I 

108TH CONGRESS 

2D SESSION H. R. 4714 

To amend the Internal Revenue Code of 1986 to provide for retirement 

savings accounts, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 25, 2004 

Mr. SAM JOHNSON of Texas 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 retirement savings accounts, 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, ETC. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Retirement Savings Account Act’’. 

6 (b) AMENDMENT OF 1986 CODE.—Except as other7 wise expressly provided, whenever in this Act an amend8 ment or repeal is expressed in terms of an amendment 

9 to, or repeal of, a section or other provision, the reference 
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1 shall be considered to be made to a section or other provi2 sion of the Internal Revenue Code of 1986. 

3 SEC. 2. RETIREMENT SAVINGS ACCOUNTS. 

4 (a) IN GENERAL.—Section 408A (relating to Roth 

5 IRAs) is amended to read as follows: 

6 ‘‘SEC. 408A. RETIREMENT SAVINGS ACCOUNTS. 

7 ‘‘(a) IN GENERAL.—Except as provided in this sec8 tion, a retirement savings account shall be treated for pur9 poses of this title in the same manner as an individual 

10 retirement plan. 

11 ‘‘(b) RETIREMENT SAVINGS ACCOUNT.—For pur12 poses of this title, the term ‘retirement savings account’ 

13 means an individual retirement plan (as defined in section 

14 7701(a)(37)) which— 

15 ‘‘(1) is designated (in such manner as the Sec16 retary may prescribe) at the time of establishment 

17 of the plan as a retirement savings account, and 

18 ‘‘(2) does not accept any contribution (other 

19 than a qualified rollover contribution) which is not 

20 in cash. 

21 ‘‘(c) TREATMENT OF CONTRIBUTIONS.— 

22 ‘‘(1) CONTRIBUTION LIMIT.—Notwithstanding 

23 subsections (a)(1) and (b)(2)(A) of section 408, the 

24 aggregate amount of contributions for any taxable 

25 year to all retirement savings accounts maintained 
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1 for the benefit of an individual shall not exceed the 

2 lesser of— 

3 ‘‘(A) $5,000, or 

4 ‘‘(B) the amount of compensation includ5 ible in the individual’s gross income for such 

6 taxable year. 

7 ‘‘(2) SPECIAL RULE FOR CERTAIN MARRIED IN8 DIVIDUALS.—In the case of any individual who files 

9 a joint return for the taxable year, the amount taken 

10 into account under paragraph (1)(B) shall be in11 creased by the excess (if any) of— 

12 ‘‘(A) the compensation includible in the 

13 gross income of such individual’s spouse for the 

14 taxable year, over 

15 ‘‘(B) the aggregate amount of contribu16 tions for the taxable year to all retirement sav17 ings accounts maintained for the benefit of such 

18 spouse. 

19 ‘‘(3) CONTRIBUTIONS PERMITTED AFTER AGE

701 20 ⁄2.—Contributions to a retirement savings account 

21 may be made even after the individual for whom the 

account is maintained has attained age 701 22 ⁄2. 

23 ‘‘(4) MANDATORY DISTRIBUTION RULES NOT

24 TO APPLY BEFORE DEATH.—Notwithstanding sub25 sections (a)(6) and (b)(3) of section 408 (relating to 
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1 required distributions), the following provisions shall 

2 not apply to any retirement savings account: 

3 ‘‘(A) Section 401(a)(9)(A). 

4 ‘‘(B) The incidental death benefit require5 ments of section 401(a). 

6 ‘‘(5) ROLLOVER CONTRIBUTIONS.— 

7 ‘‘(A) IN GENERAL.—No rollover contribu8 tion may be made to a retirement savings ac9 count unless it is a qualified rollover contribu10 tion. 

11 ‘‘(B) COORDINATION WITH LIMIT.—A 

12 qualified rollover contribution shall not be taken 

13 into account for purposes of paragraph (1). 

