EARN Act

To amend the Internal Revenue Code of 1986 to reform retirement provisions, and for other purposes. 1. Short title, etc (a) Short title This Act may be cited as the Enhancing American Retirement Now Act EARN Act (b) Amendment of 1986 Code Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986. (c) Table of contents The table of contents for this Act is as follows: Sec. 1. Short title, etc. TITLE I—Individual retirement Sec. 101. Secure deferral arrangements. Sec. 102. Matching payments for elective deferral and IRA contributions by certain individuals. Sec. 103. Modification of participation requirements for long-term, part-time workers. Sec. 104. Treatment of student loan payments as elective deferrals for purposes of matching contributions. Sec. 105. Withdrawals for certain emergency expenses. Sec. 106. Allow additional nonelective contributions to simple plans. Sec. 107. Small immediate financial incentives for contributing to a plan. Sec. 108. Indexing IRA catch-up limit. Sec. 109. Higher catch-up limit to apply at age 60, 61, 62, and 63. Sec. 110. Eliminate the first day of the month 457(b) Sec. 111. Tax treatment of certain nontrade or business SEP contributions. Sec. 112. Elimination of additional tax on corrective distributions of excess contributions. Sec. 113. Employer may rely on employee certifying that deemed hardship distribution conditions are met. Sec. 114. Penalty-free withdrawals from retirement plans for individuals in case of domestic abuse. Sec. 115. Amendments to increase benefit accruals under plan for previous plan year allowed until employer tax return due date. Sec. 116. Retroactive first year elective deferrals for sole proprietors. Sec. 117. Treasury guidance on rollovers. Sec. 118. Exemption for automatic portability transactions. Sec. 119. Application of section 415 limit for certain employees of rural electric cooperatives. Sec. 120. Insurance-dedicated exchange-traded funds. Sec. 121. Modification of age requirement for qualified ABLE programs. Sec. 122. Assist savers in recovering unclaimed savings bonds. TITLE II—Retirees Sec. 201. Increase in age for required beginning date for mandatory distributions. Sec. 202. Qualifying longevity annuity contracts. Sec. 203. Remove required minimum distribution barriers for life annuities. Sec. 204. Eliminating a penalty on partial annuitization. Sec. 205. Reduction in excise tax on certain accumulations in qualified retirement plans. Sec. 206. Clarification of substantially equal periodic payment rule. Sec. 207. Recovery of retirement plan overpayments. Sec. 208. Retirement Savings Lost and Found. Sec. 209. Roth plan distribution rules. Sec. 210. One-time election for qualified charitable distribution to split-interest entity; increase in qualified charitable distribution limitation. Sec. 211. Exception to penalty on early distributions from qualified plans for individuals with a terminal illness. Sec. 212. Surviving spouse election to be treated as employee. Sec. 213. Long-term care contracts purchased with retirement plan distributions. TITLE III—Public safety officers and military Sec. 301. Military spouse retirement plan eligibility credit for small employers. Sec. 302. Distributions to firefighters. Sec. 303. Exclusion of certain disability-related first responder retirement payments. Sec. 304. Repeal of direct payment requirement on exclusion from gross income of distributions from governmental plans for health and long-term care insurance. Sec. 305. Modification of eligible age for exemption from early withdrawal penalty. Sec. 306. Exemption from early withdrawal penalty for certain State and local government corrections employees. TITLE IV—Nonprofits and educators Sec. 401. Enhancement of 403 (b) Sec. 402. Hardship withdrawal rules for 403 (b) Sec. 403. Multiple employer 403 (b) TITLE V—Disaster relief Sec. 501. Special rules for use of retirement funds in connection with qualified federally declared disasters. TITLE VI—Employer plans Sec. 601. Credit for employers with respect to modified safe harbor requirements. Sec. 602. Application of top heavy rules to defined contribution plans covering excludable employees. Sec. 603. Increase in credit limitation for small employer pension plan startup costs of certain employers. Sec. 604. Expansion of Employee Plans Compliance Resolution System. Sec. 605. Application of credit for small employer pension plan startup costs to employers which join an existing plan. Sec. 606. Safe harbor for corrections of employee elective deferral failures. Sec. 607. Reform of family attribution rule. Sec. 608. Contribution limit for simple IRAs. Sec. 609. Employers allowed to replace simple retirement accounts with safe harbor 401 (k) Sec. 610. Starter 401(k) Sec. 611. Credit for small employers that adapt an automatic portability arrangement. Sec. 612. Re-enrollment credit. Sec. 613. Corrections of mortality tables. Sec. 614. Enhancing retiree health benefits in pension plans. Sec. 615. Deferral of tax for certain sales of employer stock to employee stock ownership plan sponsored by S corporation. TITLE VII—Notices Sec. 701. Review and report to Congress relating to reporting and disclosure requirements. Sec. 702. Report to Congress on section 402(f) notices. Sec. 703. Eliminating unnecessary plan requirements related to unenrolled participants. TITLE VIII—Technical modifications Sec. 801. Repayment of qualified birth or adoption distribution limited to 3 Sec. 802. Amendments relating to Setting Every Community Up for Retirement Enhancement Act of 2019 Sec. 803. Modification of required minimum distribution rules for special needs trusts. TITLE IX—Plan amendments Sec. 901. Provisions relating to plan amendments. TITLE X—Tax Court retirement provisions Sec. 1001. Provisions relating to judges of the Tax Court. Sec. 1002. Provisions relating to special trial judges of the Tax Court. TITLE XI—Revenue provisions Sec. 1101. Simple and SEP Roth IRAs. Sec. 1102. Elective deferrals generally limited to regular contribution limit. Sec. 1103. Optional treatment of employer matching or nonelective contributions as Roth contributions. Sec. 1104. Charitable conservation easements. I Individual retirement 101. Secure deferral arrangements (a) In general Subsection (k) of section 401 (16) Alternative method for secure deferral arrangements to meet nondiscrimination requirements (A) In general A secure deferral arrangement shall be treated as meeting the requirements of paragraph (3)(A)(ii). (B) Secure deferral arrangement For purposes of this paragraph, the term secure deferral arrangement (C) Qualified percentage For purposes of this paragraph, in applying paragraph (13)(C) with respect to any employee, the term qualified percentage (i) at least 6 percent, but not greater than 10 percent, during the period ending on the last day of the first plan year which begins after the date on which the first elective contribution described in paragraph (13)(C)(i) is made with respect to such employee, (ii) at least 7 percent during the first plan year following the plan year described in clause (i), (iii) at least 8 percent during the second plan year following the plan year described in clause (i), (iv) at least 9 percent during the third plan year following the plan year described in clause (i), and (v) at least 10 percent during any subsequent plan year. (D) Matching contributions (i) In general For purposes of this paragraph, an arrangement shall be treated as having met the requirements of paragraph (13)(D)(i) if and only if the employer makes matching contributions on behalf of each employee who is not a highly compensated employee in an amount equal to the sum of— (I) 100 percent of the elective contributions of the employee to the extent such contributions do not exceed 2 percent of compensation, (II) 50 percent of so much of such contributions as exceed 2 percent but do not exceed 6 percent of compensation, plus (III) 20 percent of so much of such contributions as exceed 6 percent but do not exceed 10 percent of compensation. (ii) Rules for matching contributions (I) In general The rate of matching contributions with respect to each increment of employee contributions may be higher than the rate specified in clause (i) so long as such rate does not increase as an employee’s rate of elective contributions increases. (II) Rules relating to alternative plan designs The rules of paragraph (12)(B)(iii) shall not apply for purposes of clause (i). . (b) Matching contributions Subsection (m) of section 401 (13) Alternative method for secure deferral arrangements A defined contribution plan shall be treated as meeting the requirements of paragraph (2) with respect to matching contributions if the plan— (A) is a secure deferral arrangement (as defined in subsection (k)(16)), (B) meets the requirements of clauses (ii) and (iii) of paragraph (11)(B), and (C) provides that matching contributions on behalf of any employee may not be made with respect to an employee’s contributions or elective deferrals in excess of 10 percent of the employee’s compensation. . (c) Conforming amendments (1) Clause (ii) of section 401(k)(12)(F) or paragraph (13)(D)(i)(I) , paragraph (13)(D)(i)(I), or paragraph (16)(D) (2) Subclause (II) of section 401(k)(15)(B)(i) subsection (a)(4), paragraphs (3), (12), and (13) paragraphs (3), (12), (13), and (16), subsection (a)(4) (3) Subparagraph (H) of section 416(g)(4) (A) in clause (i), by striking section 401(k)(12) or 401(k)(13) paragraph (12), (13), or (16) of section 401(k) (B) in clause (ii), by striking section 401(m)(11) or 401(m)(12) paragraph (11), (12), or (13) of section 401(m) (d) Effective date The amendments made by this section shall apply to plan years beginning after December 31, 2023. 102. Matching payments for elective deferral and IRA contributions by certain individuals (a) In general Subchapter B of chapter 65 6433. Matching payments for elective deferral and IRA contributions by certain individuals (a) In general (1) Allowance of credit Any eligible individual who makes qualified retirement savings contributions for the taxable year shall be allowed a credit for such taxable year in an amount equal to the applicable percentage of so much of the qualified retirement savings contributions made by such eligible individual for the taxable year as does not exceed $2,000. (2) Payment of credit (A) In general Except as provided in subparagraph (A), the credit under this section shall be— (i) treated as allowed by subpart C of part IV of subchapter A of chapter 1, and (ii) paid by the Secretary as a contribution (as soon as practicable after the eligible individual has filed a tax return making a claim for such credit for the taxable year) to the applicable retirement savings vehicle of an eligible individual. (B) Exception In the case of an eligible individual with respect to whom the credit determined under paragraph (1) is greater than zero but less than $100 for the taxable year, the eligible individual may elect to have subparagraph (A) not apply. (b) Applicable percentage For purposes of this section— (1) In general Except as provided in paragraph (2), the applicable percentage is 50 percent. (2) Phaseout The percentage under paragraph (1) shall be reduced (but not below zero) by the number of percentage points which bears the same ratio to 50 percentage points as— (A) the excess of— (i) the taxpayer’s modified adjusted gross income for such taxable year, over (ii) the applicable dollar amount, bears to (B) the phaseout range. If any reduction determined under this paragraph is not a whole percentage point, such reduction shall be rounded to the next lowest whole percentage point. (3) Applicable dollar amount; phaseout range (A) Joint returns and surviving spouses Except as provided in subparagraph (B)— (i) the applicable dollar amount is $41,000, and (ii) the phaseout range is $30,000. (B) Other returns In the case of— (i) a head of a household (as defined in section 2(b)), the applicable dollar amount and the phaseout range shall be 3/4 (ii) any taxpayer who is not filing a joint return, who is not a head of a household (as so defined), and who is not a surviving spouse (as defined in section 2(a)), the applicable dollar amount and the phaseout range shall be ½ (c) Eligible individual For purposes of this section— (1) In general The term eligible individual (2) Dependents and full-time students not eligible The term eligible individual (A) any individual with respect to whom a deduction under section 151 is allowed to another taxpayer for a taxable year beginning in the calendar year in which such individual's taxable year begins, and (B) any individual who is a student (as defined in section 152(f)(2)). (3) Nonresident aliens not eligible The term eligible individual (d) Qualified retirement savings contributions For purposes of this section— (1) In general The term qualified retirement savings contributions (A) the amount of the qualified retirement contributions (as defined in section 219(e)) made by the eligible individual, (B) the amount of— (i) any elective deferrals (as defined in section 402(g)(3)) of such individual, and (ii) any elective deferral of compensation by such individual under an eligible deferred compensation plan (as defined in section 457(b)) of an eligible employer described in section 457(e)(1)(A), and (C) the amount of voluntary employee contributions by such individual to any qualified retirement plan (as defined in section 4974(c)). Such term shall not include any amount attributable to a payment under subsection (a)(2). (2) Reduction for certain distributions (A) In general The qualified retirement savings contributions determined under paragraph (1) for a taxable year shall be reduced (but not below zero) by the aggregate distributions received by the individual during the testing period from any entity of a type to which contributions under paragraph (1) may be made. (B) Testing period For purposes of subparagraph (A), the testing period, with respect to a taxable year, is the period which includes— (i) such taxable year, (ii) the 2 preceding taxable years, and (iii) the period after such taxable year and before the due date (including extensions) for filing the return of tax for such taxable year. (C) Excepted distributions There shall not be taken into account under subparagraph (A)— (i) any distribution referred to in section 72(p), 401(k)(8), 401(m)(6), 402(g)(2), 404(k), or 408(d)(4), (ii) any distribution to which section 408(d)(3) or 408A(d)(3) applies, and (iii) any portion of a distribution if such portion is transferred or paid in a rollover contribution (as defined in section 402(c), 403(a)(4), 403(b)(8), 408A(e), or 457(e)(16)) to an account or plan to which qualified retirement savings contributions can be made. (D) Treatment of distributions received by spouse of individual For purposes of determining distributions received by an individual under subparagraph (A) for any taxable year, any distribution received by the spouse of such individual shall be treated as received by such individual if such individual and spouse file a joint return for such taxable year and for the taxable year during which the spouse receives the distribution. (e) Applicable retirement savings vehicle (1) In general The term applicable retirement savings vehicle (2) Election Any such election to have contributed the amount determined under subsection (a) shall be to an account or plan which— (A) is— (i) the portion of a plan described in clause (iii), (iv), (v), or (vi) of section 402(c)(8)(B) which does not consist of a qualified Roth contribution program (as defined in section 402A(b)), or (ii) an individual retirement plan which is not a Roth IRA, (B) is for the benefit of the eligible individual, (C) accepts contributions made under this section, and (D) is designated by such individual (in such form and manner as the Secretary may provide). (f) Other definitions and special rules (1) Modified adjusted gross income For purposes of this section, the term modified adjusted gross income (A) determined without regard to sections 911, 931, and 933, and (B) determined without regard to any exclusion or deduction allowed for any qualified retirement savings contribution made during the taxable year. (2) Treatment of contributions In the case of any contribution under subsection (a)(2)— (A) except as otherwise provided in this section or by the Secretary under regulations, such contribution shall be treated as— (i) an elective deferral made by the individual, if contributed to an applicable retirement savings vehicle described in subsection (e)(2)(A)(i), or (ii) as an individual retirement plan contribution made by such individual, if contributed to such a plan, and (B) such contribution shall not be taken into account with respect to any applicable limitation under sections 402(g)(1), 403(b), 408(a)(1), 408(b)(2)(B), 408A(c)(2), 414(v)(2), 415(c), or 457(b)(2), and shall be disregarded for purposes of sections 401(a)(4), 401(k)(3), 401(k)(11)(B)(i)(III), and 416. (3) Treatment of qualified plans, etc A plan or arrangement to which a contribution is made under this section shall not be treated as violating any requirement under section 401, 403, 408, or 457 solely by reason of accepting such contribution. (4) Erroneous credits (A) In general If any contribution is erroneously paid under subsection (a)(2), including a payment that is not made to an applicable retirement savings vehicle, the amount of such erroneous payment shall be treated as an underpayment of tax (other than for purposes of part II of subchapter A of chapter 68) for the taxable year in which the Secretary determines the payment is erroneous. (B) Distribution of erroneous credits In the case of a contribution to which subparagraph (A) applies— (i) section 402(a), 403(a)(1), 403(b)(1), 408(d)(1), or 457(a)(1), whichever is applicable, shall not apply to any distribution of such contribution, and section 72(t) shall not apply to the distribution of such contribution or any income attributable thereto, if such distribution is received not later than the day prescribed by law (including extensions of time) for filing the individual’s return for such taxable year, and (ii) any plan or arrangement from which such a distribution is made under this subparagraph shall not be treated as violating any requirement under section 401, 403, or 457 solely by reason of making such distribution. (5) Exception from reduction or offset Any payment made to any individual under this section shall not be— (A) subject to reduction or offset pursuant to subsection (c), (d), (e), or (f) of section 6402 or any similar authority permitting offset, or (B) reduced or offset by other assessed Federal taxes that would otherwise be subject to levy or collection. (g) Provision by Secretary of information relating to contributions In the case of an amount elected by an eligible individual to be contributed to an account or plan under subsection (e)(2), the Secretary shall provide general guidance applicable to the custodian of the account or the plan sponsor, as the case may be, detailing the treatment of such contribution under subsection (f)(2) and the reporting requirements with respect to such contribution under section 6058, particularly as such requirements are modified pursuant to section 102(c)(2) of the Enhancing American Retirement Now Act (h) Inflation adjustments (1) In general In the case of any taxable year beginning in a calendar year after 2027, the $41,000 amount in subsection (b)(3)(A)(i) shall be increased by an amount equal to— (A) such dollar amount, multiplied by (B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting calendar year 2026 calendar year 2016 (2) Rounding Any increase determined under paragraph (1) shall be rounded to the nearest multiple of $1,000. . (b) Treatment of Certain Possessions (1) Payments to possessions with mirror code tax systems The Secretary of the Treasury shall pay to each possession of the United States which has a mirror code tax system amounts equal to the loss (if any) to that possession by reason of the amendments made by this section. Such amounts shall be determined by the Secretary of the Treasury based on information provided by the government of the respective possession. (2) Payments to other possessions The Secretary of the Treasury shall pay to each possession of the United States which does not have a mirror code tax system amounts estimated by the Secretary of the Treasury as being equal to the aggregate benefits (if any) that would have been provided to residents of such possession by reason of the amendments made by this section if a mirror code tax system had been in effect in such possession. The preceding sentence shall not apply unless the respective possession has a plan, which has been approved by the Secretary of the Treasury, under which such possession will promptly distribute such payments to its residents. (3) Coordination with credit allowed against United States income taxes No credit shall be allowed against United States income taxes under section 6433 (A) to whom a credit is allowed against taxes imposed by the possession by reason of the amendments made by this section, or (B) who is eligible for a payment under a plan described in paragraph (2). (4) Mirror code tax system For purposes of this subsection, the term mirror code tax system (5) Treatment of payments For purposes of section 1324 of title 31, United States Code, the payments under this subsection shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section. (c) Administrative provisions (1) Deficiencies Section 6211(b)(4) and 7527A 7527A, and 6433 (2) Reporting The Secretary of the Treasury shall amend the forms relating to reports required under section 6058 (A) separate reporting of the aggregate amount of contributions received by the plan during the year under section 6433 (B) similar reporting with respect to individual retirement accounts (as defined in section 408 of such Code) and individual retirement annuities (as defined in section 408(b) of such Code). (d) Payment authority Section 1324(b)(2) of title 31, United States Code, is amended by striking or 7527A 7527A, or 6433 (e) Conforming amendments (1) Paragraph (1) of section 25B(d) the sum of— the amount of contributions made before January 1, 2026 the amount of contributions made before January 1, 2026 (2) The table of sections for subchapter B of chapter 65 Sec. 6433. Matching payments for elective deferral and IRA contributions by certain individuals. . (f) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2026. 103. Modification of participation requirements for long-term, part-time workers (a) Participation requirement Clause (ii) of section 401(k)(2)(D) 3 consecutive 2 consecutive (b) Pre- 2021 Section 112(b) of the Setting Every Community Up for Retirement Enhancement Act of 2019 ( 26 U.S.C. 401 section 401(k)(2)(D)(ii) paragraphs (2)(D)(ii) and (15)(B)(iii) of section 401(k) (c) Coordination with rules for top-heavy plans Subparagraph (H) of section 416(g)(4), as amended by this Act, is further amended by inserting before If, but Such term shall not include a plan solely because such plan does not provide matching contributions to employees described in section 401(k)(15)(B)(i). (d) Effective dates (1) In general The amendment made by subsection (a) shall apply to plan years beginning after December 31, 2022. (2) Pre-2021 service and top-heavy rules The amendments made by subsections (b) and (c) shall take effect as if included in the enactment of section 112 of the Setting Every Community Up for Retirement Enhancement Act of 2019. 