of chapter 65 of such Code 


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1 is amended by adding at the end the following new 

2 item: 

‘‘Sec. 6433. Young savers account refund payment.’’. 

3 (d) YOUNG SAVERS ACCOUNT INFORMATION IN4 CLUDED WITH APPLICATION FOR SOCIAL SECURITY

5 CARD.—The Commissioner of Social Security, in consulta6 tion with the Secretary of the Treasury, shall include with 

7 materials relating to the application for a social security 

8 card information describing young savers accounts (as de9 fined in section 408A(g)(2) of the Internal Revenue Code 

10 of 1986) and related tax benefits. 

11 (e) ACCOUNT FUNDS DISREGARDED FOR PURPOSES

12 OF ALL MEANS TESTED FEDERAL PROGRAMS.—Notwith13 standing any other provision of Federal law, assets accu14 mulated in young savers accounts (within the meaning of 

15 section 408A(g) of the Internal Revenue Code of 1986) 

16 shall not be taken into account in determining any individ17 ual’s or household’s financial eligibility for, or amount of, 

18 any benefit or service, paid for in whole or in part with 

19 Federal funds, including student financial aid. 

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

21 this section shall apply to taxable years beginning after 

22 December 31, 2013. 

Æ 


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