14 ‘‘(6) ROLLOVERS FROM PLANS WITH TAXABLE

15 DISTRIBUTIONS.— 

16 ‘‘(A) IN GENERAL.—Notwithstanding sec17 tions 402(c), 403(a)(4), 403(b)(8), 408(d)(3), 

18 and 457(e)(16), in the case of any contribution 

19 to which this paragraph applies— 

20 ‘‘(i) there shall be included in gross 

21 income any amount which would be includ22 ible were it not part of a qualified rollover 

23 contribution, 

24 ‘‘(ii) section 72(t) shall not apply, and 
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1 ‘‘(iii) unless the taxpayer elects not to 

2 have this clause apply for any taxable year, 

3 any amount required to be included in 

4 gross income for such taxable year by rea5 son of this paragraph for any contribution 

6 before January 1, 2006, shall be so in7 cluded ratably over the 4-taxable year pe8 riod beginning with such taxable year. 

9 Any election under clause (iii) for any contribu10 tions during a taxable year may not be changed 

11 after the due date (including extensions of 

12 time) for filing the taxpayer’s return for such 

13 taxable year. 

14 ‘‘(B) CONTRIBUTIONS TO WHICH PARA15 GRAPH APPLIES.—This paragraph shall apply 

16 to any qualified rollover contribution to a retire17 ment savings account (other than a rollover 

18 contribution from another such account). 

19 ‘‘(C) CONVERSIONS OF IRAS.—The conver20 sion of an individual retirement plan (other 

21 than a retirement savings account) to a retire22 ment savings account shall be treated for pur23 poses of this paragraph as a contribution to 

24 which this paragraph applies. 
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1 ‘‘(D) ADDITIONAL REPORTING REQUIRE2 MENTS.—Trustees and plan administrators of 

3 eligible retirement plans (as defined in section 

4 402(c)(8)(B)) and retirement savings accounts 

5 shall report such information as the Secretary 

6 may require to ensure that amounts required to 

7 be included in gross income under subpara8 graph (A) are so included. Such reports shall be 

9 made at such time and in such form and man10 ner as the Secretary may require. The Sec11 retary may provide that such information be in12 cluded as additional information in reports re13 quired under section 408(i) or 6047. 

14 ‘‘(E) SPECIAL RULES FOR CONTRIBUTIONS

15 TO WHICH A 4-YEAR AVERAGING APPLIES.—In 

16 the case of a qualified rollover contribution to 

17 which subparagraph (A)(iii) applied, the fol18 lowing rules shall apply: 

19 ‘‘(i) ACCELERATION OF INCLUSION.— 

20 ‘‘(I) IN GENERAL.—The amount 

21 required to be included in gross in22 come for each of the first 3 taxable 

23 years in the 4-year period under sub24 paragraph (A)(iii) shall be increased 

25 by the aggregate distributions from 
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1 retirement savings accounts for such 

2 taxable year which are allocable under 

3 subsection (d)(3) to the portion of 

4 such qualified rollover contribution re5 quired to be included in gross income 

6 under subparagraph (A)(i). 

7 ‘‘(II) LIMITATION ON AGGRE8 GATE AMOUNT INCLUDED.—The 

9 amount required to be included in 

10 gross income for any taxable year 

11 under subparagraph (A)(iii) shall not 

12 exceed the aggregate amount required 

13 to be included in gross income under 

14 subparagraph (A)(iii) for all taxable 

15 years in the 4-year period (without re16 gard to subclause (I)) reduced by 

17 amounts included for all preceding 

18 taxable years. 

19 ‘‘(ii) DEATH OF DISTRIBUTEE.— 

20 ‘‘(I) IN GENERAL.—If the indi21 vidual required to include amounts in 

22 gross income under such subpara23 graph dies before all of such amounts 

24 are included, all remaining amounts 

25 shall be included in gross income for 
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1 the taxable year which includes the 

2 date of death. 

3 ‘‘(II) SPECIAL RULE FOR SUR4 VIVING SPOUSE.—If the spouse of the 

5 individual described in subclause (I) 

6 acquires the individual’s entire inter7 est in any retirement savings account 

8 to which such qualified rollover con9 tribution is properly allocable, the 

10 spouse may elect to treat the remain11 ing amounts described in subclause 

12 (I) as includible in the spouse’s gross 

13 income in the taxable years of the 

14 spouse ending with or within the tax15 able years of such individual in which 

16 such amounts would otherwise have 

17 been includible. Any such election may 

18 not be made or changed after the due 

19 date (including extensions of time) for 

20 filing the spouse’s return for the tax21 able year which includes the date of 

22 death. 