104. Treatment of student loan payments as elective deferrals for purposes of matching contributions (a) In general Subparagraph (A) of section 401(m)(4) and , and (iii) subject to the requirements of paragraph (14), any employer contribution made to a defined contribution plan on behalf of an employee on account of a qualified student loan payment. . (b) Qualified student loan payment Paragraph (4) of section 401(m) (D) Qualified student loan payment The term qualified student loan payment (i) to the extent such payments in the aggregate for the year do not exceed an amount equal to— (I) the limitation applicable under section 402(g) for the year (or, if lesser, the employee's compensation (as defined in section 415(c)(3)) for the year), reduced by (II) the elective deferrals made by the employee for such year, and (ii) if the employee certifies annually to the employer making the matching contribution under this paragraph that such payment has been made on such loan. For purposes of this subparagraph, the term qualified higher education expenses . (c) Matching contributions for qualified student loan payments Subsection (m) of section 401, as amended by this Act, is further amended by redesignating paragraph (14) as paragraph (15), and by inserting after paragraph (13) the following new paragraph: (14) Matching contributions for qualified student loan payments (A) In general For purposes of paragraph (4)(A)(iii), an employer contribution made to a defined contribution plan on account of a qualified student loan payment shall be treated as a matching contribution for purposes of this title if— (i) the plan provides matching contributions on account of elective deferrals at the same rate as contributions on account of qualified student loan payments, (ii) the plan provides matching contributions on account of qualified student loan payments only on behalf of employees otherwise eligible to receive matching contributions on account of elective deferrals, (iii) under the plan, all employees eligible to receive matching contributions on account of elective deferrals are eligible to receive matching contributions on account of qualified student loan payments, and (iv) the plan provides that matching contributions on account of qualified student loan payments vest in the same manner as matching contributions on account of elective deferrals. (B) Treatment for purposes of nondiscrimination rules, etc (i) Nondiscrimination rules For purposes of subparagraph (A)(iii), subsection (a)(4), and section 410(b), matching contributions described in paragraph (4)(A)(iii) shall not fail to be treated as available to an employee solely because such employee does not have debt incurred under a qualified education loan (as defined in section 221(d)(1)). (ii) Student loan payments not treated as plan contribution Except as provided in clause (iii), a qualified student loan payment shall not be treated as a contribution to a plan under this title. (iii) Matching contribution rules Solely for purposes of meeting the requirements of paragraph (11)(B), (12), or (13) of this subsection, or paragraph (11)(B)(i)(II), (12)(B), (13)(D), or (16)(D) of subsection (k), a plan may treat a qualified student loan payment as an elective deferral or an elective contribution, whichever is applicable. (iv) Actual deferral percentage testing In determining whether a plan meets the requirements of subsection (k)(3)(A)(ii) for a plan year, the plan may apply the requirements of such subsection separately with respect to all employees who receive matching contributions described in paragraph (4)(A)(iii) for the plan year. (C) Employer may rely on employee certification The employer may rely on an employee certification of payment under paragraph (4)(D)(ii). . (d) Simple retirement accounts Paragraph (2) of section 408(p) (F) Matching contributions for qualified student loan payments (i) In general Subject to the rules of clause (iii), an arrangement shall not fail to be treated as meeting the requirements of subparagraph (A)(iii) solely because under the arrangement, solely for purposes of such subparagraph, qualified student loan payments are treated as amounts elected by the employee under subparagraph (A)(i)(I) to the extent such payments do not exceed— (I) the applicable dollar amount under subparagraph (E) (after application of section 414(v)) for the year (or, if lesser, the employee's compensation (as defined in section 415(c)(3)) for the year), reduced by (II) any other amounts elected by the employee under subparagraph (A)(i)(I) for the year. (ii) Qualified student loan payment For purposes of this subparagraph— (I) In general The term qualified student loan payment (II) Qualified higher education expenses The term qualified higher education expenses (iii) Applicable rules Clause (i) shall apply to an arrangement only if, under the arrangement— (I) matching contributions on account of qualified student loan payments are provided only on behalf of employees otherwise eligible to elect contributions under subparagraph (A)(i)(I), and (II) all employees otherwise eligible to participate in the arrangement are eligible to receive matching contributions on account of qualified student loan payments. . (e) 403 (b) Subparagraph (A) of section 403(b)(12) The fact that the employer offers matching contributions on account of qualified student loan payments as described in section 401(m)(14) shall not be taken into account in determining whether the arrangement satisfies the requirements of clause (ii) (and any regulation thereunder). (f) 457 (b) Subsection (b) of section 457 A plan which is established and maintained by an employer which is described in subsection (e)(1)(A) shall not be treated as failing to meet the requirements of this subsection solely because the plan, or another plan maintained by the employer which meets the requirements of section 401(a) or 403(b), provides for matching contributions on account of qualified student loan payments as described in section 401(m)(14). (g) Regulatory authority The Secretary of the Treasury (or such Secretary's delegate) shall prescribe regulations for purposes of implementing the amendments made by this section, including regulations— (1) permitting a plan to make matching contributions for qualified student loan payments, as defined in sections 401(m)(4)(D) and 408(p)(2)(F) of the Internal Revenue Code of 1986, as added by this section, at a different frequency than matching contributions are otherwise made under the plan, provided that the frequency is not less than annually; (2) permitting employers to establish reasonable procedures to claim matching contributions for such qualified student loan payments under the plan, including an annual deadline (not earlier than 3 months after the close of each plan year) by which a claim must be made; and (3) promulgating model amendments which plans may adopt to implement matching contributions on such qualified student loan payments for purposes of sections 401(m), 408(p), 403(b), and 457(b) of the Internal Revenue Code of 1986. (h) Effective date The amendments made by this section shall apply to contributions made for plan years beginning after December 31, 2023. 105. Withdrawals for certain emergency expenses (a) In general Paragraph (2) of section 72(t) (I) Distributions for certain emergency expenses (i) In general Any emergency personal expense distribution. (ii) Annual limitation Not more than 1 distribution per calendar year may be treated as an emergency personal expense distribution by any individual. (iii) Dollar limitation The amount which may be treated as an emergency personal expense distribution by any individual in any calendar year shall not exceed the lesser of $1,000 or an amount equal to the excess of— (I) the individual's total nonforfeitable accrued benefit under the plan (the individual's total interest in the plan in the case of an individual retirement plan), determined as of the date of each such distribution, over (II) $1,000. (iv) Emergency personal expense distribution For purposes of this subparagraph, the term emergency personal expense distribution (v) Treatment of plan distributions If a distribution to an individual would (without regard to clause (ii) or (iii)) be an emergency personal expense distribution, a plan shall not be treated as failing to meet any requirement of this title merely because the plan treats the distribution as an emergency personal expense distribution, unless the number or the aggregate amount of such distributions from all plans maintained by the employer (and any member of any controlled group which includes the employer, determined as provided in subparagraph (H)(iv)(II)) to such individual exceeds the limitation determined under clause (ii) or (iii). (vi) Amount distributed may be repaid (I) In general Any individual who receives an emergency personal expense distribution may, at any time during the 3-year period beginning on the day after the date on which such distribution was received, make one or more contributions in an aggregate amount not to exceed the amount of such distribution to an applicable eligible retirement plan of which such individual is a beneficiary and to which a rollover contribution of such distribution could be made under section 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16), as the case may be. (II) Limitation on contributions to applicable eligible retirement plans other than IRAs The aggregate amount of contributions made by an individual under subclause (I) to any applicable eligible retirement plan which is not an individual retirement plan shall not exceed the aggregate amount of emergency personal expense distributions which are made from such plan to such individual. Subclause (I) shall not apply to contributions to any applicable eligible retirement plan which is not an individual retirement plan unless the individual is eligible to make contributions (other than those described in subclause (I)) to such applicable eligible retirement plan. (III) Treatment of repayments of distributions from applicable eligible retirement plans other than IRAs If a contribution is made under subclause (I) with respect to an emergency personal expense distribution from an applicable eligible retirement plan other than an individual retirement plan, then the taxpayer shall, to the extent of the amount of the contribution, be treated as having received such distribution in an eligible rollover distribution (as defined in section 402(c)(4)) and as having transferred the amount to the applicable eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution. (IV) Treatment of repayments for distributions from IRAs If a contribution is made under subclause (I) with respect to an emergency personal expense distribution from an individual retirement plan, then, to the extent of the amount of the contribution, such distribution shall be treated as a distribution described in section 408(d)(3) and as having been transferred to the applicable eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution. (vii) Limitation on subsequent distributions If a distribution is treated as an emergency personal expense distribution in any calendar year with respect to a plan of the employee, no amount may be treated as such a distribution during the immediately following 3 calendar years with respect to such plan unless— (I) such previous distribution is fully repaid to such plan pursuant to clause (vi), or (II) the aggregate of the elective deferrals and employee contributions to the plan (the total amounts contributed to the plan in the case of an individual retirement plan) subsequent to such previous distribution is at least equal to the amount of such previous distribution which has not been so repaid. (viii) Special rules Rules similar to the rules of subclauses (II) and (IV) of subparagraph (H)(vi) shall apply to any emergency personal expense distribution. . (b) Effective date The amendments made by this section shall apply to distributions made after December 31, 2023. 106. Allow additional nonelective contributions to simple plans (a) In general (1) Modification to definition Subparagraph (A) of section 408(p)(2) and (iv) the employer may make nonelective contributions— (I) of a uniform percentage (up to 10 percent) of compensation, and (II) not to exceed $5,000, for each employee who is eligible to participate in the arrangement and who has at least $5,000 of compensation from the employer for the year, and . (2) Limitation Subparagraph (A) of section 408(p)(2) The compensation taken into account under clause (iv) for any year shall not exceed the limitation in effect for such year under section 401(a)(17). (3) Overall dollar limit on contributions Paragraph (8) of section 408(p) (8) Coordination with maximum limitation In the case of any simple retirement account— (A) subsection (a)(1) shall be applied by substituting for the amount in effect for such taxable year under section 219(b)(1)(A) the sum of the dollar amount in effect under subsection (p)(2)(A)(ii), the employer contribution required under subsection (p)(2)(A)(iii) or (p)(2)(B)(i), whichever is applicable, and a contribution which meets the requirement of subsection (p)(2)(A)(iv) with respect to the employee (B) subsection (b)(2)(B) shall be applied by substituting for the dollar amount in effect under section 219(b)(1)(A) the sum of the dollar amount in effect under subsection (p)(2)(A)(ii), the employer contribution required under subsection (p)(2)(A)(iii) or (p)(2)(B)(i), whichever is applicable, and a contribution which meets the requirement of subsection (p)(2)(A)(iv) with respect to the employee . (4) Adjustment for inflation Paragraph (2) of section 408(p), as amended by this Act, is further amended by adding at the end the following new subparagraph: (G) Adjustment for inflation In the case of taxable years beginning after December 31, 2024, the $5,000 amount in subparagraph (A)(iv)(II) shall be increased by an amount equal to— (i) such amount, multiplied by (ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting 2023 2016 If any amount as adjusted under the preceding sentence is not a multiple of $100, such amount shall be rounded to the nearest multiple of $100. . (b) Conforming amendments (1) Section 408(p)(2)(A)(v), as redesignated by subsection (a), is amended by striking or (iii) , (iii), or (iv) (2) Section 401(k)(11)(B)(i) and (III) the employer may make nonelective contributions of a uniform percentage (up to 10 percent) of compensation, not to exceed the amount in effect under section 408(p)(2)(A)(iv)(II) in any year, for each employee who is eligible to participate in the arrangement and who has at least $5,000 of compensation from the employer for the year, and . (3) Section 401(k)(11)(B)(i)(IV), as redesignated by paragraph (2), is amended by striking or (II) , (II), or (III) (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2023. 107. Small immediate financial incentives for contributing to a plan (a) In general Subparagraph (A) of section 401(k)(4) (other than a de minimis financial incentive provided to employees who elect to have the employer make contributions under the arrangement in lieu of receiving cash) any other benefit (b) Section 403 (b) Subparagraph (A) of section 403(b)(12), as amended by this Act, is further amended by adding at the end the following: A plan shall not fail to satisfy clause (ii) solely by reason of offering a de minimis financial incentive for employees who elect to have the employer make contributions pursuant to a salary reduction agreement. (c) Exemption from prohibited transaction rules Subsection (d) of section 4975 or , or (24) the provision of a de minimis financial incentive described in section 401(k)(4)(A) or 403(b)(12)(A). . (d) Effective date The amendments made by this section shall apply with respect to plan years beginning after the date of the enactment of this Act. 108. Indexing IRA catch-up limit (a) In general Subparagraph (C) of section 219(b)(5) (iii) Indexing of catch-up limitation In the case of any taxable year beginning in a calendar year after 2022, the $1,000 amount under subparagraph (B)(ii) shall be increased by an amount equal to— (I) such dollar amount, multiplied by (II) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting calendar year 2021 calendar year 2016 If any amount after adjustment under the preceding sentence is not a multiple of $100, such amount shall be rounded to the next lower multiple of $100. . (b) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 109. Higher catch-up limit to apply at age 60, 61, 62, and 63 (a) In general (1) Plans other than simple plans Section 414(v)(2)(B)(i) ($10,000, in the case of an eligible participant who would attain age 60 but would not attain age 64 before the close of the taxable year) (2) Simple plans Section 414(v)(2)(B)(ii) ($5,000, in the case of an eligible participant who would attain age 60 but would not attain age 64 before the close of the taxable year) (b) Cost-of-living adjustments Subparagraph (C) of section 414(v)(2) In the case of a year beginning after December 31, 2025, the Secretary shall adjust annually the $10,000 amount in subparagraph (B)(i) and the $5,000 amount in subparagraph (B)(ii) for increases in the cost-of-living at the same time and in the same manner as adjustments under the preceding sentence; except that the base period taken into account shall be the calendar quarter beginning July 1, 2024. (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2024. 110. Eliminate the first day of the month 457(b) (a) In general Section 457(b)(4) (4) which provides that compensation— (A) in the case of an eligible employer described in subsection (e)(1)(A), will be deferred only if an agreement providing for such deferral has been entered into before the compensation is currently available to the individual, and (B) in any other case, will be deferred for any calendar month only if an agreement providing for such deferral has been entered into before the beginning of such month, . (b) Effective date The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 111. Tax treatment of certain nontrade or business SEP contributions (a) In general Subparagraph (B) of section 4972(c)(6) (1) by striking 408(p)) or 408(p)), (2) by inserting , or a simplified employee pension (within the meaning of section 408(k)) 401(k)(11)) (b) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 112. Elimination of additional tax on corrective distributions of excess contributions (a) In general Subparagraph (A) of section 72(t)(2) (1) by striking or (2) by striking the period at the end of clause (viii) and inserting , or (3) by inserting after clause (viii) the following new clause: (ix) attributable to withdrawal of net income attributable to a contribution which is distributed pursuant to section 408(d)(4). . (b) Effective date The amendments made by this section shall apply to any determination of, or affecting, liability for taxes, interest, or penalties which is made on or after the date of the enactment of this Act, without regard to whether the act (or failure to act) upon which the determination is based occurred before such date of enactment. Notwithstanding the preceding sentence, nothing in the amendments made by this section shall be construed to create an inference with respect to the law in effect prior to the effective date of such amendments. 113. Employer may rely on employee certifying that deemed hardship distribution conditions are met (a) Cash or deferred arrangements Section 401(k)(14) (C) Employee certification In determining whether a distribution is upon the hardship of an employee, the administrator of the plan may rely on a written certification by the employee that the distribution is— (i) on account of a financial need of a type which is deemed in regulations prescribed by the Secretary to be an immediate and heavy financial need, and (ii) not in excess of the amount required to satisfy such financial need, and that the employee has no alternative means reasonably available to satisfy such financial need. The Secretary may provide by regulations for exceptions to the rule of the preceding sentence in cases where the plan administrator has actual knowledge to the contrary of the employee's certification, and for procedures for addressing cases of employee misrepresentation. . (b) 403(b) (1) Custodial accounts Section 403(b)(7) (D) Employee certification In determining whether a distribution is upon the financial hardship of an employee, the administrator of the plan may rely on a written certification by the employee that the distribution is— (i) on account of a financial need of a type which is deemed in regulations prescribed by the Secretary to be an immediate and heavy financial need, and (ii) not in excess of the amount required to satisfy such financial need, and that the employee has no alternative means reasonably available to satisfy such financial need. The Secretary may provide by regulations for exceptions to the rule of the preceding sentence in cases where the plan administrator has actual knowledge to the contrary of the employee's certification, and for procedures for addressing cases of employee misrepresentation. . (2) Annuity contracts Section 403(b)(11) In determining whether a distribution is upon hardship of an employee, the administrator of the plan may rely on a written certification by the employee that the distribution is on account of a financial need of a type which is deemed in regulations prescribed by the Secretary to be an immediate and heavy financial need and is not in excess of the amount required to satisfy such financial need, and that the employee has no alternative means reasonably available to satisfy such financial need. The Secretary may provide by regulations for exceptions to the rule of the preceding sentence in cases where the plan administrator has actual knowledge to the contrary of the employee's certification, and for procedures for addressing cases of employee misrepresentation. (c) 457(b) Section 457(d) (4) Participant certification In determining whether a distribution to a participant is made when the participant is faced with an unforeseeable emergency, the administrator of a plan maintained by an eligible employer described in subsection (e)(1)(A) may rely on a written certification by the participant that the distribution is— (A) made when the participant is faced with an unforeseeable emergency of a type which is described in regulations prescribed by the Secretary as an unforeseeable emergency, and (B) not in excess of the amount required to satisfy the emergency need, and that the participant has no alternative means reasonably available to satisfy such emergency need. The Secretary may provide by regulations for exceptions to the rule of the preceding sentence in cases where the plan administrator has actual knowledge to the contrary of the participant's certification, and for procedures for addressing cases of participant misrepresentation. . (d) Effective date The amendments made by this section shall apply to plan years beginning after the date of the enactment of this Act. 114. Penalty-free withdrawals from retirement plans for individuals in case of domestic abuse (a) In general Paragraph (2) of section 72(t), as amended by this Act, is further amended by adding at the end the following new subparagraph: (J) Distributions from retirement plan in case of domestic abuse (i) In general Any eligible distribution to a domestic abuse victim. (ii) Limitation The aggregate amount which may be treated as an eligible distribution to a domestic abuse victim by any individual shall not exceed an amount equal to the lesser of— (I) $10,000, or (II) 50 percent of the present value of the nonforfeitable accrued benefit of the employee under the plan. (iii) Eligible distribution to a domestic abuse victim For purposes of this subparagraph— (I) In general A distribution shall be treated as an eligible distribution to a domestic abuse victim if such distribution is from an applicable eligible retirement plan and is made to an individual during the 1-year period beginning on any date on which the individual is a victim of domestic abuse by a spouse or domestic partner. (II) Domestic abuse The term domestic abuse (iv) Treatment of plan distributions If a distribution to an individual would (without regard to clause (ii)) be an eligible distribution to a domestic abuse victim, a plan shall not be treated as failing to meet any requirement of this title merely because the plan treats the distribution as an eligible distribution to a domestic abuse victim, unless the aggregate amount of such distributions from all plans maintained by the employer (and any member of any controlled group which includes the employer, determined as provided in subparagraph (H)(iv)(II)) to such individual exceeds the limitation under clause (ii). (v) Amount distributed may be repaid (I) In general Any individual who receives a distribution described in clause (i) may, at any time during the 3-year period beginning on the day after the date on which such distribution was received, make one or more contributions in an aggregate amount not to exceed the amount of such distribution to an applicable eligible retirement plan of which such individual is a beneficiary and to which a rollover contribution of such distribution could be made under section 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16), as the case may be. (II) Limitation on contributions to applicable eligible retirement plans other than IRAs The aggregate amount of contributions made by an individual under subclause (I) to any applicable eligible retirement plan which is not an individual retirement plan shall not exceed the aggregate amount of eligible distributions to a domestic abuse victim which are made from such plan to such individual. Subclause (I) shall not apply to contributions to any applicable eligible retirement plan which is not an individual retirement plan unless the individual is eligible to make contributions (other than those described in subclause (I)) to such applicable eligible retirement plan. (III) Treatment of repayments of distributions from applicable eligible retirement plans other than IRAs If a contribution is made under subclause (I) with respect to an eligible distribution to a domestic abuse victim from an applicable eligible retirement plan other than an individual retirement plan, then the taxpayer shall, to the extent of the amount of the contribution, be treated as having received such distribution in an eligible rollover distribution (as defined in section 402(c)(4)) and as having transferred the amount to the applicable eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution. (IV) Treatment of repayments for distributions from IRAs If a contribution is made under subclause (I) with respect to an eligible distribution to a domestic abuse victim from an individual retirement plan, then, to the extent of the amount of the contribution, such distribution shall be treated as a distribution described in section 408(d)(3) and as having been transferred to the applicable eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution. (vi) Definition and special rules For purposes of this subparagraph: (I) Applicable eligible retirement plan The term applicable eligible retirement plan (II) Exemption of distributions from trustee to trustee transfer and withholding rules For purposes of sections 401(a)(31), 402(f), and 3405, an eligible distribution to a domestic abuse victim shall not be treated as an eligible rollover distribution. (III) Distributions treated as meeting plan distribution requirements; self-certification Any distribution which the employee or participant certifies as being an eligible distribution to a domestic abuse victim shall be treated as meeting the requirements of sections 401(k)(2)(B)(i), 403(b)(7)(A)(i), 403(b)(11), and 457(d)(1)(A). . (b) Effective date The amendments made by this section shall apply to distributions made after the date of the enactment of this Act. 115. Amendments to increase benefit accruals under plan for previous plan year allowed until employer tax return due date (a) In general Section 401(b) (3) Retroactive plan amendments that increase benefit accruals If— (A) an employer amends a stock bonus, pension, profit-sharing, or annuity plan to increase benefits accrued under the plan effective as of any date during the immediately preceding plan year (other than increasing the amount of matching contributions (as defined in subsection (m)(4)(A))), (B) such amendment would not otherwise cause the plan to fail to meet any of the requirements of this subchapter, and (C) such amendment is adopted before the time prescribed by law for filing the return of the employer for the taxable year (including extensions thereof) which includes the date described in subparagraph (A), the employer may elect to treat such amendment as having been adopted as of the last day of the plan year in which the amendment is effective. . (b) Effective date The amendments made by this section shall apply to plan years beginning after the date of the enactment of this Act. 116. Retroactive first year elective deferrals for sole proprietors (a) In general Section 401(b)(2) In the case of an individual who owns the entire interest in an unincorporated trade or business, and who is the only employee of such trade or business, any elective deferrals (as defined in section 402(g)(3)) under a qualified cash or deferred arrangement to which the preceding sentence applies, which are made by such individual before the time for filing the return of such individual for the taxable year (determined without regard to any extensions) ending after or with the end of the plan’s first plan year, shall be treated as having been made before the end of such first plan year. (b) Effective date The amendment made by this section shall apply to plan years beginning after the date of the enactment of this Act. 117. Treasury guidance on rollovers Not later than January 1, 2025, the Secretary of the Treasury or the Secretary’s delegate shall, to simplify, standardize, and facilitate the completion of direct rollovers from retirement plans and trustee-to-trustee transfers from individual retirement plans (as defined in section 7701(a)(37) (1) sample forms for direct rollovers of eligible rollover distributions from a retirement plan to another retirement plan or to an individual retirement plan which— (A) are written in a manner calculated to be understood by the average person, and (B) can be used by both distributing retirement plans and receiving retirement plans and individual retirement plans, and (2) sample forms for trustee-to-trustee transfers of amounts from an individual retirement plan to another individual retirement plan or to a retirement plan which— (A) are written in a manner calculated to be understood by the average person, and (B) can be used by both transferring individual retirement plans and receiving retirement plans and individual retirement plans. 