23 ‘‘(F) 5-YEAR HOLDING PERIOD RULES.— 

24 If— 
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1 ‘‘(i) any portion of a distribution from 

2 a retirement savings account is properly al3 locable to a qualified rollover contribution 

4 with respect to which an amount is includ5 ible in gross income under subparagraph 

6 (A)(i), 

7 ‘‘(ii) such distribution is made during 

8 the 5-taxable year period beginning with 

9 the taxable year for which such contribu10 tion was made, and 

11 ‘‘(iii) such distribution is not de12 scribed in clause (i), (ii), or (iii) of sub13 section (d)(2)(A), 

14 then section 72(t) shall be applied as if such 

15 portion were includible in gross income. 

16 ‘‘(7) TIME WHEN CONTRIBUTIONS MADE.—For 

17 purposes of this section, a taxpayer shall be deemed 

18 to have made a contribution to a retirement savings 

19 account on the last day of the preceding taxable year 

20 if the contribution is made on account of such tax21 able year and is made not later than the time pre22 scribed by law for filing the return for such taxable 

23 year (not including extensions thereof). 

24 ‘‘(8) COST-OF-LIVING ADJUSTMENT.— 
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1 ‘‘(A) IN GENERAL.—In the case of any 

2 taxable year beginning in a calendar year after 

3 2005, the $5,000 amount under paragraph 

4 (1)(A) shall be increased by an amount equal 

5 to— 

6 ‘‘(i) such dollar amount, multiplied by 

7 ‘‘(ii) the cost-of-living adjustment de8 termined under section 1(f)(3) for the cal9 endar year in which the taxable year be10 gins, determined by substituting ‘calendar 

11 year 2004’ for ‘calendar year 1992’ in sub12 paragraph (B) thereof. 

13 ‘‘(B) ROUNDING RULES.—If any amount 

14 after adjustment under subparagraph (A) is not 

15 a multiple of $500, such amount shall be 

16 rounded to the next lower multiple of $500. 

17 ‘‘(d) DISTRIBUTION RULES.—For purposes of this 

18 title— 

19 ‘‘(1) EXCLUSION.—Any qualified distribution 

20 from a retirement savings account shall not be in21 cludible in gross income. 

22 ‘‘(2) QUALIFIED DISTRIBUTION.—For purposes 

23 of this subsection— 
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1 ‘‘(A) IN GENERAL.—The term ‘qualified 

2 distribution’ means any payment or distribu3 tion— 

4 ‘‘(i) made on or after the date on 

5 which the individual attains age 58, 

6 ‘‘(ii) made to a beneficiary (or to the 

7 estate of the individual) on or after the 

8 death of the individual, 

9 ‘‘(iii) attributable to the individual’s 

10 being disabled (within the meaning of sec11 tion 72(m)(7)), or 

12 ‘‘(iv) to which section 72(t)(2)(F) ap13 plies (if such payment or distribution is 

14 made before January, 1, 2008). 

15 ‘‘(B) DISTRIBUTIONS OF EXCESS CON16 TRIBUTIONS AND EARNINGS.—The term ‘quali17 fied distribution’ shall not include any distribu18 tion of any contribution described in section 

19 408(d)(4) and any net income allocable to the 

20 contribution. 

21 ‘‘(3) ORDERING RULES.—For purposes of ap22 plying this section and section 72 to any distribution 

23 from a retirement savings account, such distribution 

24 shall be treated as made— 
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1 ‘‘(A) from contributions to the extent that 

2 the amount of such distribution, when added to 

3 all previous distributions from the retirement 

4 savings account, does not exceed the aggregate 

5 contributions to the retirement savings account; 

6 and 

7 ‘‘(B) from such contributions in the fol8 lowing order: 

9 ‘‘(i) Contributions other than qualified 

10 rollover contributions with respect to which 

11 an amount is includible in gross income 

12 under subsection (c)(6)(A)(i). 