118. Exemption for automatic portability transactions (a) In general Section 4975(d), as amended by this Act, is further amended— (1) by striking or (2) by striking the period at the end of paragraph (24) and inserting , or (3) by adding at the end the following new paragraph: (25) the receipt of fees and compensation by the automatic portability provider in connection with an automatic portability transaction. . (b) Definitions Section 4975(f) (12) Rules relating to automatic portability transactions (A) In general For purposes of subsection (d)(25)— (i) Automatic portability transaction An automatic portability transaction is a transfer of assets made— (I) from an individual retirement plan which is established on behalf of an individual and to which amounts were transferred under section 401(a)(31)(B)(i), (II) to an employer-sponsored retirement plan described in clause (iii), (iv), (v), or (vi) of section 402(c)(8)(B) (other than a defined benefit plan) in which such individual is an active participant, and (III) after such individual has been given advance notice of the transfer and has not affirmatively opted out of such transfer. (ii) Automatic portability provider An automatic portability provider is a person that executes transfers described in clause (i). (B) Conditions for automatic portability transactions Subsection (d)(25) shall not apply to an automatic portability transaction unless the following requirements are satisfied: (i) Acknowledgment of fiduciary status An automatic portability provider shall acknowledge in writing, at such time and format as specified by the Secretary, that the provider is a fiduciary with respect to the individual retirement plan described in subparagraph (A)(i)(I). (ii) Fees The fees and compensation received by the automatic portability provider in connection with the automatic portability transaction (including any increase in such fees or compensation) shall not exceed reasonable compensation and must be fully disclosed to and approved in writing in advance of the transaction by a plan fiduciary of the plan described in subparagraph (A)(i)(II) which is independent of the automatic portability provider. (iii) Data usage The automatic portability provider shall not— (I) market or sell data relating to the individual retirement plan described in subparagraph (A)(i)(I), or (II) use such data for any purpose other than the administration of automatic portability transactions without the express consent of a plan fiduciary which is independent of the automatic portability provider after full disclosure by such provider of how such data will be used. (iv) Open participation The automatic portability provider shall offer automatic portability transactions on the same terms to any plan described in subparagraph (A)(i)(II) regardless of whether the provider provides other services for such plan. (v) Pre-transaction notice At least 30 days in advance of an automatic portability transaction, the automatic portability provider shall provide notice to the individual on whose behalf the individual retirement plan described in subparagraph (A)(i)(I) is established which includes— (I) a description of the automatic portability transaction and the fees which will be charged in connection with the transaction, (II) a description of the individual’s right to affirmatively elect not to participate in the transaction, the procedures for such an election, and a telephone number at which the individual can contact the automatic portability provider, and (III) such other disclosures as the Secretary may require by regulation. (vi) Post-transaction notice Not later than 3 business days after an automatic portability transaction, the automatic portability provider shall provide notice to the individual on whose behalf the individual retirement plan described in subparagraph (A)(i)(I) is established of— (I) the actions taken by the automatic portability provider with respect to the individual’s account, (II) all relevant information regarding the location and amount of any transferred assets, (III) a statement of fees charged against the account by the automatic portability provider or its affiliates in connection with the transfer, (IV) a telephone number at which the individual can contact the automatic portability provider, and (V) such other disclosures as the Secretary may require by regulation. (vii) Notice requirements The notices required under clauses (v) and (vi) shall be written in a manner calculated to be understood by the average intended recipient and shall not include materially misleading statements. (viii) Timeliness of execution After liquidating the assets of an individual retirement plan described in subparagraph (A)(i)(I) to cash, an automatic portability provider shall transfer the account balance of such plan as soon as practicable to the plan described in subparagraph (A)(i)(II). (ix) Record retention and audits (I) In general An automatic portability provider shall, for 6 years, maintain the records sufficient to demonstrate the terms of this subparagraph have been met. (II) Audits An automatic portability provider shall conduct an annual audit, in accordance with regulations promulgated by the Secretary, of automatic portability transactions occurring during the calendar year to demonstrate compliance with this subparagraph, and shall submit such audit annually to the Secretary, in such form and manner as specified by the Secretary. . (c) Regulatory authority Not later than July 1, 2023, the Secretary of the Treasury (or such Secretary's delegate) shall issue such regulations as may be necessary to carry out the purposes of the amendments made by this section, including regulations which— (1) require an automatic portability provider to provide a notice to individuals on whose behalf the individual retirement plan described in paragraph (12)(A)(i)(I) of section 4975(f) (2) restrict the receipt of third party compensation (other than a direct fee by an employer sponsoring a plan which is in lieu of a fee imposed on an individual retirement plan owner) by an automatic portability provider in connection with an automatic portability transaction, (3) prohibit exculpatory provisions in an automatic portability provider’s contracts or communications with individuals disclaiming or limiting its liability in the event that an automatic portability transaction results in an improper transfer, (4) require an automatic portability provider to take actions necessary to reasonably ensure that participant and beneficiary data is current and accurate, and (5) ensure that the appropriate participants and beneficiaries, in fact, receive all the required notices and disclosures until the assets are transferred to a new retirement plan account. Any term used in this subsection which is used in paragraph (12) of section 4975(f) of such Code, as added by this section, has the same meaning as when used in such paragraph. (d) Effective date The amendments made by this section shall apply to transactions occurring after December 31, 2023. 119. Application of section 415 limit for certain employees of rural electric cooperatives (a) In general Section 415(b) (12) Special rule for certain employees of rural electric cooperatives (A) In general Subparagraph (B) of paragraph (1) shall not apply to a participant in an eligible rural electric cooperative plan, except in the case of a participant who was a highly compensated employee (as defined in section 414(q)) of the employer maintaining such plan for the earlier of— (i) the plan year in which the participant terminated employment with such employer, or (ii) the plan year in which distributions commence under the plan with respect to the participant, or for any of the 5 plan years immediately preceding such earlier plan year. (B) Eligible rural electric cooperative plan For purposes of this paragraph— (i) In general The term eligible rural electric cooperative plan (ii) Election An employer maintaining an eligible rural cooperative plan may elect not to have subparagraph (A) apply. (C) Regulations The Secretary shall prescribe such regulations and other guidance as are necessary to limit the application of subparagraph (A) such that it does not result in increased benefits for highly compensated employees. . (b) Effective date The amendment made by this section shall apply to limitation years ending after the date of the enactment of this Act. 120. Insurance-dedicated exchange-traded funds (a) In general Not later than the date which is 7 years after the date of the enactment of this Act, the Secretary of the Treasury (or the Secretary's delegate) shall amend the regulation issued by the Department of the Treasury relating to Income Tax; Diversification Requirements for Variable Annuity, Endowment, and Life Insurance Contracts section 817(d) (b) Designate certain authorized participants and market makers as eligible investors The Secretary of the Treasury (or the Secretary's delegate) shall amend Treas. Reg. section 1.817–5(f)(3) to provide that satisfaction of the requirements in Treas. Reg. section 1.817–5(f)(2)(i) with respect to an exchange-traded fund shall not be prevented by reason of beneficial interests in such a fund being held by 1 or more authorized participants or market makers. (c) Define relevant terms In amending Treas. Reg. section 1.817–5(f)(3) in accordance with subsection (b), the Secretary of the Treasury (or the Secretary's delegate) shall provide definitions consistent with the following: (1) Exchange-traded fund The term exchange-traded fund (A) that is registered with the Securities and Exchange Commission as an open-end investment company or a unit investment trust; (B) the shares of which can be purchased or redeemed directly from the fund only by an authorized participant; and (C) the shares of which are traded throughout the day on a national stock exchange at market prices that may or may not be the same as the net asset value of the shares. (2) Authorized participant The term authorized participant (A) purchasing the shares for its own investment purposes rather than for the exclusive purpose of creating and redeeming such shares on behalf of third parties; and (B) selling the shares to third parties who are not market makers or otherwise described in Treas. Reg. section 1.817–5(f) (1) and (3). (3) Market maker The term market maker (d) Effective date This section shall apply to segregated asset account investments made on or after the date which is 7 years after the date of the enactment of this Act. 121. Modification of age requirement for qualified ABLE programs (a) In general Section 529A(e) age 26 age 46 (b) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2025. 122. Assist savers in recovering unclaimed savings bonds Section 3105 of title 31, United States Code, is amended by adding at the end the following: (f) (1) The Secretary shall provide each State, in digital or other electronic form (including digital images), with all information concerning any applicable savings bond which is registered to an owner with a last known address that is within such State, including the serial number of the bond, the name and last known address of such owner, and all records of any transactions involving such bond. (2) (A) The Secretary shall prescribe such regulations or other guidance as may be necessary to carry out the purposes of this subsection, including rules to— (i) protect the privacy of the owners of applicable savings bonds; and (ii) ensure that any information provided to a State under this subsection shall be used solely to carry out the purposes of this subsection. (B) Any regulations or guidance prescribed by the Secretary pursuant to subparagraph (A) shall not have the effect of prohibiting, restricting, or otherwise preventing a State from obtaining all information described in paragraph (1). (3) Not later than 12 months after the date of enactment of this subsection, and annually thereafter, the Secretary shall submit to the Committee on Appropriations and the Committee on Finance of the Senate a report assessing all efforts to satisfy the requirement under paragraph (1). (4) Any State that receives information described in paragraph (1) with respect to an applicable savings bond may use such information to locate the registered owner of such bond pursuant to the same standards and requirements as are applicable under the abandoned property rules and regulations of such State. (5) For purposes of this subsection, the term applicable savings bond (A) was originally in paper, paperless, or electronic form; and (B) has not been redeemed by the registered owner. . II Retirees 201. Increase in age for required beginning date for mandatory distributions (a) Increase in age for required beginning date (1) In general Subclause (I) of section 401(a)(9)(C)(i) (I) the first calendar year in which the employee attains the applicable age for such calendar year, or . (2) Special rule for owners Subclause (I) of section 401(a)(9)(C)(ii) in which the employee attains age 72 described in clause (i)(I) with respect to the employee (b) Mandatory distribution age Paragraph (9) of section 401(a) (J) Applicable age For purposes of this paragraph— (i) In general The applicable age is— (I) for calendar years before 2032, age 72, and (II) for calendar years after 2031, age 75. (ii) Transition rule If, as of a calendar year, an employee has not attained the applicable age with respect to such year, such employee shall be treated as not having attained the applicable age under this paragraph for such year without regard to whether, in a previous calendar year, the employee had attained the applicable age with respect to such previous calendar year. . (c) Spouse beneficiaries Subclause (I) of section 401(a)(9)(B)(iv) age 72 the applicable age (d) Conforming amendment Subsection (b) of section 408 age 72 the applicable age determined under section 401(a)(9)(J) with respect to such individual (e) Effective date The amendments made by this section shall apply to calendar years beginning after the date of the enactment of this Act. 202. Qualifying longevity annuity contracts (a) In general Not later than the date which is 18 months after the date of the enactment of this Act, the Secretary of the Treasury (or the Secretary's delegate) shall amend the regulation issued by the Department of the Treasury relating to Longevity Annuity Contracts (1) Repeal 25-percent premium limit The Secretary (or delegate) shall amend Q&A–17(b)(3) of Treas. Reg. section 1.401(a)(9)–6 and Q&A–12(b)(3) of Treas. Reg. section 1.408–8 to eliminate the requirement that premiums for qualifying longevity annuity contracts be limited to 25 percent of an individual’s account balance, and to make such corresponding changes to the regulations and related forms as are necessary to reflect the elimination of this requirement. (2) Increase dollar limitation (A) In general The Secretary (or delegate) shall amend Q&A–17(b)(2)(i) of Treas. Reg. section 1.401(a)(9)–6 and Q&A–12(b)(2)(i) of Treas. Reg. section 1.408–8 to increase the dollar limitation on premiums for qualifying longevity annuity contracts from $125,000 to $200,000, and to make such corresponding changes to the regulations and related forms as are necessary to reflect this increase in the dollar limitation. (B) Adjustments for inflation The Secretary (or delegate) shall amend Q&A–17(d)(2)(i) of Treas. Reg. section 1.401(a)(9)–6 to provide that, in the case of calendar years beginning on or after January 1 of the second year following the year of enactment of this Act, the $200,000 dollar limitation (as increased by subparagraph (A)) will be adjusted at the same time and in the same manner as the limits are adjusted under section 415(d) (3) Facilitate joint and survivor benefits The Secretary (or delegate) shall amend Q&A–17(c) of Treas. Reg. section 1.401(a)(9)–6, and make such corresponding changes to the regulations and related forms as are necessary, to provide that, in the case of a qualifying longevity annuity contract which was purchased with joint and survivor annuity benefits for the individual and the individual's spouse which were permissible under the regulations at the time the contract was originally purchased, a divorce occurring after the original purchase and before the annuity payments commence under the contract will not affect the permissibility of the joint and survivor annuity benefits or other benefits under the contract, or require any adjustment to the amount or duration of benefits payable under the contract, provided that any qualified domestic relations order (within the meaning of section 414(p) (A) provides that the former spouse is entitled to the survivor benefits under the contract; (B) does not modify the treatment of the former spouse as the beneficiary under the contract who is entitled to the survivor benefits; or (C) does not modify the treatment of the former spouse as the measuring life for the survivor benefits under the contract. (4) Permit short free look period The Secretary (or delegate) shall amend Q&A–17(a)(4) of Treas. Reg. section 1.401(a)(9)–6 to ensure that such Q&A does not preclude a contract from including a provision under which an employee may rescind the purchase of the contract within a period not exceeding 90 days from the date of purchase. (b) Divorce or separation instrument For purposes of subsection (a)(2), the term divorce or separation instrument (1) a decree of divorce or separate maintenance or a written instrument incident to such a decree; (2) a written separation agreement; or (3) a decree (not described in paragraph (1)) requiring a spouse to make payments for the support or maintenance of the other spouse. (c) Effective dates, enforcement, and interpretations (1) Effective dates (A) Paragraphs (1) and (2) of subsection (a) shall be effective with respect to contracts purchased or received in an exchange on or after the date of the enactment of this Act. (B) Paragraphs (3) and (4) of subsection (a) shall be effective with respect to contracts purchased or received in an exchange on or after July 2, 2014. (2) Enforcement and interpretations Prior to the date on which the Secretary of the Treasury issues final regulations pursuant to subsection (a)— (A) the Secretary (or delegate) shall administer and enforce the law in accordance with subsection (a) and the effective dates in paragraph (1) of this subsection; and (B) taxpayers may rely upon their reasonable good faith interpretations of subsection (a). (d) Regulatory successor provision Any reference to a regulation under this section shall be treated as including a reference to any successor regulation thereto. 203. Remove required minimum distribution barriers for life annuities (a) In general Section 401(a)(9), as amended by this Act, is further amended by adding at the end the following new subparagraph: (K) Certain increases in payments under a commercial annuity Nothing in this section shall prohibit a commercial annuity (within the meaning of section 3405(e)(6)) that is issued in connection with any eligible retirement plan (within the meaning of section 402(c)(8)(B), other than a defined benefit plan) from providing one or more of the following types of payments on or after the annuity starting date: (i) annuity payments that increase by a constant percentage, applied not less frequently than annually, at a rate that is less than 5 percent per year, (ii) a lump sum payment that— (I) results in a shortening of the payment period with respect to an annuity or a full or partial commutation of the future annuity payments, provided that such lump sum is determined using reasonable actuarial methods and assumptions, as determined in good faith by the issuer of the contract, or (II) accelerates the receipt of annuity payments that are scheduled to be received within the ensuing 12 months, regardless of whether such acceleration shortens the payment period with respect to the annuity, reduces the dollar amount of benefits to be paid under the contract, or results in a suspension of annuity payments during the period being accelerated, (iii) an amount which is in the nature of a dividend or similar distribution, provided that the issuer of the contract determines such amount based on a reasonable comparison of the actuarial factors assumed when calculating the initial annuity payments and the issuer’s experience with respect to those factors, or (iv) a final payment upon death that does not exceed the excess of the total amount of the consideration paid for the annuity payments, less the aggregate amount of prior distributions or payments from or under the contract. . (b) Effective date This section shall take effect on the date of the enactment of this Act. 204. Eliminating a penalty on partial annuitization (a) Eliminating a penalty on partial annuitization The Secretary of the Treasury (or the Secretary's delegate) shall amend the regulations under section 401(a)(9) (b) Definitions For purposes of this section— (1) Total required amount The term total required amount (2) Annuity amount The term annuity amount (c) Conforming regulatory amendments The Secretary of the Treasury (or the Secretary's delegate) shall amend the regulations under sections 403(b)(10), 408(a)(6), 408(b)(3), and 457(d)(2) of the Internal Revenue Code of 1986 to conform to the amendments described in subsection (a). Such conforming amendments shall treat all individual retirement plans (as defined in section 7701(a)(37) of such Code) which an individual holds as the owner, or which an individual holds as a beneficiary of the same decedent, as one such plan for purposes of the amendments described in subsection (a). Such conforming amendments shall also treat all contracts described in section 403(b) of such Code which an individual holds as an employee, or which an individual holds as a beneficiary of the same decedent, as one such contract for such purposes. (d) Effective date The modifications and amendments required under subsections (a) and (c) shall be deemed to have been made as of the date of the enactment of this Act, and as of such date— (1) all applicable laws shall be applied in all respects as though the actions which the Secretary of the Treasury (or the Secretary's delegate) is required to take under such subsections had been taken, and (2) until such time as such actions are taken, taxpayers may rely upon their reasonable good faith interpretations of this section. 205. Reduction in excise tax on certain accumulations in qualified retirement plans (a) In general Section 4974(a) 50 percent 25 percent (b) Reduction in excise tax on failures to take required minimum distributions Section 4974 (e) Reduction of tax in certain cases (1) Reduction In the case of a taxpayer who— (A) receives a distribution, during the correction window, of the amount which resulted in imposition of a tax under subsection (a) from the same plan to which such tax relates, and (B) submits a return, during the correction window, reflecting such tax (as modified by this subsection), the first sentence of subsection (a) shall be applied by substituting 10 percent 25 percent (2) Correction window For purposes of this subsection, the term correction window (A) the date of mailing a notice of deficiency with respect to the tax imposed by subsection (a) under section 6212, (B) the date on which the tax imposed by subsection (a) is assessed, or (C) the last day of the second taxable year that begins after the end of the taxable year in which the tax under subsection (a) is imposed. . (c) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 206. Clarification of substantially equal periodic payment rule (a) In general Paragraph (4) of section 72(t) (C) Rollovers to subsequent plan If— (i) payments described in paragraph (2)(A)(iv) are being made from a qualified retirement plan, (ii) a transfer or a rollover from such qualified retirement plan of all or a portion of the taxpayer's benefit under the plan is made to another qualified retirement plan, and (iii) distributions from the transferor and transferee plans would in combination continue to satisfy the requirements of paragraph (2)(A)(iv) if they had been made only from the transferor plan, such transfer or rollover shall not be treated as a modification under subparagraph (A)(ii), and compliance with paragraph (2)(A)(iv) shall be determined on the basis of the combined distributions described in clause (iii). . (b) Nonqualified annuity contracts Paragraph (3) of section 72(q) (1) by redesignating clauses (i) and (ii) of subparagraph (B) as subclauses (I) and (II), and by moving such subclauses 2 ems to the right; (2) by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), by moving such clauses 2 ems to the right, and by adjusting the flush language at the end accordingly; (3) by striking payments payments (A) In general If— ; and (4) by adding at the end the following new subparagraph: (B) Exchanges to subsequent contracts If— (i) payments described in paragraph (2)(D) are being made from an annuity contract, (ii) an exchange of all or a portion of such contract for another contract is made under section 1035, and (iii) the aggregate distributions from the contracts involved in the exchange continue to satisfy the requirements of paragraph (2)(D) as if the exchange had not taken place, such exchange shall not be treated as a modification under subparagraph (A)(ii), and compliance with paragraph (2)(D) shall be determined on the basis of the combined distributions described in clause (iii). . (c) Information reporting Section 6724 (g) Special rule for reporting certain additional taxes No penalty shall be imposed under section 6721 or 6722 if— (1) a person makes a return or report under section 6047(d) or 408(i) with respect to any distribution, (2) such distribution is made following a rollover, transfer, or exchange described in section 72(t)(4)(C) or section 72(q)(3)(C), (3) in making such return or report the person relies upon a certification provided by the taxpayer that the distributions satisfy the requirements of section 72(t)(4)(C)(iii) or section 72(q)(3)(B)(iii), as applicable, and (4) such person does not have actual knowledge that the distributions do not satisfy such requirements. . (d) Safe harbor for annuity payments (1) Qualified retirement plans Subparagraph (A) of section 72(t)(2) For purposes of clause (iv), periodic payments shall not fail to be treated as substantially equal merely because they are amounts received as an annuity, and such periodic payments shall be deemed to be substantially equal if they are payable over a period described in clause (iv) and satisfy the requirements applicable to annuity payments under section 401(a)(9). . (2) Other annuity contracts Paragraph (2) of section 72(q) For purposes of subparagraph (D), periodic payments shall not fail to be treated as substantially equal merely because they are amounts received as an annuity, and such periodic payments shall be deemed to be substantially equal if they are payable over a period described in subparagraph (D) and would satisfy the requirements applicable to annuity payments under section 401(a)(9) if such requirements applied. . (e) Effective dates (1) In general The amendments made by subsections (a), (b), and (c) shall apply to transfers, rollovers, and exchanges occurring on or after the date of the enactment of this Act. (2) Annuity payments The amendment made by subsection (d) shall apply to distributions commencing on or after the date of the enactment of this Act. (3) No inference Nothing in the amendments made by this section shall be construed to create an inference with respect to the law in effect prior to the effective date of such amendments. 