13 ‘‘(ii) Qualified rollover contributions 

14 with respect to which an amount is includ15 ible in gross income under subsection 

16 (c)(6)(A)(i) on a first-in, first-out basis. 

17 Any distribution allocated to a qualified rollover con18 tribution under subparagraph (B)(ii) shall be allo19 cated first to the portion of such contribution re20 quired to be included in gross income. 

21 ‘‘(4) AGGREGATION RULES.—Section 408(d)(2) 

22 shall be applied separately with respect to retirement 

23 savings accounts and other individual retirement 

24 plans. 

25 ‘‘(e) QUALIFIED ROLLOVER CONTRIBUTION.— 
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1 ‘‘(1) IN GENERAL.—For purposes of this sec2 tion, the term ‘qualified rollover contribution’ 

3 means— 

4 ‘‘(A) a rollover contribution to a retirement 

5 savings account of an individual from another 

6 such account of such individual or such individ7 ual’s spouse, or from an individual retirement 

8 plan of such individual, but only if such rollover 

9 contribution meets the requirements of section 

10 408(d)(3), and 

11 ‘‘(B) a rollover contribution described in 

12 section 402(c), 402A(c)(3)(A), 403(a)(4), 

13 403(b)(8), or 457(e)(16). 

14 ‘‘(2) COORDINATION WITH LIMITATION ON IRA

15 ROLLOVERS.—For purposes of section 408(d)(3)(B), 

16 there shall be disregarded any qualified rollover con17 tribution from an individual retirement plan (other 

18 than a retirement savings account) to a retirement 

19 savings account. 

20 ‘‘(f) INDIVIDUAL RETIREMENT PLAN.—For purposes 

21 of this section— 

22 ‘‘(1) a simplified employee pension or a simple 

23 retirement account may not be designated as a re24 tirement savings account; and 
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1 ‘‘(2) contributions to any such pension or ac2 count shall not be taken into account for purposes 

3 of subsection (c)(1). 

4 ‘‘(g) COMPENSATION.—For purposes of this section, 

5 the term ‘compensation’ includes earned income (as de6 fined in section 401(c)(2)). Such term does not include 

7 any amount received as a pension or annuity and does not 

8 include any amount received as deferred compensation. 

9 Such term shall include any amount includible in the indi10 vidual’s gross income under section 71 with respect to a 

11 divorce or separation instrument described in section 

12 71(b)(2)(A). For purposes of this subsection, section 

13 401(c)(2) shall be applied as if the term trade or business 

14 for purposes of section 1402 included service described in 

15 section 1402(c)(6).’’. 

16 (b) ROTH IRAS TREATED AS RETIREMENT SAVINGS

17 ACCOUNTS.—In the case of any taxable year beginning 

18 after December 31, 2004, any Roth IRA (as defined in 

19 section 408A(b) of the Internal Revenue Code of 1986, 

20 as in effect on the day before the date of the enactment 

21 of this Act) shall be treated for purposes of such Code 

22 as having been designated at the time of the establishment 

23 of the plan as a retirement savings account under section 

24 408A(b) of such Code (as amended by this section). 
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1 (c) CONTRIBUTIONS TO OTHER INDIVIDUAL RETIRE2 MENT PLANS PROHIBITED.— 

3 (1) INDIVIDUAL RETIREMENT ACCOUNTS.— 

4 Paragraph (1) of section 408(a) is amended to read 

5 as follows: 

6 ‘‘(1) Except in the case of a simplified employee 

7 pension, a simple retirement account, or a rollover 

8 contribution described in subsection (d)(3) or in sec9 tion 402(c), 403(a)(4), 403(b)(8), or 457(e)(16), no 

10 contribution will be accepted on behalf of any indi11 vidual for any taxable year beginning after Decem12 ber 31, 2004. In the case of any simplified employee 

13 pension or simple retirement account, no contribu14 tion will be accepted unless it is in cash and con15 tributions will not be accepted for the taxable year 

16 on behalf of any individual in excess of— 

17 ‘‘(A) in the case of a simplified employee 

18 pension, the amount of the limitation in effect 

19 under section 415(c)(1)(A), and 

20 ‘‘(B) in the case of a simple retirement ac21 count, the sum of the dollar amount in effect 