207. Recovery of retirement plan overpayments (a) Qualification requirements Section 414 (aa) Special rules applicable to benefit overpayments (1) In general A plan shall not fail to be treated as described in clause (i), (ii), (iii), or (iv) of section 219(g)(5)(A) (and shall not fail to be treated as satisfying the requirements of section 401(a) or 403) merely because— (A) the plan fails to obtain payment from any participant, beneficiary, employer, plan sponsor, fiduciary, or other party on account of any inadvertent benefit overpayment made by the plan, or (B) the plan sponsor amends the plan to increase past or future benefit payments to affected participants and beneficiaries in order to adjust for prior inadvertent benefit overpayments. (2) Reduction in future benefit payments and recovery from responsible party Paragraph (1) shall not fail to apply to a plan merely because, after discovering a benefit overpayment, such plan— (A) reduces future benefit payments to the correct amount provided for under the terms of the plan, or (B) seeks recovery from the person or persons responsible for such overpayment. (3) Employer funding obligations Nothing in this subsection shall relieve an employer of any obligation imposed on it to make contributions to a plan to satisfy the minimum funding standards under sections 412 and 430 or to prevent or restore an impermissible forfeiture in accordance with section 411. (4) Observance of benefit limitations Notwithstanding paragraph (1), a plan to which paragraph (1) applies shall observe any limitations imposed on it by section 401(a)(17) or 415. The plan may enforce such limitations using any method approved by the Secretary for recouping benefits previously paid or allocations previously made in excess of such limitations. (5) Coordination with other qualification requirements The Secretary may issue regulations or other guidance of general applicability specifying how benefit overpayments and their recoupment or non-recoupment from a participant or beneficiary shall be taken into account for purposes of satisfying any requirement applicable to a plan to which paragraph (1) applies. . (b) Rollovers Section 402(c) (12) In the case of an inadvertent benefit overpayment from a plan to which section 414(aa)(1) applies which is transferred to an eligible retirement plan by or on behalf of a participant or beneficiary— (A) the portion of such overpayment with respect to which recoupment is not sought on behalf of the plan shall be treated as having been paid in an eligible rollover distribution if the payment would have been an eligible rollover distribution but for being an overpayment, and (B) the portion of such overpayment with respect to which recoupment is sought on behalf of the plan shall be permitted to be returned to such plan and in such case shall be treated as an eligible rollover distribution transferred to such plan by the participant or beneficiary who received such overpayment (and the plans making and receiving such transfer shall be treated as permitting such transfer). . (c) Effective date The amendments made by this section shall apply to plan years beginning after the date of the enactment of this Act. (d) Certain actions before effective date Plans, fiduciaries, employers, and plan sponsors are entitled to rely on a reasonable good faith interpretation of then existing administrative guidance for inadvertent benefit overpayment recoupments and recoveries that commenced before the first day of the first plan year beginning after the date of the enactment of this Act. 208. Retirement Savings Lost and Found (a) Retirement Savings Lost and Found (1) Establishment (A) In general Not later than 3 years after the date of the enactment of this Act, the Secretary of the Treasury, in consultation with the Secretary of Labor, the Secretary of Commerce, and the Director of the Pension Benefit Guaranty Corporation, shall establish an online searchable database (to be managed by the Secretary of the Treasury in accordance with section 7901 Retirement Savings Lost and Found (i) allow an individual to search for information that enables the individual to locate the plan administrator of any plans with respect to which the individual is or was a participant or beneficiary, and to provide contact information for the plan administrator of any plan described in subparagraph (B); (ii) allow the Secretary of the Treasury to assist such an individual in locating any plan of the individual; and (iii) allow the Secretary of the Treasury to make any necessary changes to contact information on record for the plan administrator based on any changes to the plan due to merger or consolidation of the plan with any other plan, division of the plan into two or more plans, bankruptcy, termination, change in name of the plan, change in name or address of the plan administrator, or other causes. The Retirement Savings Lost and Found established under this paragraph shall include information reported under section 7901 of such Code and other relevant information obtained by the Secretary of the Treasury. (B) Plans described A plan described in this subparagraph is a plan to which the vesting standards of section 411 (2) Administration The Retirement Savings Lost and Found established under paragraph (1) shall provide individuals described in paragraph (1)(A) only with the ability to view contact information for the plan administrator of any plan with respect to which the individual is or was a participant or beneficiary, sufficient to allow the individual to locate the individual’s plan in order to recover any benefit owing to the individual under the plan. (3) Safeguarding participant privacy and security (A) In general In establishing the Retirement Savings Lost and Found under paragraph (1), the Secretary of the Treasury, in consultation with the Secretary of Labor, the Secretary of Commerce, and the Director of the Pension Benefit Guaranty Corporation, shall take all necessary and proper precautions to ensure that individuals’ plan information maintained by the Retirement Savings Lost and Found is protected and that persons other than the individual cannot fraudulently claim the benefits to which any individual is entitled, and to allow any individual to opt out of inclusion in the Retirement Savings Lost and Found at the election of the individual. (B) Disclosure The Secretary of the Treasury may, through regulations or other guidance— (i) authorize disclosure to the agencies jointly administering the Retirement Savings Lost and Found of such return information as is necessary to administer the Retirement Savings Lost and Found database, but only to such employees whose official duties with respect to the database require such disclosure, and (ii) authorize disclosure to plan participants and beneficiaries of the contact information for the plan administrator of any plan with respect to which such individuals are or were a participant or beneficiary. (4) Secretary Any reference in this subsection to the Secretary of the Treasury includes such Secretary's delegate. (b) Office of the Retirement Savings Lost and Found (1) In general Subtitle F is amended by adding at the end the following new chapter: 81 Office of the Retirement Savings Lost and Found Sec. 7901. Office of the Retirement Savings Lost and Found. 7901. Office of the Retirement Savings Lost and Found (a) Establishment; responsibilities of Office (1) In general Not later than 2 years after the date of the enactment of this section, the Secretary shall establish within the Department of the Treasury an Office of the Retirement Savings Lost and Found (in this section referred to as the Office (2) Responsibilities of Office The Office shall— (A) carry out subsection (b), (B) maintain the Retirement Savings Lost and Found established under section 208(a) of the Enhancing American Retirement Now Act (C) perform an annual audit of plan information contained in the Retirement Savings Lost and Found and ensure that such information is current and accurate. (b) Certain non-Responsive participants entitled to small benefits (1) General rule (A) Transfer to the Office of the Retirement Savings Lost and Found The administrator of a plan which is not terminated and to which section 401(a)(31)(B) applies shall transfer to the Office the amount required to be transferred under section 401(a)(31)(B)(iv) for a non-responsive participant. (B) Information and payment to the Office Upon making a transfer under subparagraph (A), the plan administrator shall provide such information and certifications as the Office shall specify, including with respect to the transferred amount and the non-responsive participant. (C) Information requirements after transfer In the event that, after a transfer is made under subparagraph (A), the relevant non-responsive participant contacts the plan administrator or the plan administrator discovers information that may assist the Office in locating the non-responsive participant, the plan administrator shall notify and provide such information as the Office shall specify to the Office. (D) Search and payment by the Office following transfer The Office shall periodically, and upon receiving information described in subparagraph (C), conduct a search for the non-responsive participant for whom the Office has received a transfer under subparagraph (A). Upon location of a non-responsive participant who claims benefits, the Office shall make a single payment to the non-responsive participant in an amount equal to the sum of— (i) the amount transferred to the Office under subparagraph (A) for such participant, and (ii) any earnings on the amount described in clause (i) (2) Definition For purposes of this subsection, the term non-responsive participant (A) who is entitled to a benefit subject to a mandatory transfer under section 401(a)(31)(B)(iii), and (B) for whom the plan has satisfied the conditions in section 401(a)(31)(B)(iv). (3) Regulatory Authority The Secretary shall prescribe such regulations as are necessary to carry out the purposes of this section, including rules relating to the amount payable to the Office and the amount to be paid by the Office. (c) Information collection Within such period after the end of a plan year as the Secretary may by regulations prescribe, the administrator of a plan to which the vesting standards of section 411 apply shall submit to the Office in such form as the Secretary may require— (1) the information described in paragraphs (1) through (4) of section 6057(b), (2) the information described in subparagraphs (A), (B), (E), and (F) of section 6057(a)(2), and (3) such other information as the Secretary may require. (d) Effective date The requirements of subsections (b) and (c) shall apply with respect to plan years beginning after the second December 31 occurring after the date of the enactment of this section. (e) Establishment of fund (1) In general A fund shall be established within the Treasury for the payment of benefits under subsection (b)(1)(D). Such fund shall be credited with the appropriate— (A) amounts transferred to the Office of the Retirement Savings Lost and Found under subsection (b)(1)(A), and (B) earnings on investments of the fund or on assets credited to the fund. (2) Investment of funds Whenever the Secretary determines that the moneys of any fund are in excess of current needs, the Secretary may invest such amounts as the Secretary determines advisable in obligations issued or guaranteed by the United States. . (2) Conforming amendment The table of chapters for subtitle F is amended by adding at the end the following new item: Chapter 81—Office of the Retirement Savings Lost and Found . (c) Mandatory transfers of rollover distributions (1) Cap Sections 401(a)(31)(B)(ii) 411(a)(11)(A) $5,000 $6,000 (2) Distribution of larger amounts to individual retirement plans only Section 401(a)(31)(B)(i) The Retirement Savings Lost and Found established by section 208 of the Enhancing American Retirement Now Act (3) Lesser amounts Section 401(a)(31)(B) (iii) Treatment of lesser amounts In the case of a trust which is part of an eligible plan, such trust shall not be a qualified trust under this section unless such plan provides that, if a participant in the plan separates from the service covered by the plan and the nonforfeitable accrued benefit described in clause (ii) is not in excess of $1,000, the plan administrator shall (either separately or as part of the notice under section 402(f)) notify the participant that the participant is entitled to such benefit or attempt to pay the benefit directly to the participant. (iv) Transfers to Retirement Savings Lost and Found If, after a plan administrator takes the action required under clause (iii), the participant does not— (I) within 6 months of the notification under such clause, make an election under subparagraph (A) or elect to receive a distribution of the benefit directly, or (II) accept any direct payment made under such clause within 6 months of the attempted payment, the plan administrator shall transfer the amount of such benefit to the Office of the Retirement Savings Lost and Found in accordance with section 7901. (v) Income tax treatment of transfers to Retirement Savings Lost and Found For purposes of determining the income tax treatment of transfers to the Office of the Retirement Savings Lost and Found under clause (iv)— (I) such a transfer shall be treated as a transfer to an individual retirement plan under clause (i), and (II) the distribution of such amounts by the Office of the Retirement Savings Lost and Found shall be treated as a distribution from an individual retirement plan. . (4) Effective date The amendments made by this subsection shall apply to vested benefits with respect to participants who separate from service connected to the plan in plan years beginning after the second December 31 occurring after the date of the enactment of this Act. (d) Better reporting for mandatory transfers (1) In general Paragraph (2) of section 6057(a) (A) in subparagraph (C)— (i) by striking during such plan year during the plan year immediately preceding such plan year (ii) by adding and (iii) by striking clause (iii); (B) by redesignating subparagraph (E) as subparagraph (G); (C) by striking and (D) by inserting after subparagraph (D) the following new subparagraphs: (E) the name and taxpayer identifying number of each participant or former participant in the plan— (i) who, during the current plan year or any previous plan year, was reported under subparagraph (C), and with respect to whom the benefits described in subparagraph (C)(ii) were fully paid during the plan year, (ii) with respect to whom any amount was distributed under section 401(a)(31)(B) during the plan year, or (iii) with respect to whom a deferred annuity contract was distributed during the plan year, (F) in the case of a participant or former participant to whom subparagraph (E) applies— (i) in the case of a participant described in clause (ii) thereof, the name and address of the designated trustee or issuer described in section 401(a)(31)(B)(i) and the account number of the individual retirement plan to which the amount was distributed, and (ii) in the case of a participant described in clause (iii) thereof, the name and address of the issuer of such annuity contract and the contract or certificate number, and . (2) Rules relating to direct trustee-to-trustee transfers (A) In general Paragraph (6) of section 402(e) (i) by striking transfers transfers (A) In general Any ; and (ii) by adding at the end the following new subparagraph: (B) Notification of trustee In the case of a distribution under section 401(a)(31)(B), the plan administrator shall notify the designated trustee or issuer described in clause (i) thereof that the transfer is a mandatory distribution required by such section. . (B) Penalty Subsection (i) of section 6652 (i) by striking to recipients or notification (ii) by striking 402(f), 402(f) or a notification as required by section 402(e)(6)(B), (iii) by striking such written explanation such written explanation or notification (C) Reports Subsection (i) of section 408 (i) by redesignating subparagraphs (A) and (B) of paragraph (2) as clauses (i) and (ii), respectively, and by moving such clauses 2 ems to the right; (ii) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively, and by moving such subparagraphs 2 ems to the right; and (iii) by striking as the Secretary prescribes a simple retirement account (3) Simple retirement accounts In the case of a simple retirement account ; (iv) by striking Reports Reports.— (1) In general The trustee of ; (v) by striking under paragraph (2) under paragraph (1)(B) (vi) by inserting after paragraph (1)(B)(ii), as redesignated by the preceding clauses, the following new paragraph: (2) Mandatory distributions In the case of an account, contract, or annuity to which a transfer under section 401(a)(31)(B) is made (including a transfer from the individual retirement plan to which the original transfer under such section was made to another individual retirement plan), the report required by this subsection for the year of the transfer and any year in which the information previously reported in subparagraph (B) changes shall— (A) identify such transfer as a mandatory distribution required by such section, and (B) include the name, address, and taxpayer identifying number of the trustee or issuer of the individual retirement plan to which the amount is transferred. . (3) Notification of participants upon separation Subsection (e) of section 6057 , and, with respect to any benefit of the individual subject to section 401(a)(31)(B), a notice of availability of, and the contact information for, the Retirement Savings Lost and Found established under section 208(a) of the Enhancing American Retirement Now Act (4) Effective date The amendments made by this subsection shall apply to distributions made in, and returns and reports relating to, years beginning after the second December 31 occurring after the date of the enactment of this Act. (e) Requirement of electronic filing (1) In general Paragraph (2) of section 6011(e) (A) by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively, and by moving such clauses 2 ems to the right; (B) by striking regulations regulations (A) In general In prescribing ; and (C) by adding at the end the following new subparagraph: (C) Exceptions Notwithstanding subparagraph (A), the Secretary shall require returns or reports required under— (i) sections 6057, 6058, and 6059, and (ii) sections 408(i), 6041, and 6047 to the extent such return or report relates to the tax treatment of a distribution from a plan, account, contract, or annuity, to be filed on magnetic media, but only with respect to persons who are required to file at least 50 returns during the calendar year which includes the first day of the plan year to which such returns or reports relate. . (2) Effective date The amendments made by this subsection shall apply to returns and reports relating to years beginning after the second December 31 occurring after the date of the enactment of this Act. 209. Roth plan distribution rules (a) In general Subsection (d) of section 402A (5) Mandatory distribution rules not to apply before death Notwithstanding sections 403(b)(10) and 457(d)(2), the following provisions shall not apply to any designated Roth account: (A) Section 401(a)(9)(A). (B) The incidental death benefit requirements of section 401(a). . (b) Effective date (1) In general Except as provided in paragraph (2), the amendment made by this section shall apply to taxable years beginning after December 31, 2023. (2) Special rule The amendment made by this section shall not apply to distributions which are required with respect to years beginning before January 1, 2024, but are permitted to be paid on or after such date. 210. One-time election for qualified charitable distribution to split-interest entity; increase in qualified charitable distribution limitation (a) One-time election for qualified charitable distribution to split-interest entity Section 408(d)(8) (F) One-time election for qualified charitable distribution to split-interest entity (i) In general A taxpayer may for a taxable year elect under this subparagraph to treat as meeting the requirement of subparagraph (B)(i) any distribution from an individual retirement account which is made directly by the trustee to a split-interest entity, but only if— (I) an election is not in effect under this subparagraph for a preceding taxable year, (II) the aggregate amount of distributions of the taxpayer with respect to which an election under this subparagraph is made does not exceed $50,000, and (III) such distribution meets the requirements of clauses (iii) and (iv). (ii) Split-interest entity For purposes of this subparagraph, the term split-interest entity (I) a charitable remainder annuity trust (as defined in section 664(d)(1)), but only if such trust is funded exclusively by qualified charitable distributions, (II) a charitable remainder unitrust (as defined in section 664(d)(2)), but only if such unitrust is funded exclusively by qualified charitable distributions, or (III) a charitable gift annuity (as defined in section 501(m)(5)), but only if such annuity is funded exclusively by qualified charitable distributions and commences fixed payments of 5 percent or greater not later than 1 year from the date of funding. (iii) Contributions must be otherwise deductible A distribution meets the requirements of this clause only if— (I) in the case of a distribution to a charitable remainder annuity trust or a charitable remainder unitrust, a deduction for the entire value of the remainder interest in the distribution for the benefit of a specified charitable organization would be allowable under section 170 (determined without regard to subsection (b) thereof and this paragraph), and (II) in the case of a charitable gift annuity, a deduction in an amount equal to the amount of the distribution reduced by the value of the annuity described in section 501(m)(5)(B) would be allowable under section 170 (determined without regard to subsection (b) thereof and this paragraph). (iv) Limitation on income interests A distribution meets the requirements of this clause only if— (I) no person holds an income interest in the split-interest entity other than the individual for whose benefit such account is maintained, the spouse of such individual, or both, and (II) the income interest in the split-interest entity is nonassignable. (v) Special rules (I) Charitable remainder trusts Notwithstanding section 664(b), distributions made from a trust described in subclause (I) or (II) of clause (ii) shall be treated as ordinary income in the hands of the beneficiary to whom the annuity described in section 664(d)(1)(A) or the payment described in section 664(d)(2)(A) is paid. (II) Charitable gift annuities Qualified charitable distributions made to fund a charitable gift annuity shall not be treated as an investment in the contract for purposes of section 72(c). . (b) Inflation adjustment Section 408(d)(8), as amended by subsection (a), is further amended by adding at the end the following new subparagraph: (G) Inflation adjustment (i) In general In the case of any taxable year beginning after 2023, each of the dollar amounts in subparagraphs (A) and (F) shall be increased by an amount equal to— (I) such dollar amount, multiplied by (II) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting calendar year 2022 calendar year 2016 (ii) Rounding If any dollar amount increased under clause (i) is not a multiple of $1,000, such dollar amount shall be rounded to the nearest multiple of $1,000. . (c) Effective date The amendment made by this section shall apply to distributions made in taxable years beginning after the date of the enactment of this Act. 211. Exception to penalty on early distributions from qualified plans for individuals with a terminal illness (a) In general Section 72(t)(2), as amended by this Act, is further amended by adding at the end the following new subparagraph: (K) Terminal illness (i) In general Distributions which are made to the employee who is a terminally ill individual on or after the date on which such employee has been certified by a physician as having a terminal illness. (ii) Definition For purposes of this subparagraph, the term terminally ill individual 84 months 24 months (iii) Documentation For purposes of this subparagraph, an employee shall not be considered to be a terminally ill individual unless such employee furnishes sufficient evidence to the plan administrator in such form and manner as the Secretary may require. . (b) Effective date The amendment made by this section shall apply to distributions made after the date of the enactment of this Act. 212. Surviving spouse election to be treated as employee (a) In general Section 401(a)(9)(B)(iv), as amended by this Act, is further amended to read as follows: (iv) Special rule for surviving spouse of employee If the designated beneficiary referred to in clause (iii)(I) is the surviving spouse of the employee and the surviving spouse elects the treatment in this clause— (I) the regulations referred to in clause (iii)(II) shall treat the surviving spouse as if the surviving spouse were the employee, (II) the date on which the distributions are required to begin under clause (iii)(III) shall not be earlier than the date on which the employee would have attained the applicable age, and (III) if the surviving spouse dies before the distributions to such spouse begin, this subparagraph shall be applied as if the surviving spouse is the employee. An election described in this clause shall be made at such time and in such manner as prescribed by the Secretary, shall include a timely notice to the plan administrator, and once made may not be revoked except with the consent of the Secretary. . (b) Extension of election of at least as rapidly rule The Secretary shall amend Q&A–5(a) of Treasury Regulation section 1.401(a)(9)-5 (or any successor regulation thereto) to provide that if the surviving spouse is the employee’s sole designated beneficiary and the spouse elects treatment under section 401(a)(9)(B)(iv), then the applicable distribution period for distribution calendar years after the distribution calendar year including the employee’s date of death is determined under the uniform lifetime table. (c) Effective date The amendments made by this section shall apply to calendar years beginning after December 31, 2023. 213. Long-term care contracts purchased with retirement plan distributions (a) In general Section 401(a) (39) Qualified long-term care distributions (A) In general A trust forming part of a defined contribution plan shall not be treated as failing to constitute a qualified trust under this section solely by reason of allowing qualified long-term care distributions. (B) Qualified long-term care distribution For purposes of this paragraph— (i) In general The term qualified long-term care distribution (I) the amount paid by or assessed to the participant during the taxable year for or with respect to certified long-term care insurance for the participant or the participant’s spouse (or other family member of the participant as provided by the Secretary by regulation), or (II) $2,500. (ii) Adjustment for inflation In the case of taxable years beginning after December 31, 2024, the $2,500 amount in clause (i)(II) shall be increased by an amount equal to— (I) such dollar amount, multiplied by (II) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting calendar year 2023 calendar year 2016 If any increase under the preceding sentence is not a multiple of $100, such amount shall be rounded to the nearest multiple of $100. (C) Certified long-term care insurance The term certified long-term care insurance (i) a qualified long-term care insurance contract (as defined in section 7702B(b)) covering qualified long-term care services (as defined in section 7702B(c)), (ii) coverage of the risk that an insured individual would become a chronically ill individual (within the meaning of section 101(g)(4)(B)) under a rider or other provision of a life insurance contract which satisfies the requirements of section 101(g)(3) (determined without regard to subparagraph (D) thereof), or (iii) coverage of qualified long-term care services (as so defined) under a rider or other provision of an insurance or annuity contract which is treated as a separate contract under section 7702B(e) and satisfies the requirements of section 7702B(g), if such coverage provides meaningful financial assistance in the event the insured needs home-based or nursing home care. For purposes of the preceding sentence, coverage shall not be deemed to provide meaningful financial assistance unless benefits are adjusted for inflation and consumer protections are provided, including protection in the event the coverage is terminated. (D) Distributions must otherwise be includible Rules similar to the rules of section 402(l)(3) shall apply for purposes of this paragraph. (E) Long-term care premium statement (i) In general No distribution shall be treated as a qualified long-term care distribution unless a long-term care premium statement with respect to the participant has been filed with the plan. (ii) Long-term care premium statement For purposes of this paragraph, a long-term care premium statement is a statement provided by the issuer of long-term care coverage, upon request by the owner of such coverage, which includes— (I) the name and taxpayer identification number of such issuer, (II) a statement that the coverage is certified long-term care insurance, (III) identification of the participant as the owner of such coverage, (IV) identification of the individual covered and such individual's relationship to the participant, (V) the premiums owed for the coverage for the calendar year, and (VI) such other information as the Secretary may require. (iii) Filing with Secretary A long-term care premium statement will be accepted only if the issuer has completed a disclosure to the Secretary for the specific coverage product to which the statement relates. Such disclosure shall identify the issuer, type of coverage, and such other information as the Secretary may require which is included in the filing of the product with the applicable State authority. . (b) Conforming amendments (1) Section 401(k)(2)(B)(i) or or (VII) as provided in section 401(a)(39), . (2) Section 403(a) (6) Qualified long-term care distributions An annuity contract shall not fail to be subject to this subsection solely by reason of allowing distributions to which section 401(a)(39) applies. . (3) Section 403(b)(11) or , or (E) for distributions to which section 401(a)(39) applies. . (4) Section 457(d)(1)(A) or , or (v) as provided in section 401(a)(39), . (c) Exemption from additional tax on early distributions Section 72(t)(2), as amended by this Act, is further amended by adding at the end the following new subparagraph: (L) Qualified long-term care distributions (i) In general Any qualified long-term care distribution which meets the requirements of section 401(a)(39). (ii) Exception If the individual covered by the long-term care coverage to which such distribution relates is the spouse of the participant in the plan, clause (i) shall apply only if the participant and the participant's spouse file a joint return. (iii) Exemption of distributions from trustee to trustee transfer and withholding rules For purposes of sections 401(a)(31), 402(f), and 3405, a qualified long-term care distribution shall not be treated as an eligible rollover distribution. . (d) Reporting (1) In general Subpart B of part III of subchapter A of chapter 61 6050Z. Reports relating to long-term care premium statements (a) Requirement of reporting Any issuer of certified long-term care insurance (as defined in section 401(a)(39)(C)) who provides a long-term care premium statement to any purchaser pursuant to section 401(a)(39)(E) for a calendar year, shall make a return not later than February 1 of the succeeding calendar year, according to forms or regulations prescribed by the Secretary, setting forth with respect to each such purchaser— (1) the name and taxpayer identification number of such issuer, (2) a statement that the coverage is certified long-term care insurance as defined in section 401(a)(39)(C), (3) the name of the owner of such coverage, (4) identification of the individual covered and such individual's relationship to the owner, (5) the premiums paid for the coverage for the calendar year, and (6) such other information as the Secretary may require. (b) Statement to be furnished to persons with respect to whom information is required Every person required to make a return under subsection (a) shall furnish to each individual whose name is required to be set forth in such return a written statement showing— (1) the name, address, and phone number of the information contact of the issuer of the contract or coverage, and (2) the aggregate amount of premiums and charges paid under the contract or coverage covering the insured individual during the calendar year. The written statement required under the preceding sentence shall be furnished to the individual or individuals on or before January 31 of the year following the calendar year for which the return required under subsection (a) was required to be made. (c) Contracts or coverage covering more than one insured In the case of contracts or coverage covering more than one insured, the return and statement required by subsections (a) and (b) shall identify only the portion of the premium that is properly allocable to the insured in respect of whom the return or statement is made. (d) Statement to be furnished on request If any individual to whom a return is required to be furnished under subsection (b) requests that such a return be furnished at any time before the close of the calendar year, the person required to make the return under subsection (b) shall comply with such request and shall furnish to the Secretary at such time a copy of the return so provided. . (2) Penalties Section 6724(d) (A) in paragraph (1)(B), by adding or (xxviii) section 6050Z (relating to reports relating to long-term care premium statements), and , and (B) in paragraph (2)— (i) by redesignating subparagraph (JJ), relating to section 6050Y, as subparagraph (KK) and moving such subparagraph to the position immediately after subparagraph (JJ), relating to section 6226(a)(2), (ii) by striking or (iii) by striking the period at the end of subparagraph (JJ), relating to section 6226(a)(2), and inserting a comma, (iv) by striking the period at the end of subparagraph (KK), as so redesignated, and inserting , or (v) by inserting after subparagraph (KK), as so redesignated, the following new subparagraph: (LL) section 6050Z (relating to reports relating to long-term care premium statements). . (3) Clerical amendment The table of sections for subpart B of part III of subchapter A of chapter 61 Sec. 6050Z. Reports relating to long-term care premium statements. . (e) Effective date The amendments made by this section shall apply to distributions made after the date which is 3 years after the date of the enactment of this Act. (f) Disclosure to Treasury of long-term care insurance products The Secretary of the Treasury (or the Secretary's delegate) shall issue such forms and guidance as are necessary to collect the filing required by section 401(a)(39)(E)(iii) (g) Treasury website The Secretary of the Treasury (or the Secretary's delegate) shall maintain a website that discloses information regarding long-term care insurance policies, including common policy features, factors to consider in selecting coverage levels, consumer protections, tax rules for premiums and benefits, and the special tax and distribution rules applicable to certified long-term care insurance (as defined in section 401(a)(39)(C) III Public safety officers and military 301. Military spouse retirement plan eligibility credit for small employers (a) In general Subpart D of part IV of subchapter A of chapter 1 45U. Military spouse retirement plan eligibility credit for small employers (a) In general For purposes of section 38, in the case of any eligible small employer, the military spouse retirement plan eligibility credit determined under this section for any taxable year is an amount equal to the sum of— (1) $200 with respect to each military spouse who is an employee of such employer and who is eligible to participate in an eligible defined contribution plan of such employer at any time during such taxable year, plus (2) so much of the contributions made by such employer to all such plans with respect to such employee during such taxable year as do not exceed $300. (b) Limitation An individual shall only be taken into account as a military spouse under subsection (a) for the taxable year which includes the date on which such individual began participating in the eligible defined contribution plan of the employer and the 2 succeeding taxable years. (c) Eligible small employer For purposes of this section, the term eligible small employer (d) Military spouse For purposes of this section— (1) In general The term military spouse (2) Exclusion of highly compensated employees With respect to any employer, the term military spouse (e) Eligible defined contribution plan For purposes of this section, the term eligible defined contribution plan (1) military spouses employed by such employer are eligible to participate in such plan not later than the date which is 2 months after the date on which such individual begins employment with such employer, and (2) military spouses who are eligible to participate in such plan— (A) are immediately eligible to receive an amount of employer contributions under such plan which is not less the amount of such contributions that a similarly situated participant who is not a military spouse would be eligible to receive under such plan after 2 years of service, and (B) immediately have a nonforfeitable right to the employee’s accrued benefit derived from employer contributions under such plan. (f) Aggregation rule All persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as one employer for purposes of this section. . (b) Credit allowed as part of general business credit Section 38(b) plus , plus (34) in the case of an eligible small employer (as defined in section 45U(c)), the military spouse retirement plan eligibility credit determined under section 45U(a). . (c) Specified credit for purposes of certified professional employer organizations Section 3511(d)(2) (F) section 45U (military spouse retirement plan eligibility credit), . (d) Clerical amendment The table of sections for subpart D of part IV of subchapter A of chapter 1 Sec. 45U. Military spouse retirement plan eligibility credit for small employers. . (e) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 302. Distributions to firefighters (a) In general Subparagraph (A) of section 72(t)(10) 414(d)) 414(d)) or a distribution from a plan described in clause (iii), (iv), or (vi) of section 402(c)(8)(B) to an employee who provides firefighting services (b) Conforming amendment The heading of paragraph (10) of section 72(t) in governmental plans and private sector firefighters (c) Effective date The amendments made by this section shall apply to distributions made after the date of the enactment of this Act. 303. Exclusion of certain disability-related first responder retirement payments (a) In general Part III of subchapter B of chapter 1 139C. Certain disability-related first responder retirement payments (a) In general In the case of an individual who receives qualified first responder retirement payments for any taxable year, gross income shall not include so much of such payments as do not exceed the annualized excludable disability amount with respect to such individual. (b) Qualified first responder retirement payments For purposes of this section, the term qualified first responder retirement payments (1) from a plan described in clause (iii), (iv), (v), or (vi) of section 402(c)(8)(B), and (2) in connection with such individual’s qualified first responder service. (c) Annualized excludable disability amount For purposes of this section— (1) In general The term annualized excludable disability amount (2) Service-connected excludable disability amount The term service-connected excludable disability amount (A) are not includible in such individual’s gross income under section 104(a)(1), (B) are received in connection with such individual’s qualified first responder service, and (C) terminate when such individual attains retirement age. (3) Special rule for partial-year payments In the case of an individual who only receives service-connected excludable disability amounts properly attributable to a portion of the 12-month period described in paragraph (1), such paragraph shall be applied by multiplying such amounts by the ratio of 365 to the number of days in such period to which such amounts were properly attributable. (d) Qualified first responder service For purposes of this section, the term qualified first responder service . (b) Clerical amendment The table of sections for part III of subchapter B of chapter 1 Sec. 139C. Certain disability-related first responder retirement payments. . (c) Effective date The amendments made by this section shall apply to amounts received with respect to taxable years beginning after the date of the enactment of this Act. 304. Repeal of direct payment requirement on exclusion from gross income of distributions from governmental plans for health and long-term care insurance (a) In general Section 402(l)(5)(A) (A) Direct payment to insurer permitted (i) In general Paragraph (1) shall apply to a distribution without regard to whether payment of the premiums is made directly to the provider of the accident or health plan or qualified long-term care insurance contract by deduction from a distribution from the eligible retirement plan, or is made to the employee. (ii) Reporting In the case of a payment made to the employee as described in clause (i), the employee shall include with the return of tax for the taxable year in which the distribution is made an attestation that the distribution does not exceed the amount paid by the employee for qualified health insurance premiums for such taxable year. . (b) Effective date The amendment made by this section shall apply to distributions made after the date of the enactment of this Act. 305. Modification of eligible age for exemption from early withdrawal penalty (a) In general Subparagraph (A) of section 72(t)(10), as amended by this Act, is further amended by striking age 50 age 50 or 25 years of service under the plan, whichever is earlier (b) Effective date The amendment made by this section shall apply to distributions made after the date of the enactment of this Act. 306. Exemption from early withdrawal penalty for certain State and local government corrections employees (a) In general Clause (i) of section 72(t)(10)(B) or emergency medical services emergency medical services, or services as a corrections officer or as a forensic security employee providing for the care, custody, and control of forensic patients (b) Effective date The amendment made by this section shall apply to distributions made after the date of the enactment of this Act. IV Nonprofits and educators 401. Enhancement of 403 (b) (a) Permitted investments Subparagraph (A) of section 403(b)(7) if the amounts are to be invested in regulated investment company stock to be held in that custodial account if the amounts are to be held in that custodial account and are invested in regulated investment company stock or a group trust intended to satisfy the requirements of Internal Revenue Service Revenue Ruling 81–100 (or any successor guidance) (b) Conforming amendment The heading of paragraph (7) of section 403(b) for regulated investment company stock (c) Effective date The amendments made by this section shall apply to amounts invested after the date of the enactment of this Act. 402. Hardship withdrawal rules for 403 (b) (a) In general Section 403(b) (15) Special rules relating to hardship withdrawals For purposes of paragraphs (7) and (11)— (A) Amounts which may be withdrawn The following amounts may be distributed upon hardship of the employee: (i) Contributions made pursuant to a salary reduction agreement (within the meaning of section 3121(a)(5)(D)). (ii) Qualified nonelective contributions (as defined in section 401(m)(4)(C)). (iii) Qualified matching contributions described in section 401(k)(3)(D)(ii)(I). (iv) Earnings on any contributions described in clause (i), (ii), or (iii). (B) No requirement to take available loan A distribution shall not be treated as failing to be made upon the hardship of an employee solely because the employee does not take any available loan under the plan. . (b) Conforming amendments (1) Section 403(b)(7)(A)(i)(V) in the case of contributions made pursuant to a salary reduction agreement (within the meaning of section 3121(a)(5)(D)) subject to the provisions of paragraph (15) (2) Paragraph (11) of section 403(b), as amended by this Act, is further amended— (A) by striking in subject to the provisions of paragraph (15), in (B) by striking the last sentence. (c) Effective date The amendments made by this section shall apply to plan years beginning after the date of the enactment of this Act. 403. Multiple employer 403 (b) (a) In general Section 403(b), as amended by this Act, is further amended by adding at the end the following new paragraph: (16) Multiple employer plans (A) In general Except in the case of a church plan, this subsection shall not be treated as failing to apply to an annuity contract solely by reason of such contract being purchased under a plan maintained by more than 1 employer. (B) Treatment of employers failing to meet requirements of plan (i) In general In the case of a plan maintained by more than 1 employer, this subsection shall not be treated as failing to apply to an annuity contract held under such plan merely because of one or more employers failing to meet the requirements of this subsection if such plan satisfies rules similar to the rules of section 413(e)(2) with respect to any such employer failure. (ii) Additional requirements in case of non-governmental plans A plan shall not be treated as meeting the requirements of this subparagraph unless the plan satisfies rules similar to the rules of subparagraph (A) or (B) of section 413(e)(1), except in the case of a multiple employer plan maintained solely by any of the following: A State, a political subdivision of a State, or an agency or instrumentality of any one or more of the foregoing. . (b) Annual registration for 403 (b) Section 6057 (g) 403 (b) In the case of annuity contracts to which this section applies and to which section 403(b) applies by reason of the plan under which such contracts are purchased meeting the requirements of paragraph (16) thereof, such plan shall be treated as a single plan for purposes of this section. . (c) Annual information returns for 403 (b) Section 6058 (f) 403 (b) In the case of annuity contracts to which this section applies and to which section 403(b) applies by reason of the plan under which such contracts are purchased meeting the requirements of paragraph (16) thereof, such plan shall be treated as a single plan for purposes of this section. . (d) Regulations The Secretary of the Treasury (or the Secretary’s delegate) shall prescribe such regulations as may be necessary to clarify, in the case of plans to which section 403(b)(16) (e) Modification of model plan language. etc (1) Plan notifications The Secretary of the Treasury (or the Secretary’s delegate) shall modify the model plan language published under section 413(e)(5) (2) Model plans for multiple employer 403 (b) For plans to which section 403(b)(16)(A) (3) Educational outreach to employers exempt from tax The Secretary of the Treasury (or the Secretary’s delegate) shall provide education and outreach to increase awareness to employers described in section 501(c)(3), and which are exempt from tax under section 501(a), that multiple employer plans are subject to the Employee Retirement Income Security Act of 1974 and that such employer is a plan sponsor with respect to its employees participating in the multiple employer plan and, as such, has certain fiduciary duties with respect to the plan and to its employees. (f) No inference with respect to church plans Regarding any application of section 403(b) (g) Effective date (1) In general The amendments made by this section shall apply to plan years beginning after the date of the enactment of this Act. (2) Rule of construction Nothing in the amendments made by subsection (a) shall be construed as limiting the authority of the Secretary of the Treasury or the Secretary’s delegate (determined without regard to such amendment) to provide for the proper treatment of a failure to meet any requirement applicable under the Internal Revenue Code of 1986 with respect to one employer (and its employees) in the case of a plan to which section 403(b)(16) of such Code applies. V Disaster relief 501. Special rules for use of retirement funds in connection with qualified federally declared disasters (a) Tax-Favored withdrawals from retirement plans (1) In general Paragraph (2) of section 72(t), as amended by this Act, is further amended by adding at the end the following new subparagraph: (M) Distributions from retirement plans in connection with federally declared disasters Any qualified disaster recovery distribution. . (2) Qualified disaster recovery distribution Section 72(t) (11) Qualified disaster recovery distribution For purposes of paragraph (2)(M)— (A) In general Except as provided in subparagraph (B), the term qualified disaster recovery distribution (i) on or after the first day of the incident period of a qualified disaster and before the date that is 180 days after the applicable date with respect to such disaster, and (ii) to an individual whose principal place of abode at any time during the incident period of such qualified disaster is located in the qualified disaster area with respect to such qualified disaster and who has sustained an economic loss by reason of such qualified disaster. (B) Aggregate dollar limitation (i) In general For purposes of this subsection, the aggregate amount of distributions received by an individual which may be treated as qualified disaster recovery distributions with respect to any qualified disaster in all taxable years shall not exceed $22,000. (ii) Treatment of plan distributions If a distribution to an individual would (without regard to clause (i)) be a qualified disaster recovery distribution, a plan shall not be treated as violating any requirement of this title merely because the plan treats such distribution as a qualified disaster recovery distribution, unless the aggregate amount of such distributions from all plans maintained by the employer (and any member of any controlled group which includes the employer) to such individual exceeds $22,000 with respect to the same qualified disaster. (iii) Controlled group For purposes of clause (ii), the term controlled group (C) Amount distributed may be repaid (i) In general Any individual who receives a qualified disaster recovery distribution may, at any time during the 3-year period beginning on the day after the date on which such distribution was received, make one or more contributions in an aggregate amount not to exceed the amount of such distribution to an eligible retirement plan of which such individual is a beneficiary and to which a rollover contribution of such distribution could be made under section 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16), as the case may be. (ii) Treatment of repayments of distributions from eligible retirement plans other than IRAs For purposes of this title, if a contribution is made pursuant to clause (i) with respect to a qualified disaster recovery distribution from a plan other than an individual retirement plan, then the taxpayer shall, to the extent of the amount of the contribution, be treated as having received the qualified disaster recovery distribution in an eligible rollover distribution (as defined in section 402(c)(4)) and as having transferred the amount to the eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution. (iii) Treatment of repayments for distributions from IRAs For purposes of this title, if a contribution is made pursuant to clause (i) with respect to a qualified disaster recovery distribution from an individual retirement plan, then, to the extent of the amount of the contribution, the qualified disaster recovery distribution shall be treated as a distribution described in section 408(d)(3) and as having been transferred to the eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution. (D) Income inclusion spread over 3-year period (i) In general In the case of any qualified disaster recovery distribution, unless the taxpayer elects not to have this subparagraph apply for any taxable year, any amount required to be included in gross income for such taxable year shall be so included ratably over the 3-taxable year period beginning with such taxable year. (ii) Special rule For purposes of clause (i), rules similar to the rules of subparagraph (E) of section 408A(d)(3) shall apply. (E) Qualified disaster For purposes of this paragraph and paragraph (8), the term qualified