22 under subsection (p)(2)(A)(ii) and the employer 

23 contribution required under subparagraph 

24 (A)(iii) or (B)(i) of subsection (p)(2).’’. 
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1 (2) INDIVIDUAL RETIREMENT ANNUITIES.— 

2 Paragraph (2) of section 408(b) is amended— 

3 (A) by redesignating subparagraphs (A), 

4 (B), and (C) as subparagraphs (B), (C), and 

5 (D), respectively, and by inserting before sub6 paragraph (B), as so redesignated, the following 

7 new subparagraph: 

8 ‘‘(A) except in the case of a simplified em9 ployee pension, a simple retirement account, or 

10 a rollover contribution described in subsection 

11 (d)(3) or in section 402(c), 403(a)(4), 

12 403(b)(8), or 457(e)(16), a premium shall not 

13 be accepted on behalf of any individual for any 

14 taxable year beginning after December 31, 

15 2004,’’, and 

16 (B) by amending subparagraph (C), as re17 designated by subparagraph (A), to read as fol18 lows: 

19 ‘‘(C) the annual premium on behalf of any 

20 individual will not exceed— 

21 ‘‘(i) in the case of a simplified em22 ployee pension, the amount of the limita23 tion in effect under section 415(c)(1)(A), 

24 and 
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1 ‘‘(ii) in the case of a simple retire2 ment account, the sum of the dollar 

3 amount in effect under subsection 

4 (p)(2)(A)(ii) and the employer contribution 

5 required under subparagraph (A)(iii) or 

6 (B)(i) of subsection (p)(2), and’’. 

7 (d) CONFORMING AMENDMENTS.— 

8 (1)(A) Section 219 is amended to read as fol9 lows: 

10 ‘‘SEC. 219. CONTRIBUTIONS TO CERTAIN RETIREMENT 

11 PLANS ALLOWING ONLY EMPLOYEE CON12 TRIBUTIONS. 

13 ‘‘(a) ALLOWANCE OF DEDUCTION.—In the case of an 

14 individual, there shall be allowed as a deduction the 

15 amount contributed on behalf of such individual to a plan 

16 described in section 501(c)(18). 

17 ‘‘(b) MAXIMUM AMOUNT OF DEDUCTION.—The 

18 amount allowable as a deduction under subsection (a) to 

19 any individual for any taxable year shall not exceed the 

20 lesser of— 

21 ‘‘(1) $7,000, or 

22 ‘‘(2) an amount equal to 25 percent of the com23 pensation (as defined in section 415(c)(3)) includible 

24 in the individual’s gross income for such taxable 

25 year. 
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‘‘(c) BENEFICIARY MUST BE UNDER AGE 701 1 ⁄2.— 

2 No deduction shall be allowed under this section with re3 spect to any contribution on behalf of an individual if such 

individual has attained age 701 4 ⁄2 before the close of such 

5 individual’s taxable year for which the contribution was 

6 made. 

7 ‘‘(d) SPECIAL RULES.— 

8 ‘‘(1) MARRIED INDIVIDUALS.—The maximum 

9 deduction under subsection (b) shall be computed 

10 separately for each individual, and this section shall 

11 be applied without regard to any community prop12 erty laws. 

13 ‘‘(2) REPORTS.—The Secretary shall prescribe 

14 regulations which prescribe the time and the manner 

15 in which reports to the Secretary and plan partici16 pants shall be made by the plan administrator of a 

17 qualified employer or government plan receiving 

18 qualified voluntary employee contributions. 

19 ‘‘(e) CROSS REFERENCE.—For failure to provide re20 quired reports, see section 6652(g).’’. 

21 (B) Section 25B(d) is amended— 

22 (i) in paragraph (1)(A), by striking ‘‘(as 

23 defined in section 219(e))’’, and 

24 (ii) by adding at the end the following new 

25 paragraph: 
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1 ‘‘(3) QUALIFIED RETIREMENT CONTRIBU2 TION.—The term ‘qualified retirement contribution’ 

3 means— 

4 ‘‘(A) any amount paid in cash for the tax5 able year by or on behalf of an individual to an 

6 individual retirement plan for such individual’s 

7 benefit, and 

8 ‘‘(B) any amount contributed on behalf of 

9 any individual to a plan described in section 

10 501(c)(18).’’. 

11 (C) Section 86(f)(3) is amended by striking 

12 ‘‘section 219(f)(1)’’ and inserting ‘‘section 408A(g)’’. 

13 (D) Section 132(m)(3) is amended by inserting 

14 ‘‘(as in effect on the day before the date of the en15 actment of the Retirement Savings Account Act)’’ 

16 after ‘‘section 219(g)(5)’’. 

17 (E) Subparagraphs (A), (B), and (C) of section 

18 220(d)(4) are each amended by inserting ‘‘, as in ef19 fect on the day before the date of the enactment of 

20 the Retirement Savings Account Act’’ at the end. 

21 (F) Section 408(b) is amended in the last sen22 tence by striking ‘‘section 219(b)(1)(A)’’ and insert23 ing ‘‘paragraph (2)(C)’’. 

24 (G) Section 408(p)(2)(D)(ii) is amended by in25 serting ‘‘(as in effect on the day before the date of 
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1 the enactment of the Retirement Savings Account 

2 Act)’’ after ‘‘section 219(g)(5)’’. 

3 (H) Section 501(c)(18)(D)(i) is amended by 

4 striking ‘‘section 219(b)(3)’’ and inserting ‘‘section 

5 219(b)’’. 

6 (I) Section 6652(g) is amended by striking 

7 ‘‘section 219(f)(4)’’ and inserting ‘‘section 

8 219(d)(2)’’. 

9 (J) The table of sections for part VII of sub10 chapter B of chapter 1 is amended by striking the 

11 item relating to section 219 and inserting the fol12 lowing new item: 

‘‘Sec. 219. Contributions to certain retirement plans allowing only employee 

contributions.’’. 

13 (2)(A) Section 408(d)(4)(B) is amended to read 

14 as follows: 

15 ‘‘(B) no amount is excludable from gross 

16 income under subsection (h) or (k) of section 

17 402 with respect to such contribution, and’’. 

18 (B) Section 408(d)(5)(A) is amended to read as 

19 follows: 

20 ‘‘(A) IN GENERAL.—In the case of any in21 dividual, if the aggregate contributions (other 

22 than rollover contributions) paid for any taxable 

23 year to an individual retirement account or for 

24 an individual retirement annuity do not exceed 
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1 the dollar amount in effect under subsection 

2 (a)(1) or (b)(2)(C), as the case may be, para3 graph (1) shall not apply to the distribution of 

4 any such contribution to the extent that such 

5 contribution exceeds the amount which is ex6 cludible from gross income under subsection (h) 

7 or (k) of section 402, as the case may be, for 

8 the taxable year for which the contribution was 

9 paid— 

10 ‘‘(i) if such distribution is received 

11 after the date described in paragraph (4), 

12 ‘‘(ii) but only to the extent that such 

13 excess contribution has not been excluded 

14 from gross income under subsection (h) or 

15 (k) of section 402.’’. 

16 (C) Section 408(d)(5) is amended by striking 

17 the last sentence. 

18 (D) Section 408(d)(7) is amended to read as 

19 follows: 

20 ‘‘(7) CERTAIN TRANSFERS FROM SIMPLIFIED

21 EMPLOYEE PENSIONS PROHIBITED UNTIL DEFERRAL

22 TEST MET.—Notwithstanding any other provision of 

23 this subsection or section 72(t), paragraph (1) and 

24 section 72(t)(1) shall apply to the transfer or dis25 tribution from a simplified employee pension of any 
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1 contribution under a salary reduction arrangement 

2 described in subsection (k)(6) (or any income allo3 cable thereto) before a determination as to whether 

4 the requirements of subsection (k)(6)(A)(iii) are met 

5 with respect to such contribution.’’. 

6 (E) Section 408 is amended by striking sub7 section (j). 

8 (F)(i) Section 408 is amended by striking sub9 section (o). 