disaster (F) Other definitions For purposes of this paragraph and paragraph (8)— (i) Qualified disaster area (I) In general The term qualified disaster area (II) Exceptions Such term shall not include any area which is a qualified disaster area solely by reason of section 301 of the Taxpayer Certainty and Disaster Tax Relief Act of 2020. (ii) Incident period The term incident period (iii) Applicable date The term applicable date (I) the date of the enactment of this paragraph, (II) the first day of the incident period with respect to the qualified disaster, or (III) the date of the disaster declaration with respect to the qualified disaster. (iv) Eligible retirement plan The term eligible retirement plan (G) Special rules (i) Exemption of distributions from trustee to trustee transfer and withholding rules For purposes of sections 401(a)(31), 402(f), and 3405, qualified disaster recovery distributions shall not be treated as eligible rollover distributions. (ii) Qualified disaster recovery distributions treated as meeting plan distribution requirements For purposes of this title— (I) a qualified disaster recovery distribution shall be treated as meeting the requirements of sections 401(k)(2)(B)(i), 403(b)(7)(A)(i), 403(b)(11), and 457(d)(1)(A), and (II) in the case of a money purchase pension plan, a qualified disaster recovery distribution which is an in-service withdrawal shall be treated as meeting the requirements of section 401(a) applicable to distributions. . (3) Effective date The amendments made by this subsection shall apply to distributions with respect to disasters the incident period (as defined in section 72(t)(11)(F)(ii) (b) Recontributions of withdrawals for home purchases (1) Individual retirement plans Paragraph (8) of section 72(t) (F) Recontributions (i) General rule (I) In general Any individual who received a qualified distribution may, during the applicable period, make one or more contributions in an aggregate amount not to exceed the amount of such qualified distribution to an eligible retirement plan (as defined in section 402(c)(8)(B)) of which such individual is a beneficiary and to which a rollover contribution of such distribution could be made under section 402(c), 403(a)(4), 403(b)(8), or 408(d)(3), as the case may be. (II) Treatment of repayments Rules similar to the rules of clauses (ii) and (iii) of paragraph (11)(C) shall apply for purposes of this subsection. (ii) Qualified distribution For purposes of this subparagraph, the term qualified distribution (I) which is a qualified first-time homebuyer distribution, (II) which was to be used to purchase or construct a principal residence in a qualified disaster area, but which was not so used on account of the qualified disaster with respect to such area, and (III) which was received during the period beginning on the date which is 180 days before the first day of the incident period of such qualified disaster and ending on the date which is 30 days after the last day of such incident period. (iii) Applicable period For purposes of this subparagraph, the term applicable period . (2) Qualified plans Subsection (c) of section 402, as amended by this Act, is further amended by adding at the end the following new paragraph: (13) Recontributions of withdrawals for home purchases (A) General rule (i) In general Any individual who received a qualified distribution may, during the applicable period, make one or more contributions in an aggregate amount not to exceed the amount of such qualified distribution to an eligible retirement plan (as defined in paragraph (8)(B)) of which such individual is a beneficiary and to which a rollover contribution of such distribution could be made under subsection (c) or section 403(a)(4), 403(b)(8), or 408(d)(3), as the case may be. (ii) Treatment of repayments Rules similar to the rules of clauses (ii) and (iii) of section 72(t)(11)(C) shall apply for purposes of this subsection. (B) Qualified distribution For purposes of this paragraph, the term qualified distribution (i) described in section 401(k)(2)(B)(i)(IV), 403(b)(7)(A)(i)(V), or 403(b)(11)(B), (ii) which was to be used to purchase or construct a principal residence in a qualified disaster area, but which was not so used on account of the qualified disaster with respect to such area, and (iii) which was received during the period beginning on the date which is 180 days before the first day of the incident period of such qualified disaster and ending on the date which is 30 days after the last day of such incident period. (C) Definitions For purposes of this paragraph— (i) the terms qualified disaster qualified disaster area incident period (ii) the term applicable period . (3) Effective date The amendments made by this subsection shall apply to recontributions of withdrawals for home purchases with respect to disasters the incident period (as defined in section 72(t)(11)(F)(ii) (c) Loans from qualified plans (1) In general Subsection (p) of section 72 (6) Increase in limit on loans not treated as distributions (A) In general In the case of any loan from a qualified employer plan to a qualified individual made during the applicable period— (i) clause (i) of paragraph (2)(A) shall be applied by substituting $100,000 $50,000 (ii) clause (ii) of such paragraph shall be applied by substituting the present value of the nonforfeitable accrued benefit of the employee under the plan one-half of the present value of the nonforfeitable accrued benefit of the employee under the plan (B) Delay of repayment In the case of a qualified individual with respect to any qualified disaster with an outstanding loan from a qualified employer plan on or after the applicable date with respect to the qualified disaster— (i) if the due date pursuant to subparagraph (B) or (C) of paragraph (2) for any repayment with respect to such loan occurs during the period beginning on the first day of the incident period of such qualified disaster and ending on the date which is 180 days after the last day of such incident period, such due date may be delayed for 1 year, (ii) any subsequent repayments with respect to any such loan may be appropriately adjusted to reflect the delay in the due date under clause (i) and any interest accruing during such delay, and (iii) in determining the 5-year period and the term of a loan under subparagraph (B) or (C) of paragraph (2), the period described in clause (i) may be disregarded. (C) Definitions For purposes of this paragraph— (i) Qualified individual The term qualified individual (I) whose principal place of abode at any time during the incident period of any qualified disaster is located in the qualified disaster area with respect to such qualified disaster, and (II) who has sustained an economic loss by reason of such qualified disaster. (ii) Applicable period The applicable period with respect to any disaster is the period— (I) beginning on the applicable date with respect to such disaster, and (II) ending on the date that is 180 days after such applicable date. (iii) Other terms For purposes of this paragraph— (I) the terms applicable date qualified disaster qualified disaster area incident period (II) the term applicable period . (2) Effective date The amendment made by paragraph (1) shall apply to plan loans made with respect to disasters the incident period (as defined in section 72(t)(11)(F)(ii) (d) GAO Report The Comptroller General of the United States shall submit a report to the Committees on Finance and Health, Education, Labor and Pensions of the Senate and the Committees on Ways and Means and Education and Labor of the House of Representatives on taxpayer utilization of the retirement disaster relief permitted by the amendments made by this section and or permitted by prior legislation, including a comparison of utilization by higher and lower income taxpayers and whether the $22,000 threshold on distributions provides adequate relief for taxpayers who suffer from a disaster. VI Employer plans 601. Credit for employers with respect to modified safe harbor requirements (a) In general Subpart D of part IV of subchapter A of chapter 1, as amended by this Act, is further amended by adding at the end the following new section: 45V. Credit for small employers with respect to modified safe harbor requirements for automatic contribution arrangements (a) General rule For purposes of section 38, in the case of a small employer, the safe harbor adoption credit determined under this section for any taxable year is the amount equal to the total of the employer’s matching contributions under section 401(k)(16)(D) during the taxable year on behalf of employees who are not highly compensated employees. (b) Limitations (1) Limitation with respect to compensation The credit determined under subsection (a) with respect to contributions made on behalf of any employee shall not exceed 2 percent of the compensation of such employee for the taxable year. (2) Limitation with respect to years of participation A credit shall be determined under subsection (a) with respect to contributions made on behalf of any employee only during the first 5 years such employee participates in the secure deferral arrangement. (c) Definitions (1) In general Any term used in this section which is also used in section 401(k)(16) shall have the same meaning as when used in such section. (2) Small employer The term small employer (d) Special rules (1) Aggregation rules For purposes of this section, all persons treated as a single employer under subsection (a) or (b) of section 52, or subsection (m) or (o) of section 414, shall be treated as one person and all plans of the employer shall be treated as 1 eligible plan. (2) Denial of double benefit No deduction shall be allowable under this title for any contribution with respect to which a credit is allowed under this section. (3) Election not to claim credit This section shall not apply to a taxpayer for any taxable year if such taxpayer elects to have this section not apply for such taxable year. . (b) Credit to be part of general business credit Subsection (b) of section 38, as amended by this Act, is further amended by striking plus , plus (35) the safe harbor adoption credit determined under section 45V. . (c) Treatment of credit for certified professional employer organizations Paragraph (2) of section 3511(d), as amended by this Act, is further amended— (1) by redesignating subparagraphs (G), (H), and (I) as subparagraphs (H), (I), and (J), respectively, and (2) by inserting after subparagraph (F) the following new subparagraph: (G) section 45V (safe harbor adoption credit), . (d) Clerical amendment The table of sections for subpart D of part IV of subchapter A of chapter 1, as amended by this Act, is further amended by inserting after the item relating to section 45U the following new item: Sec. 45V. Credit for small employers with respect to modified safe harbor requirements for automatic contribution arrangements. . (e) Effective date The amendments made by this section shall apply to taxable years which include any portion of a plan year beginning after December 31, 2023. 602. Application of top heavy rules to defined contribution plans covering excludable employees (a) In general Paragraph (2) of section 416(c) (C) Application to employees not meeting age and service requirements Any employees not meeting the age or service requirements of section 410(a)(1) (without regard to subparagraph (B) thereof) may be excluded from consideration in determining whether any plan of the employer meets the requirements of subparagraphs (A) and (B). . (b) Effective date The amendment made by subsection (a) shall apply to plan years beginning after the date of the enactment of this Act. 603. Increase in credit limitation for small employer pension plan startup costs of certain employers (a) In general Subsection (a) of section 45E (75 percent of such costs in the case of an eligible employer, as determined by substituting 25 100 (b) Treatment of credit for certified professional employer organizations Paragraph (2) of section 3511(d), as amended by this Act, is further amended— (1) by redesignating subparagraphs (E), (F), (G), (H), (I), and (J) as subparagraphs (F), (G), (H), (I), (J), and (K), respectively, and (2) by inserting after subparagraph (D) the following new subparagraph: (E) section 45E (small employer pension plan startup cost credit), . (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2023. 604. Expansion of Employee Plans Compliance Resolution System (a) In general Except as otherwise provided in guidance prescribed by the Secretary of the Treasury or the Secretary's delegate (referred to in this section as the Secretary EPCRS (b) Loan errors In the case of an eligible inadvertent failure relating to a loan from a plan to a participant, such failure may be self-corrected under subsection (a) according to the rules of section 6.07 of Revenue Procedure 2021–30 (or any successor guidance), including the provisions related to whether a deemed distribution must be reported on Form 1099–R. (c) EPCRS for IRAs The Secretary shall expand the EPCRS to allow custodians of individual retirement plans (as defined in section 7701(a)(37) (1) waivers of the excise tax which would otherwise apply under section 4974 (2) rules permitting a nonspouse beneficiary to return distributions to an inherited individual retirement plan described in section 408(d)(3)(C) (d) Correction methods for eligible inadvertent failures The Secretary shall issue guidance on correction methods that are required to be used to correct eligible inadvertent failures, including general principles of correction if a specific correction method is not specified by the Secretary. (e) Eligible inadvertent failure For purposes of this section— (1) In general Except as provided in paragraph (2), the term eligible inadvertent failure (A) satisfy the standards set forth in section 4.04 of Revenue Procedure 2021–30 (or any successor guidance), or (B) satisfy similar standards in the case of an individual retirement plan. (2) Exception The term eligible inadvertent failure (f) Deadline Any guidance, or revision to any such guidance, required by this section shall be promulgated not later than the date which is 2 years after the date of the enactment of this Act. 605. Application of credit for small employer pension plan startup costs to employers which join an existing plan (a) In general Section 45E(d)(3)(A) effective effective with respect to the eligible employer (b) Effective date The amendment made by this section shall apply to eligible employer plans which become effective with respect to the eligible employer after the date of the enactment of this Act. 606. Safe harbor for corrections of employee elective deferral failures The Secretary of the Treasury shall modify Appendix A.05(8) of Revenue Procedure 2021-30 (the Employee Plans Compliance Resolution System, or EPCRS) not later than December 31, 2023— (1) to provide that the special safe harbor correction method provided in Appendix A.05(8) for failures related to automatic contribution features in a section 401(k) plan or a section 403(b) plan is not limited to failures that begin on or before December 31, 2023, and (2) to clarify that EPCRS correction methods for failures related to automatic contribution features that require notices to a participant can be satisfied without regard to whether the participant remains employed at the time corrections are made. 607. Reform of family attribution rule (a) In general Section 414 (1) in subsection (b)— (A) by striking For purposes of (1) In general For purposes of , and (B) by adding at the end the following new paragraphs: (2) Special rules for applying family attribution For purposes of applying the attribution rules under section 1563 with respect to paragraph (1), the following rules apply: (A) Community property laws shall be disregarded for purposes of determining ownership. (B) Except as provided by the Secretary, stock of an individual not attributed under section 1563(e)(5) to such individual’s spouse shall not be attributed to such spouse by reason of the combined application of paragraphs (1) and (6)(A) of section 1563(e). (C) Except as provided by the Secretary, in the case of stock in different corporations that is attributed to a child under section 1563(e)(6)(A) from each parent, and is not attributed to such parents as spouses under section 1563(e)(5), such attribution to the child shall not by itself result in such corporations being members of the same controlled group. (3) Plan shall not fail to be treated as satisfying this section If application of paragraph (2) causes 2 or more entities to be a controlled group or to no longer be in a controlled group, such change shall be treated as a transaction to which section 410(b)(6)(C) applies. , and (2) in subsection (m)(6)(B)— (A) by striking Ownership.— Ownership.— (i) In general In determining , (B) by adding at the end the following new clauses: (ii) Special rules for applying family attribution For purposes of applying the attribution rules under section 318 with respect to clause (i), the following rules apply: (I) Community property laws shall be disregarded for purposes of determining ownership. (II) Except as provided by the Secretary, stock of an individual not attributed under section 318(a)(1)(A)(i) to such individual’s spouse shall not be attributed by reason of the combined application of paragraphs (1)(A)(ii) and (4) of section 318(a) to such spouse from a child who has not attained the age of 21 years. (III) Except as provided by the Secretary, in the case of stock in different organizations which is attributed under section 318(a)(1)(A)(ii) from each parent to a child who has not attained the age of 21 years, and is not attributed to such parents as spouses under section 318(a)(1)(A)(i), such attribution to the child shall not by itself result in such organizations being members of the same affiliated service group. (iii) Plan shall not fail to be treated as satisfying this section If the application of clause (ii) causes two or more entities to be an affiliated service group, or to no longer be in an affiliated service group, such change shall be treated as a transaction to which section 410(b)(6)(C) applies. , and (C) by striking apply apply, except that community property laws shall be disregarded for purposes of determining ownership (b) Effective date The amendments made by this section shall apply to plan years beginning after December 31, 2023. 608. Contribution limit for simple IRAs (a) In general Subparagraph (E) of section 408(p)(2) (1) by striking amount is (I) $16,500 in the case of an eligible employer described in clause (iii) which had not more than 25 employees who received at least $5,000 of compensation from the employer for the preceding year, (II) $16,500 in the case of an eligible employer described in clause (iii) which is not described in subclause (I) and which elects, at such time and in such manner as prescribed by the Secretary, the application of this subclause for the year, and (III) $10,000 in any other case. , (2) by striking adjustment adjustment (I) Certain large employers In the case of , (3) by striking clause (i) clause (i)(III) (4) by adding at the end of clause (ii) the following new subclause: (II) Other employers In the case of a year beginning after December 31, 2024, the Secretary shall adjust annually the $16,500 amount in subclauses (I) and (II) of clause (i) in the manner provided under subclause (I) of this clause, except that the base period taken into account shall be the calendar quarter beginning July 1, 2023. . (b) Catch-up contributions Paragraph (2) of section 414(v) (1) in subparagraph (B)— (A) by striking the applicable except as provided in clause (iii), the applicable (B) by adding at the end the following new clause: (iii) In the case of an applicable employer plan— (I) which is maintained by an eligible employer described in section 408(p)(2)(E)(i)(I), or (II) to which an election under section 408(p)(2)(E)(i)(II) applies for the year (including a plan described in section 401(k)(11) which is maintained by an eligible employer described in section 408(p)(2)(E)(i)(II) and to which such election applies by reason of subparagraphs (B)(i)(I) and (E) of section 401(k)(11)), the applicable dollar amount is $4,750. , and (2) in subparagraph (C), as amended by this Act, by striking and the $2,500 amount in subparagraph (B)(ii) , the $2,500 amount in subparagraph (B)(ii), and the $4,750 amount in subparagraph (B)(iii) (c) Employer match Clause (ii) of section 408(p)(2)(C) (1) by striking The term Except as provided in subclause (IV), the term (2) by adding at the end the following new subclause: (IV) Special rule for electing larger employers In the case of an employer which had more than 25 employees who received at least $5,000 of compensation from the employer for the preceding year, and which makes the election under subparagraph (E)(i)(II) for any year, subclause (I) shall be applied for such year by substituting 4 percent 3 percent , and (3) by striking 3 percent the applicable percentage (d) Increase in nonelective employer contribution for electing larger employers Subparagraph (B) of section 408(p)(2) (iii) Special rule for electing larger employers In the case of an employer which had more than 25 employees who received at least $5,000 of compensation from the employer for the preceding year, and which makes the election under subparagraph (E)(i)(II) for any year, clause (i) shall be applied for such year by substituting 3 percent 2 percent . (e) Transition rule Paragraph (2) of section 408(p), as amended by this Act, is further amended by adding at the end the following new subparagraph: (H) 2-year grace period An eligible employer which had not more than 25 employees who received at least $5,000 of compensation from the employer for 1 or more years, and which has more than 25 such employees for any subsequent year, shall be treated for purposes of subparagraph (E)(i) as having 25 such employees for the 2 years following the last year the employer had not more than 25 such employees, and not as having made the election under subparagraph (E)(i)(II) for such 2 years. Rules similar to the second sentence of subparagraph (C)(i)(II) shall apply for purposes of this subparagraph. . (f) Amendments apply only if employer has not had another plan within 3 years Subparagraph (E) of section 408(p)(2), as amended by subsection (a), is further amended by adding at the end the following new clause: (iii) Employer has not had another plan within 3 years An eligible employer is described in this clause only if, during the 3-taxable-year period immediately preceding the 1st year the employer maintains the qualified salary reduction arrangement under this paragraph, neither the employer nor any member of any controlled group including the employer (or any predecessor of either) established or maintained any plan described in clause (i), (ii), or (iv) of section 219(g)(5)(A) with respect to which contributions were made, or benefits were accrued, for substantially the same employees as are eligible to participate in such qualified salary reduction arrangement. . (g) Conforming amendments relating to simple 401(k) (1) Subclause (I) of section 401(k)(11)(B)(i) (after the application of any election under section 408(p)(2)(E)(i)(II)) (2) Paragraph (11) of section 401(k) (E) Employers electing increased contributions In the case of an employer which applies an election under section 408(p)(2)(E)(i)(II) for purposes of the contribution requirements of this paragraph under subparagraph (B)(i)(I), rules similar to the rules of subparagraphs (B)(iii), (C)(ii)(IV), and (G) of section 408(p)(2) shall apply for purposes of subparagraphs (B)(i)(II) and (B)(ii) of this paragraph. . (h) Plan forms to be shared with Secretary (1) In general Subsection (p) of section 408 (11) Plan arrangement to be shared with Secretary The trustee or issuer (in the case of an individual retirement annuity) of a simple retirement account shall provide to the Secretary, at the time the qualified salary reduction arrangement is established (or not later than December 31, 2024, in the case of arrangements in effect on the date of the enactment of this paragraph), a copy of the written arrangement described in paragraph (2)(A). . (2) Simple 401(k)s Paragraph (11) of section 401(k), as amended by this section, is further amended by adding at the end the following new subparagraph: (F) Plan arrangement to be shared with Secretary The plan administrator of a cash and deferred arrangement under this paragraph shall provide to the Secretary, at the time the arrangement is established (or not later than December 31, 2024, in the case of arrangements in effect on the date of the enactment of this paragraph), a written copy of the arrangement. . (i) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2023. (j) Reports by Secretary (1) In general The Secretary of the Treasury shall, not later than December 31, 2024, and annually thereafter, report to the Committees on Finance and Health, Education, Labor, and Pensions of the Senate and the Committees on Ways and Means and Education and Labor of the House of Representatives on the data described in paragraph (2), together with any recommendations the Secretary deems appropriate. (2) Data described For purposes of the report required under paragraph (1), the Secretary of the Treasury shall collect data and information on— (A) the number of plans described in section 408(p) or 401(k)(11) of the Internal Revenue Code of 1986 that are maintained or established during a year; (B) the number of participants eligible to participate in such plans for such year; (C) median contribution amounts for the participants described in subparagraph (B); (D) the types of investments that are most common under such plans; and (E) the fee levels charged in connection with the maintenance of accounts under such plans. Such data and information shall be collected separately for each type of plan. For purposes of collecting such data, the Secretary of the Treasury may use such data as is otherwise available to the Secretary for publication and may use such approaches as are appropriate under the circumstances, including the use of voluntary surveys and collaboration on studies. 