10 (ii) Section 6693 is amended by striking sub11 section (b) and by redesignating subsections (c) and 

12 (d) as subsections (b) and (c), respectively. 

13 (G) Section 408(p) is amended by striking 

14 paragraph (8) and by redesignating paragraphs (9) 

15 and (10) as paragraphs (8) and (9), respectively. 

16 (3)(A) Section 4973(a)(1) is amended to read 

17 as follows: 

18 ‘‘(1) an individual retirement plan,’’. 

19 (B) Section 4973(b) is amended to read as fol20 lows: 

21 ‘‘(b) EXCESS CONTRIBUTIONS TO SIMPLIFIED EM22 PLOYEE PENSIONS AND SIMPLE RETIREMENT AC23 COUNTS.—For purposes of this section, in the case of sim24 plified employee pensions or simple retirement accounts, 

25 the term ‘excess contributions’ means the sum of— 
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1 ‘‘(1) the excess (if any) of— 

2 ‘‘(A) the amount contributed for the tax3 able year to the pension or account, over 

4 ‘‘(B) the amount applicable to the pension 

5 or account under subsection (a)(1) or (b)(2) of 

6 section 408, and 

7 ‘‘(2) the amount determined under this sub8 section for the preceding taxable year, reduced by 

9 the sum of— 

10 ‘‘(A) the distributions out of the account 

11 for the taxable year which were included in the 

12 gross income of the payee under section 

13 408(d)(1), 

14 ‘‘(B) the distributions out of the account 

15 for the taxable year to which section 408(d)(5) 

16 applies, and 

17 ‘‘(C) the excess (if any) of the maximum 

18 amount excludible from gross income for the 

19 taxable year under subsection (h) or (k) of sec20 tion 402 over the amount contributed to the 

21 pension or account for the taxable year. 

22 For purposes of this subsection, any contribution which 

23 is distributed from a simplified employee pension or simple 

24 retirement account in a distribution to which section 
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1 408(d)(4) applies shall be treated as an amount not con2 tributed.’’. 

3 (C) Section 4973 is amended by adding at the 

4 end the following new subsection: 

5 ‘‘(h) EXCESS CONTRIBUTIONS TO CERTAIN INDI6 VIDUAL RETIREMENT PLANS.—For purposes of this sec7 tion, in the case of individual retirement plans (other than 

8 retirement savings accounts, simplified employee pensions, 

9 and simple retirement accounts), the term ‘excess con10 tribution’ means the sum of— 

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

12 taxable year to the individual retirement plans, and 

13 ‘‘(2) the amount determined under this sub14 section for the preceding taxable year, reduced by 

15 the sum of— 

16 ‘‘(A) the distributions out of the plans 

17 which were included in gross income under sec18 tion 408(d)(1), and 

19 ‘‘(B) the distributions out of the plans for 

20 the taxable year to which section 408(d)(5) ap21 plies. 

22 For purposes of this subsection, any contribution which 

23 is distributed from the plan in a distribution to which sec24 tion 408(d)(4) applies shall be treated as an amount not 

25 contributed.’’. 
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1 (4)(A) Sections 402(c)(8)(B), 

2 402A(c)(3)(A)(ii), 3405(e)(1)(B), and 4973(f) are 

3 each amended by striking ‘‘Roth IRA’’ each place it 

4 appears and inserting ‘‘retirement savings account’’. 

5 (B) Section 4973(f)(1)(A) is amended by strik6 ing ‘‘Roth IRAs’’ and inserting ‘‘retirement savings 

7 accounts’’. 

8 (C) Paragraphs (1)(B) and (2)(B) of section 

9 4973(f) are each amended by striking ‘‘sections 

10 408A(c)(2) and and (c)(3)’’ and inserting ‘‘section 

11 408A(c)(1)’’. 

12 (D) Subsection (f) of section 4973 is amended 

13 in the heading by striking ‘‘ROTH IRAS’’ and insert14 ing ‘‘RETIREMENT SAVINGS ACCOUNTS’’. 

15 (e) EFFECTIVE DATE.—The amendments made by 

16 this section shall apply to taxable years beginning after 

17 December 31, 2004. 

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