609. Employers allowed to replace simple retirement accounts with safe harbor 401 (k) (a) In general Section 408(p), as amended by this Act, is further amended by adding at the end the following new paragraph: (12) Replacement of simple retirement accounts with safe harbor plans during plan year (A) In general Subject to the requirements of this paragraph, an employer may elect (in such form and manner as the Secretary may prescribe) at any time during a year to terminate the qualified salary reduction arrangement under paragraph (2), but only if the employer establishes and maintains (as of the day after the termination date) a safe harbor plan to replace the terminated arrangement. (B) Combined limits on contributions The terminated arrangement and safe harbor plan shall both be treated as violating the requirements of paragraph (2)(A)(ii) or section 401(a)(30) (whichever is applicable) if the aggregate elective contributions of the employee under the terminated arrangement during its last plan year and under the safe harbor plan during its transition year exceed the sum of— (i) the applicable dollar amount for such arrangement (determined on a full-year basis) under this subsection (after the application of section 414(v)) with respect to the employee for such last plan year multiplied by a fraction equal to the number of days in such plan year divided by 365, and (ii) the applicable dollar amount (as so determined) under section 402(g)(1) for such safe harbor plan on such elective contributions during the transition year multiplied by a fraction equal to the number of days in such transition year divided by 365. (C) Transition year For purposes of this paragraph, the transition year is the period beginning after the termination date and ending on the last day of the calendar year during which the termination occurs. (D) Safe harbor plan For purposes of this paragraph, the term safe harbor plan . (b) Waiver of 2-Year withdrawal limitation in case of plans converting to 401(k) 403(b) (1) In general Paragraph (6) of section 72(t) (A) by striking accounts accounts (A) In general In the case of , and (B) by adding at the end the following new subparagraph: (B) Waiver in case of plan conversion to 401(k) 403(b) In the case of an employee of an employer which terminates the qualified salary reduction arrangement of the employer under section 408(p) and establishes a qualified cash or deferred arrangement described in section 401(k) or purchases annuity contracts described in section 403(b), subparagraph (A) shall not apply to any amount which is paid in a rollover contribution described in section 408(d)(3) into a qualified trust under section 401(k) (but only if such contribution is subsequently subject to the rules of section 401(k)(2)(B)) or an annuity contract described in section 403(b) (but only if such contribution is subsequently subject to the rules of section 403(b)(11)) for the benefit of the employee. . (2) Conforming amendment Subparagraph (G) of section 408(d)(3) 72(t)(6) 72(t)(6)(A) (c) Effective date The amendments made by this section shall apply to plan years beginning after December 31, 2023. 610. Starter 401(k) (a) In general Section 401(k), as amended by this Act, is further amended by adding at the end the following new paragraph: (17) Starter 401(k) (A) In general A starter 401(k) deferral-only arrangement maintained by an eligible employer shall be treated as meeting the requirements of paragraph (3)(A)(ii). (B) Starter 401(k) For purposes of this paragraph, the term starter 401(k) deferral-only arrangement (i) the automatic deferral requirements of subparagraph (C), (ii) the contribution limitations of subparagraph (D), and (iii) the requirements of subparagraph (E) of paragraph (13). (C) Automatic deferral (i) In general The requirements of this subparagraph are met if, under the arrangement, each eligible employee is treated as having elected to have the employer make elective contributions in an amount equal to a qualified percentage of compensation. (ii) Election out The election treated as having been made under clause (i) shall cease to apply with respect to any employee if such employee makes an affirmative election— (I) to not have such contributions made, or (II) to make elective contributions at a level specified in such affirmative election. (iii) Qualified percentage For purposes of this subparagraph, the term qualified percentage (D) Contribution limitations (i) In general The requirements of this subparagraph are met if, under the arrangement— (I) the only contributions which may be made are elective contributions of employees described in subparagraph (C), and (II) the aggregate amount of such elective contributions which may be made with respect to any employee for any calendar year shall not exceed $6,000. (ii) Cost-of-living adjustment In the case of any calendar year beginning after December 31, 2024, the $6,000 amount under clause (i) shall be adjusted in the same manner as under section 402(g)(4), except that 2023 2005 (iii) Catch-up contributions for individuals age 50 or over In the case of an individual who has attained the age of 50 before the close of the taxable year, the limitation under clause (i)(II) shall be increased by the applicable amount determined under section 219(b)(5)(B)(ii) (after the application of section 219(b)(5)(C)(iii)). (E) Eligible employer For purposes of this paragraph— (i) In general The term eligible employer (ii) Relief for acquisitions, etc Rules similar to the rules of section 408(p)(10) shall apply for purposes of clause (i). (iii) Qualified plan The term qualified plan (F) Eligible employee For purposes of this paragraph— (i) In general The term eligible employee (ii) Exclusions The employer may elect to exclude from such definition any employee described in paragraph (3) or (4) of section 410(b). . (b) Certain annuity contracts Subsection (b) of section 403, as amended by this Act, is further amended by adding at the end the following new paragraph: (17) Safe harbor deferral-only plans for employers with no retirement plan (A) In general A safe harbor deferral-only plan maintained by an eligible employer shall be treated as meeting the requirements of paragraph (12). (B) Safe harbor deferral-only plan For purposes of this paragraph, the term safe harbor deferral-only plan (i) the automatic deferral requirements of subparagraph (C), (ii) the contribution limitations of subparagraph (D), and (iii) the requirements of subparagraph (E) of section 401(k)(13). (C) Automatic deferral (i) In general The requirements of this subparagraph are met if, under the plan, each eligible employee is treated as having elected to have the employer make elective contributions in an amount equal to a qualified percentage of compensation. (ii) Election out The election treated as having been made under clause (i) shall cease to apply with respect to any eligible employee if such eligible employee makes an affirmative election— (I) to not have such contributions made, or (II) to make elective contributions at a level specified in such affirmative election. (iii) Qualified percentage For purposes of this subparagraph, the term qualified percentage (D) Contribution limitations (i) In general The requirements of this subparagraph are met if, under the plan— (I) the only contributions which may be made are elective contributions of eligible employees, and (II) the aggregate amount of such elective contributions which may be made with respect to any employee for any calendar year shall not exceed $6,000. (ii) Cost-of-living adjustment In the case of any calendar year beginning after December 31, 2024, the $6,000 amount under clause (i) shall be adjusted in the same manner as under section 402(g)(4), except that 2023 2005 (iii) Catch-up contributions for individuals age 50 or over In the case of an individual who has attained the age of 50 before the close of the taxable year, the limitation under clause (i)(II) shall be increased by the applicable amount determined under section 219(b)(5)(B)(ii) (after the application of section 219(b)(5)(C)(iii)). (E) Eligible employer For purposes of this paragraph— (i) In general The term eligible employer (ii) Relief for acquisitions, etc Rules similar to the rules of section 408(p)(10) shall apply for purposes of clause (i). (iii) Qualified plan The term qualified plan (F) Eligible employee For purposes of this paragraph, the term eligible employee . (c) Starter and safe harbor plans not treated as top-Heavy plans Subparagraph (H) of section 416(g)(4), as amended by this Act, is further amended— (1) by striking arrangements arrangements or plans (2) by striking , and and matching contributions with respect to which the requirements of paragraph (11), (12), or (13) of section 401(m) are met, or (3) by striking clause (ii) and inserting after clause (i) the following new clause: (ii) a starter 401(k) deferral-only arrangement described in section 401(k)(17)(B) or a safe harbor deferral-only plan described in section 403(b)(17). . (d) Effective date The amendments made by this section shall apply to plan years beginning after December 31, 2023. 611. Credit for small employers that adapt an automatic portability arrangement (a) In general Subpart D of part IV of subchapter A of chapter 1, as amended by this Act, is further amended by adding at the end the following new section: 45W. Employer automatic portability arrangement credit (a) In general For purposes of section 38, in the case of an eligible employer, the automatic portability arrangement credit determined under this section for the adoption year is an amount equal to $500. (b) Eligible employer For purposes of this section, the term eligible employer (c) Adoption year For purposes of this section— (1) In general The term adoption year (2) Automatic portability arrangement (A) In general The term automatic portability arrangement (B) Automatic portability transaction The term automatic portability transaction (3) Eligible plan The term eligible plan . (b) Credit to be part of general business credit Subsection (b) of section 38, as amended by this Act, is further amended by striking plus , plus (36) in the case of an eligible employer (as defined in section 45W(b)), the automatic portability arrangement credit determined under section 45W(a). . (c) Clerical amendment The table of sections for subpart D of part IV of subchapter A of chapter 1, as amended by this Act, is further amended by adding at the end the following new item: Sec. 45W. Employer automatic portability arrangement credit. . (d) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 612. Re-enrollment credit (a) In general Subpart D of part IV of subchapter A of chapter 1, as amended by this Act, is further amended by adding at the end the following new section: 45X. Credit for re-enrollment provisions in plans provided by small employers (a) In general For purposes of section 38, in the case of an eligible employer, the retirement re-enrollment credit determined under this section for any taxable year is an amount equal to— (1) $500 for any taxable year occurring during the credit period, and (2) zero for any other taxable year. (b) Credit period For purposes of subsection (a)— (1) In general The credit period with respect to any eligible employer is the 3-taxable-year period beginning with the first taxable year for which the employer includes a re-enrollment provision in an eligible automatic contribution arrangement (as defined in section 414(w)(3)) in a qualified employer plan (as defined in section 4972(d)) maintained by the employer. (2) Maintenance of arrangement No taxable year with respect to an employer shall be treated as occurring within the credit period unless the provision described in paragraph (1) is included in the plan for such year. (c) Eligible employer For purposes of this section, the term eligible employer (d) Re-Enrollment provision For purposes of this section, the term re-enrollment provision (1) In general Each employee eligible to participate in the arrangement who is not contributing or is contributing less than the percentage applicable to an eligible employee in the first year of eligibility is treated as being in such first year of eligibility in each applicable year with respect to the employee. (2) Election out The election treated as having been made under paragraph (1) shall cease to apply with respect to any employee if such employee makes an affirmative election— (A) to not have such contributions made, or (B) to make elective contributions at a level specified in such affirmative election. (3) Applicable year every third year (A) In general For purposes of this section, the term applicable year (B) Exception Following any applicable year of an employee (determined after the application of this subparagraph), the plan may elect to treat the next 1 or 2 plan years as not being applicable years with respect to such employee. . (b) Credit to be part of general business credit Subsection (b) of section 38, as amended by this Act, is further amended by striking plus , plus (37) in the case of an eligible employer (as defined in section 45X(c)), the retirement re-enrollment credit determined under section 45X(a). . (c) Treatment of credit for certified professional employer organizations Paragraph (2) of section 3511(d), as amended by this Act, is further amended— (1) by redesignating subparagraphs (H), (I), (J), and (K) as subparagraphs (I), (J), (K), and (L) respectively, and (2) by inserting after subparagraph (G) the following new subparagraph: (H) section 45X (retirement re-enrollment credit), . (d) Clerical amendment The table of sections for subpart D of part IV of subchapter A of chapter 1, as amended by this Act, is further amended by inserting after the item relating to section 45W the following new item: Sec. 45X. Credit for re-enrollment provisions in plans provided by small employers. . (e) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2023. 613. Corrections of mortality tables (a) In general Not later than 18 months after the date of the enactment of this Act, the Secretary of the Treasury (or the Secretary's delegate) shall amend the regulation relating to Mortality Tables for Determining Present Value Under Defined Benefit Pension Plans (b) Effective date The amendments required under subsection (a) shall be deemed to have been made as of the date of the enactment of this Act, and as of such date all applicable laws shall be applied in all respects as though the actions which the Secretary of the Treasury (or the Secretary's delegate) is required to take under such subsection had been taken. 614. Enhancing retiree health benefits in pension plans (a) Extension of transfers of excess pension assets to retiree health accounts Paragraph (4) of section 420(b) December 31, 2025 December 31, 2032 (b) De minimis transfer rule (1) In general Subsection (e) of section 420 (7) Special rule for de minimis transfers (A) In general In the case of a transfer of an amount which is not more than 1.75 percent of the amount determined under paragraph (2)(A) by a plan which meets the requirements of subparagraph (B), paragraph (2)(B) shall be applied by substituting 110 percent 125 percent (B) Two-year lookback requirement A plan is described in this subparagraph if, as of any valuation date in each of the 2 plan years immediately preceding the plan year in which the transfer occurs, the amount determined under paragraph (2)(A) exceeded 110 percent of the sum of the funding target and the target normal cost determined under section 430 for each such plan year. . (2) Cost maintenance period Subparagraph (D) of section 420(c)(3) 5 taxable years 5 taxable years (7 taxable years in the case of a transfer to which subsection (e)(7) applies) (3) Conforming amendments (A) Excess pension assets Clause (i) of section 420(f)(2)(B) (i) by striking In general In general (I) Determination In , (ii) by striking subsection (e)(2) subsection (e)(2)(B) (iii) by adding at the end the following new subclause: (II) Special rule for collectively bargained transfers In determining excess pension assets for purposes of a collectively bargained transfer, subsection (e)(7) shall not apply. . (B) Minimum cost Subclause (I) of section 420(f)(2)(D)(i) 4th year 4th year (the 6th year in the case of a transfer to which subsection (e)(7) applies) (c) Effective date The amendments made by this section shall apply to transfers made after the date of the enactment of this Act. 615. Deferral of tax for certain sales of employer stock to employee stock ownership plan sponsored by S corporation (a) In general Section 1042(c)(1)(A) domestic C corporation domestic corporation (b) 10 percent limitation on application of gain on sale of S corporation stock Section 1042 (h) Application of section to sale of stock in S corporation In the case of the sale of qualified securities of an S corporation, the election under subsection (a) may be made with respect to not more than 10 percent of the amount realized on such sale for purposes of determining the amount of gain not recognized and the extent to which (if at all) the amount realized on such sale exceeds the cost of qualified replacement property. The portion of adjusted basis that is properly allocable to the portion of the amount realized with respect to which the election is made under this subsection shall be taken into account for purposes of the preceding sentence. . (c) Effective date The amendments made by this section shall apply to sales after December 31, 2027. VII Notices 701. Review and report to Congress relating to reporting and disclosure requirements (a) Study As soon as practicable after the date of enactment of this Act, the Secretary of Labor, the Secretary of the Treasury, and the Director of the Pension Benefit Guaranty Corporation shall review the reporting and disclosure requirements as applicable to each such agency head, of— (1) the Employee Retirement Income Security Act of 1974 applicable to pension plans (as defined in section 3(2) of such Act ( 29 U.S.C. 1002(2) (2) the Internal Revenue Code of 1986 applicable to qualified retirement plans (as defined in section 4974(c) of such Code, without regard to paragraphs (4) and (5) of such section). (b) Report (1) In general Not later than 2 years after the date of enactment of this Act, the Secretary of Labor, the Secretary of the Treasury, and the Director of the Pension Benefit Guaranty Corporation, jointly, and after consultation with a balanced group of participant and employer representatives, shall with respect to plans referenced in subsection (a) report on the effectiveness of the applicable reporting and disclosure requirements and make such recommendations as may be appropriate to the Committee on Education and Labor and the Committee on Ways and Means of the House of Representatives and the Committee on Health, Education, Labor, and Pensions and the Committee on Finance of the Senate to consolidate, simplify, standardize, and improve such requirements so as to simplify reporting for such plans and ensure that plans can furnish and participants and beneficiaries timely receive and better understand the information they need to monitor their plans, plan for retirement, and obtain the benefits they have earned. (2) Analysis of effectiveness To assess the effectiveness of the applicable reporting and disclosure requirements, the report shall include an analysis, based on plan data, of how participants and beneficiaries are providing preferred contact information, the methods by which plan sponsors and plans are furnishing disclosures, and the rate at which participants and beneficiaries (grouped by key demographics) are receiving, accessing, understanding, and retaining disclosures. (3) Collection of information The agencies shall conduct appropriate surveys and data collection to obtain any needed information. 702. Report to Congress on section 402(f) notices Not later than 18 months after the date of the enactment of this Act, the Comptroller General of the United States shall submit a report to the Committees on Finance and Health, Education, Labor, and Pensions of the Senate and the Committees on Ways and Means and Education and Labor of the House of Representatives on the notices provided by retirement plan administrators to plan participants under section 402(f) 703. Eliminating unnecessary plan requirements related to unenrolled participants (a) In general Section 414, as amended by this Act, is further amended by adding at the end the following new subsection: (bb) Eliminating unnecessary plan requirements related to unenrolled participants (1) In general Notwithstanding any other provision of this title, with respect to any defined contribution plan, no disclosure, notice, or other plan document (other than the notices and documents described in subparagraphs (A) and (B)) shall be required to be furnished under this title to any unenrolled participant if the unenrolled participant receives— (A) an annual reminder notice of such participant’s eligibility to participate in such plan and any applicable election deadlines under the plan, and (B) any document requested by such participant which the participant would be entitled to receive notwithstanding this subsection. (2) Unenrolled participant For purposes of this subsection, the term unenrolled participant (A) is eligible to participate in a defined contribution plan, (B) has received— (i) the summary plan description pursuant to section 104(b) of the Employee Retirement Income Security Act of 1974, and (ii) any other notices related to eligibility under the plan which are required to be furnished under this title or the Employee Retirement Income Security Act of 1974 in connection with such participant’s initial eligibility to participate in such plan, (C) is not participating in such plan, (D) does not have an account balance in the plan, and (E) satisfies such other criteria as the Secretary may determine appropriate, as prescribed in guidance issued in consultation with the Secretary of Labor. For purposes of this subsection, any eligibility to participate in the plan following any period for which such employee was not eligible to participate shall be treated as initial eligibility. (3) Annual reminder notice For purposes of this subsection, the term annual reminder notice . (b) Effective date The amendments made by this section shall apply to plan years beginning after the date of the enactment of this Act. VIII Technical modifications 801. Repayment of qualified birth or adoption distribution limited to 3 (a) In general Section 72(t)(2)(H)(v)(I) may make may, at any time during the 3-year period beginning on the day after the date on which such distribution was received, make (b) Effective date The amendment made by this section shall take effect as if included in the enactment of section 113 of the Setting Every Community Up for Retirement Enhancement Act of 2019. 802. Amendments relating to Setting Every Community Up for Retirement Enhancement Act of 2019 (a) Technical amendments (1) Amendments relating to section 103 Section 401(m)(12) and (B) meets the notice requirements of subsection (k)(13)(E), and . (2) Amendments relating to section 112 (A) Section 401(k)(15)(B)(i)(II), as amended by this Act, is further amended by striking subsection (m)(2) paragraphs (2), (11), and (12) of subsection (m) (B) Section 401(k)(15)(B)(iii) under the arrangement under the plan (C) Section 401(k)(15)(B)(iv) section 410(a)(1)(A)(ii) paragraph (2)(D) (3) Amendment relating to section 116 Section 4973(b) Such term shall not include any designated nondeductible contribution (as defined in subparagraph (C) of section 408(o)(2)) which does not exceed the nondeductible limit under subparagraph (B) thereof by reason of an election under section 408(o)(5). (b) Clerical amendments (1) Section 72(t)(2)(H)(vi)(IV) 403(b)(7)(A)(ii) 403(b)(7)(A)(i) (2) Section 401(k)(12)(G) the requirements under subparagraph (A)(i) the contribution requirements under subparagraph (B) or (C) (3) Section 401(k)(13)(D)(iv) and (F) and (G) (4) Section 408(o)(5)(A) subsection (b) section 219(b) (c) Effective date The amendments made by this section shall take effect as if included in section of the Setting Every Community Up for Retirement Enhancement Act of 2019 to which the amendment relates. 803. Modification of required minimum distribution rules for special needs trusts (a) In general Section 401(a)(9)(H)(iv)(II) no individual no beneficiary (b) Conforming amendment Section 401(a)(9)(H)(v) For purposes of the preceding sentence, in the case of a trust the terms of which are described in clause (iv)(II), any beneficiary which is an organization described in section 408(d)(8)(B)(i) shall be treated as a designated beneficiary described in subclause (II). . (c) Effective date The amendments made by this section shall apply to calendar years beginning after the date of the enactment of this Act. IX Plan amendments 901. Provisions relating to plan amendments (a) In general If this section applies to any retirement plan or contract amendment— (1) such retirement plan or contract shall be treated as being operated in accordance with the terms of the plan during the period described in subsection (b)(2)(A); and (2) to the extent provided by the Secretary of the Treasury (or the Secretary’s delegate), such retirement plan shall not fail to meet the requirements of section 411(d)(6) (b) Amendments to which section applies (1) In general This section shall apply to any amendment to any retirement plan or annuity contract which is made— (A) pursuant to any amendment made by this Act or pursuant to any regulation issued by the Secretary of the Treasury or the Secretary of Labor (or a delegate of either such Secretary) under this Act; and (B) on or before the last day of the first plan year beginning on or after January 1, 2024, or such later date as the Secretary of the Treasury may prescribe. In the case of a governmental plan (as defined in section 414(d) 2026 2024 applicable collectively bargained plan (2) Conditions This section shall not apply to any amendment unless— (A) during the period— (i) beginning on the date the legislative or regulatory amendment described in paragraph (1)(A) takes effect (or in the case of a plan or contract amendment not required by such legislative or regulatory amendment, the effective date specified by the plan); and (ii) ending on the date described in paragraph (1)(B) (as modified by the second sentence of paragraph (1)) (or, if earlier, the date the plan or contract amendment is adopted), the plan or contract is operated as if such plan or contract amendment were in effect; and (B) such plan or contract amendment applies retroactively for such period. (c) Coordination with other provisions relating to plan amendments (1) SECURE Section 601(b)(1) of the Setting Every Community Up for Retirement Enhancement Act of 2019 is amended— (A) by striking January 1, 2022 January 1, 2024 (B) by striking substituting 2024 2022 substituting 2026 2024 (2) CARES (A) Special rules for use of retirement funds Section 2202(c)(2)(A) of the CARES Act is amended by striking January 1, 2022 January 1, 2024 (B) Temporary waiver of required minimum distributions rules for certain retirement plans and accounts Section 2203(c)(2)(B)(i) of the CARES Act is amended— (i) by striking January 1, 2022 January 1, 2024 (ii) by striking substituting 2024 2022 substituting 2026 2024 (C) Taxpayer Certainty and Disaster Tax Relief Act of 2020 Section 302(d)(2)(A) of the Taxpayer Certainty and Disaster Tax Relief Act of 2020 is amended by striking January 1, 2022 January 1, 2024 X Tax Court retirement provisions 1001. Provisions relating to judges of the Tax Court (a) Thrift Savings Plan contributions for judges in the Federal Employees Retirement System (1) In general Subsection (j)(3)(B) of section 7447 (B) Contributions for benefit of judge No contributions under section 8432(c) of title 5, United States Code, shall be made for the benefit of a judge who has filed an election to receive retired pay under subsection (e). . (2) Offset Paragraph (3) of section 7447(j) (F) Offset In the case of a judge who receives a distribution from the Thrift Savings Plan and who later receives retired pay under subsection (d), the retired pay shall be offset by an amount equal to the amount of the distribution which represents the Government’s contribution to the individual’s Thrift Savings Account during years of service as a full-time judicial officer under the Federal Employees Retirement System, without regard to earnings attributable to such amount. Where such an offset would exceed 50 percent of the retired pay to be received in the first year, the offset may be divided equally over the first 2 years in which the individual receives the annuity. . (3) Effective date The amendments made by this subsection shall apply to basic pay earned while serving as a judge of the United States Tax Court on or after the date of the enactment of this Act. (b) Change in vesting period for survivor annuities and waiver of vesting period in the event of assassination (1) Eligibility in case of death Subsection (h) of section 7448 (h) Entitlement to annuity (1) In general (A) Annuity to surviving spouse If a judge or special trial judge described in paragraph (2) is survived by a surviving spouse but not by a dependent child, there shall be paid to such surviving spouse an annuity beginning with the day of the death of the judge or special trial judge or following the surviving spouse’s attainment of age 50, whichever is the later, in an amount computed as provided in subsection (m). (B) Annuity to surviving spouse and child If a judge or special trial judge described in paragraph (2) is survived by a surviving spouse and dependent child or children, there shall be paid to such surviving spouse an annuity, beginning on the day of the death of the judge or special trial judge, in an amount computed as provided in subsection (m), and there shall also be paid to or on behalf of each such child an immediate annuity equal to the lesser of— (i) 10 percent of the average annual salary of such judge or special trial judge (determined in accordance with subsection (m)), or (ii) 20 percent of such average annual salary, divided by the number of such children. (C) Annuity to surviving dependent children If a judge or special trial judge described in paragraph (2) leaves no surviving spouse but leaves a surviving dependent child or children, there shall be paid to or on behalf of each such child an immediate annuity equal to the lesser of— (i) 20 percent of the average annual salary of such judge or special trial judge (determined in accordance with subsection (m)), or (ii) 40 percent of such average annual salary divided by the number of such children. (2) Covered judges Paragraph (1) applies to any judge or special trial judge electing under subsection (b)— (A) who dies while a judge or special trial judge after having rendered at least 18 months of civilian service computed as prescribed in subsection (n), for the last 18 months of which the salary deductions provided for by subsection (c)(1) or the deposits required by subsection (d) have actually been made or the salary deductions required by the civil service retirement laws have actually been made, or (B) who dies by assassination after having rendered less than 18 months of civilian service computed as prescribed in subsection (n) if, for the period of such service, the salary deductions provided for by subsection (c)(1) or the deposits required by subsection (d) have actually been made. (3) Termination of annuity (A) Surviving spouse The annuity payable to a surviving spouse under this subsection shall be terminable upon such surviving spouse’s death or such surviving spouse’s remarriage before attaining age 55. (B) Surviving child Any annuity payable to a child under this subsection shall be terminable upon the earliest of— (i) the child's attainment of age 18, (ii) the child’s marriage, or (iii) the child’s death, except that if such child is incapable of self-support by reason of mental or physical disability the child’s annuity shall be terminable only upon death, marriage, or recovery from such disability. (C) Dependent child after death of surviving spouse In case of the death of a surviving spouse of a judge or special trial judge leaving a dependent child or children of the judge or special trial judge surviving such spouse, the annuity of such child or children shall be recomputed and paid as provided in paragraph (1)(C). (D) Recomputation with respect to other dependent children In any case in which the annuity of a dependent child is terminated under this subsection, the annuities of any remaining dependent child or children based upon the service of the same judge or special trial judge shall be recomputed and paid as though the child whose annuity was so terminated had not survived such judge. (E) Special rule for assassinated judges In the case of a survivor of a judge or special trial judge described in paragraph (2)(B), there shall be deducted from the annuities otherwise payable under this section an amount equal to the amount of salary deductions that would have been made if such deductions had been made for 18 months prior to the death of the judge or special trial judge. . (2) Definition of assassination Section 7448(a) (10) The terms assassinated assassination . (3) Determination of assassination Subsection (i) of section 7448 (A) by striking of dependency and disability by chief judge (1) Dependency and disability Questions , and (B) by adding at the end the following new paragraph: (2) Assassination The chief judge shall determine whether the killing of a judge or special trial judge was an assassination, subject to review only by the Tax Court. The head of any Federal agency that investigates the killing of a judge or special trial judge shall provide to the chief judge any information that would assist the chief judge in making such a determination. . (4) Computation of annuities Subsection (m) of section 7448 (A) by striking annuities annuities (1) In general Except as provided in paragraph (2), the annuity , (B) by striking the sum of (1) 1.5 percent (A) 1.5 percent , (C) by striking and (2) three-fourths of 1 percent (B) three-fourths of 1 percent , (D) by striking prior allowable service, except that except that , and (E) by adding at the end the following new paragraph: (2) Service of less than 3 years In the case of a judge or special trial judge who has served less than 3 years, the annuity of the surviving spouse of such judge or special trial judge shall be based upon the average annual salary received by such judge or special trial judge for judicial service prior to the death of the judge or special trial judge. . (5) Other benefits Section 7448 (u) Other benefits in case of assassination In the case of a judge or special trial judge who is assassinated, an annuity shall be paid under this section notwithstanding a survivor’s eligibility for or receipt of benefits under chapter 81 chapter 81 . (c) Coordination of retirement and survivor annuity with the Federal Employees Retirement System (1) Retirement Section 7447 (A) by striking section 8331(8) sections 8331(8) and 8401(19) (B) by striking Civil Service Commission Office of Personnel Management (2) Annuities to surviving spouses and dependent children Section 7448 (A) by striking section 8332 sections 8332 and 8411 (B) by striking section 8332 sections 8332 and 8411 (d) Limit on teaching compensation of retired judges (1) In general Section 7447 (k) Teaching compensation of retired judges For purposes of the limitation under section 501(a) . (2) Effective date The amendment made by this subsection shall apply to any individual serving as a retired judge of the United States Tax Court on or after the date of the enactment of this Act. (e) Effective date Except as otherwise provided, the amendments made by this section shall take effect on the date of the enactment of this Act. 1002. Provisions relating to special trial judges of the Tax Court (a) Retirement and recall for special trial judges Part I of subchapter C of chapter 76 7447A. Retirement for special trial judges (a) In general (1) Retirement Any special trial judge appointed pursuant to section 7443A may retire from service as a special trial judge if the individual meets the age and service requirements set forth in the following table: If the special trial judge has attained age: And the years of service as a special trial judge are at least: 65 15 66 14 67 13 68 12 69 11 70 10. (2) Length of service In making any determination of length of service as a special trial judge there shall be included all periods (whether or not consecutive) during which an individual served as a special trial judge (b) Retirement upon disability Any special trial judge appointed pursuant to section 7443A who becomes permanently disabled from performing such individual's duties shall retire from service as a special trial judge. (c) Recalling of retired special trial judges Any individual who has retired pursuant to subsection (a) may be called upon by the chief judge to perform such judicial duties with the Tax Court as may be requested of such individual for a period or periods specified by the chief judge, except that in the case of any such individual— (1) the aggregate of such periods in any 1 calendar year shall not (without the consent of such individual) exceed 90 calendar days, and (2) such individual shall be relieved of performing such duties during any period in which illness or disability precludes the performance of such duties. Any act, or failure to act, by an individual performing judicial duties pursuant to this subsection shall have the same force and effect as if it were the act (or failure to act) of a special trial judge. Any individual who is performing judicial duties pursuant to this subsection shall be paid the same compensation (in lieu of retired pay) and allowances for travel and other expenses as a special trial judge. (d) Retired pay (1) In general Any individual who retires pursuant to subsection (a) and elects under subsection (e) to receive retired pay under this subsection shall receive retired pay during any period of retirement from service as a special trial judge at a rate which bears the same ratio to the rate of the salary payable to a special trial judge during such period as— (A) the number of years such individual has served as special trial judge bears to, (B) 15, except that the rate of such retired pay shall not be more than the rate of such salary for such period. (2) Retirement upon disability Any individual who retires pursuant to subsection (b) and elects under subsection (e) to receive retired pay under this subsection shall receive retired pay during any period of retirement from service as a special trial judge— (A) at a rate equal to the rate of the salary payable to a special trial judge during such period, if the individual had at least 10 years of service as a special trial judge before retirement, and (B) at a rate equal to ½ the rate described in subparagraph (A), if the individual had fewer than 10 years of service as a special trial judge before retirement. (3) Beginning date and payment Retired pay under this subsection shall begin to accrue on the day following the date on which the individual’s salary as a special trial judge ceases to accrue, and shall continue to accrue during the remainder of such individual’s life. Retired pay under this subsection shall be paid in the same manner as the salary of a special trial judge. (4) Partial years In computing the rate of the retired pay for an individual to whom paragraph (1) applies, any portion of the aggregate number of years such individual has served as a special trial judge which is a fractional part of 1 year shall be eliminated if it is less than 6 months, or shall be counted as a full year if it is 6 months or more. (5) Recalled service In computing the rate of the retired pay for an individual to whom paragraph (1) applies, any period during which such individual performs services under subsection (c) on a substantially full-time basis shall be treated as a period during which such individual has served as a special trial judge. (e) Election to receive retired pay Any special trial judge may elect to receive retired pay under subsection (d). Such an election— (1) may be made only while an individual is a special trial judge (except that in the case of an individual who fails to be reappointed as a special trial judge, such election may be made within 60 days after such individual leaves office as a special trial judge), (2) once made, shall be irrevocable, and (3) shall be made by filing notice thereof in writing with the chief judge. The chief judge shall transmit to the Office of Personnel Management a copy of each notice filed with the chief judge under this subsection. (f) Other rules made applicable The rules of subsections (f), (g), (h), (i), and (j) of section 7447 shall apply to a special trial judge in the same manner as a judge of the Tax Court. For purposes of the preceding sentence, any reference to the President in such subsections shall be applied as if it were a reference to the chief judge. . (b) Conforming amendments (1) Section 3121(b)(5)(E) or special trial judge of the United States Tax Court (2) Section 7448(b)(2) (2) Special trial judges Any special trial judge may by written election filed with the chief judge elect the application of this section. Such election shall be filed while such individual is a special trial judge. . (3) Section 210(a)(5)(E) of the Social Security Act ( 42 U.S.C. 410(a)(5)(E) or special trial judge of the United States Tax Court (c) Clerical amendment The table of sections for part I of subchapter C of chapter 76 Sec. 7447A. Retirement for special trial judges. . (d) Effective date The amendments made by this section shall take effect on the date of the enactment of this Act. XI Revenue provisions 1101. Simple and SEP Roth IRAs (a) In general Section 408A (b) Rules relating to simplified employee pensions (1) Contributions Section 402(h)(1) and , and (C) in the case of any contributions pursuant to a simplified employer pension which are made to an individual retirement plan designated as a Roth IRA, such contribution shall not be excludable from gross income. . (2) Distributions Section 402(h)(3) , or section 408A(d) in the case of an individual retirement plan designated as a Roth IRA (3) Election required Section 408(k) (7) Roth contribution election An individual retirement plan which is designated as a Roth IRA shall not be treated as a simplified employee pension under this subsection unless the employee elects for such plan to be so treated (at such time and in such manner as the Secretary may provide). . (c) Rules relating to simple retirement accounts (1) Election required Section 408(p), as amended by this Act, is further amended by adding at the end the following new paragraph: (13) Roth contribution election An individual retirement plan which is designated as a Roth IRA shall not be treated as a simple retirement account under this subsection unless the employee elects for such plan to be so treated (at such time and in such manner as the Secretary may provide). . (2) Rollovers Section 408A(e) (3) Simple retirement accounts In the case of any payment or distribution out of a simple retirement account (as defined in section 408(p)) with respect to which an election has been made under section 408(p)(13) and to which 72(t)(6)(A) applies, the term qualified rollover contribution . (d) Coordination with Roth contribution limitation Section 408A(c) (7) Coordination with limitation for simple retirement plans and SEPs In the case of an individual on whose behalf contributions are made to a simple retirement account or a simplified employee pension, the amount described in paragraph (2)(A) shall be increased by an amount equal to the contributions made on the individual’s behalf to such account or pension for the taxable year, but only to the extent such contributions— (A) in the case of a simplified retirement account— (i) do not exceed the sum of the dollar amount in effect for the taxable year under section 408(p)(2)(A)(ii) and the employer contribution required under subparagraph (A)(iii) or (B)(i), as the case may be, of section 408(p)(2), and (ii) do not cause the elective deferrals (as defined in section 402(g)(3)) on behalf of such individual to exceed the limitation under section 402(g)(1) (taking into account any additional elective deferrals permitted under section 414(v)), or (B) in the case of a simplified employee pension, do not exceed the limitation in effect under section 408(j). . (e) Conforming amendment Section 408A(d)(2)(B) , or employer in the case of a simple retirement account (as defined in section 408(p)) or simplified employee pension (as defined in section 408(k)), individual’s spouse (f) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2023. 1102. Elective deferrals generally limited to regular contribution limit (a) Applicable employer plans Section 414(v) (7) Certain deferrals must be Roth contributions (A) In general Except as provided in subparagraph (C), in the case of an eligible participant whose wages (as defined in section 3121(a)) for the preceding year exceed $100,000, paragraph (1) shall apply only if any additional elective deferrals are designated Roth contributions (as defined in section 402A(c)(1)). (B) Roth option In the case of an applicable employer plan with respect to which subparagraph (A) applies to any participant for a plan year, paragraph (1) shall not apply to the plan unless the plan provides that any eligible participant may make the participant's additional elective deferrals as designated Roth contributions. (C) Exception Subparagraph (A) shall not apply in the case of an applicable employer plan described in paragraph (6)(A)(iv). (D) Election to change deferrals The Secretary may provide by regulations that an eligible participant may elect to change the participant's election to make additional elective deferrals if the participant's compensation is determined to exceed the limitation under subparagraph (A) after the election is made. (8) No recharacterization of excess deferrals If the elective deferrals for any year of an eligible participant to which paragraph (7)(A) applies exceed any applicable limitation under this title (without regard to paragraph (1)) or the terms of the plan, such excess shall not be treated as additional elective deferrals to which paragraph (1) applies. . (b) Conforming amendments (1) Section 402(g)(1) (2) Section 457(e)(18)(A)(ii) the lesser of any designated Roth contributions made by the participant to the plan or the applicable dollar amount (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2023. 1103. Optional treatment of employer matching or nonelective contributions as Roth contributions (a) In general Section 402A(a) and (2) any designated Roth contribution which is made by the employer to the program on the employee’s behalf on account of the employee’s contribution, elective deferral, or (subject to the requirements of section 401(m)(14)) qualified student loan payment shall be treated as a matching contribution for purposes of this chapter, except that such contribution shall not be excludable from gross income, (3) any designated Roth contribution which is made by the employer to the program on the employee’s behalf and which is a nonelective contribution shall be fully vested and shall not be excludable from gross income, and . (b) Matching included in qualified Roth contribution program Section 402A(b)(1) (1) by inserting , or to have made on the employee’s behalf, elect to make (2) by inserting , or of matching contributions or nonelective contributions which may otherwise be made on the employee’s behalf, otherwise eligible to make (c) Designated Roth matching contributions Section 402A(c)(1) , matching contribution, or nonelective contribution elective deferral (d) Matching contribution defined Section 402A(e) (3) Matching contribution The term matching contribution (A) any matching contribution described in section 401(m)(4)(A), and (B) any contribution to an eligible deferred compensation plan (as defined in section 457(b)) by an eligible employer described in section 457(e)(1)(A) on behalf of an employee and on account of such employee’s elective deferral under such plan, but only if such contribution is fully vested at the time received. . (e) Effective date The amendments made by this section shall apply to contributions made after December 31, 2022. 1104. Charitable conservation easements (a) In general Section 170(h) (7) Limitation on deduction for qualified conservation contributions made by pass-through entities (A) In general A contribution by a partnership (whether directly or as a distributive share of a contribution of another partnership) shall not be treated as a qualified conservation contribution for purposes of this section if the amount of such contribution exceeds 2.5 times the sum of each partner’s relevant basis in such partnership. (B) Relevant basis For purposes of this paragraph— (i) In general The term relevant basis (ii) Modified basis The term modified basis (I) immediately before the contribution described in subparagraph (A), (II) without regard to section 752, and (III) by the partnership after taking into account the adjustments described in subclauses (I) and (II) and such other adjustments as the Secretary may provide. (C) Exception for contributions outside 3-year holding period Subparagraph (A) shall not apply to any contribution which is made at least 3 years after the latest of— (i) the last date on which the partnership that made such contribution acquired any portion of the real property with respect to which such contribution is made, (ii) the last date on which any partner in the partnership that made such contribution acquired any interest in such partnership, and (iii) if the interest in the partnership that made such contribution is held through 1 or more partnerships— (I) the last date on which any such partnership acquired any interest in any other such partnership, and (II) the last date on which any partner in any such partnership acquired any interest in such partnership. (D) Exception for family partnerships (i) In general Subparagraph (A) shall not apply with respect to any contribution made by any partnership if substantially all of the partnership interests in such partnership are held, directly or indirectly, by an individual and members of the family of such individual. (ii) Members of the family For purposes of this subparagraph, the term members of the family (I) the spouse of such individual, and (II) any individual who bears a relationship to such individual which is described in subparagraphs (A) through (G) of section 152(d)(2). (E) Application to other pass-through entities Except as may be otherwise provided by the Secretary, the rules of this paragraph shall apply to S corporations and other pass-through entities in the same manner as such rules apply to partnerships. (F) Regulations The Secretary shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this paragraph, including regulations or other guidance— (i) to require reporting, including reporting related to tiered partnerships and the modified basis of partners, and (ii) to prevent the avoidance of the purposes of this paragraph. . (b) Application of accuracy-related penalties (1) In general Section 6662(b) (10) Any disallowance of a deduction by reason of section 170(h)(7). . (2) Treatment as gross valuation misstatement Section 6662(h)(2) and , and (D) any disallowance of a deduction described in subsection (b)(10). . (3) No reasonable cause exception Section 6664(c)(2) or to any disallowance of a deduction described in section 6662(b)(10) (4) Approval of assessment not required Section 6751(b)(2)(A) subsection (b)(9) paragraph (9) or (10) of subsection (b) (c) Extension of statute of limitations for listed transactions Any contribution described in section 170(h)(7)(A) (d) Effective date (1) In general The amendments made by this section shall apply to contributions made after the date of the enactment of this Act. (2) No inference No inference is intended as to the appropriate treatment of contributions made in taxable years ending on or before the date specified in paragraph (1), or as to any activity not described in section 170(h)(7) September 8, 2022 Read twice and placed on the calendar

Summary: Enhancing American Retirement Now Act or the EARN Act This bill revises or establishes new tax provisions relating to retirement plans for individuals, retirees, public safety officers and military personnel, disaster relief, and employer plans. The bill revises various provisions relating to individual retirement plans, including provisions to (1) establish a safe harbor for automatic enrollment plans; (2) allow a refundable income tax credit, up to $1,000, for retirement savings contributions; (3) allow penalty-free withdrawals from plans for emergency expenses; (4) modify age requirements for catch-up provisions; (5) allow penalty free withdrawals from plans in domestic abuse cases; (6) allow transfers of plans (portability); and (7) modify the age requirement for ABLE programs for disabled individuals. The bill makes changes to plans for retirees, including by (1) increasing the age for the start of mandatory plan distributions, (2) reducing the excise tax on certain accumulations in qualified retirement plans, (3) recovering retirement plan overpayments, (4) modifying certain Roth IRA distribution requirements, and (5) allowing plan distributions for individuals with a terminal illness. The bill modifies provisions relating to retirement plans of public safety offices and military personnel. It allows (1) small employers a tax credit for establishing military spouse retirement plans, (2) penalty-free distributions to firefighters, (3) a tax exclusion for certain disability-related payment for first responders, and (4) an exemption from the early withdrawal penalty for distributions to certain state and local corrections employees. The bill establishes special tax rules for the use of retirement funds for federally declared disasters. The bill also modifies or establishes requirements relating to employer plans, including (1) allowing a tax credit for small employers with respect to safe harbor requirements for retirement plans, (2) increasing the credit limitation for small employer pension plan startup costs, (3) reforming family attribution rules, (4) providing for starter 401(k) plans for employers with no retirement plan, (5) allowing a tax credit for small employers that adopt an automatic portability arrangement, (6) modifying Internal Revenue Service mortality tables, (7) extending the period for transferring excess pension assets to retiree heath accounts, and (8) deferring the tax on certain sales of employer stock to employee stock ownership plans sponsored by S corporations. The bill modifies provisions relating to the retirement of U.S. Tax Court judges, including participation in the Thrift Savings Plan.