I
103D CONGRESS
2D SESSION
H. R. 4215
To amend the Internal Revenue Code of 1986 to increase the deduction
for retirement savings, to permit nonemployed spouses a full IRA deduc-
tion, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
APRIL 14, 1994
Mr. BAKER of California (for himself, Mr. CRAPO, Mr. GALLEGLY, Mr. EMER-
SON, Mr. SOLOMON, Mr. STUMP, Mr. BARTLETT of Maryland, Mr. LEVY,
Mr. LIPINSKI, Mr. DOOLITTLE, Mr. LIVINGSTON, Mr. COX, and Ms.
ESHOO) introduced the following bill; which was referred to the Commit-
tee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to increase
the 
deduction 
for 
retirement 
savings, 
to 
permit
nonemployed spouses a full IRA deduction, and for other
purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. MODIFICATIONS TO IRA DEDUCTION.
(a) INCREASE IN MAXIMUM AMOUNT OF DEDUC-
TION.—Subparagraph (A) of section 219(b)(1) of the In-
ternal Revenue Code of 1986 (relating to maximum
amount of deduction) is amended by striking ‘‘$2,000’’
and inserting ‘‘$2,500’’.
(b) INCREASE IN INCOME PHASEOUT LEVELS.—Sub-
paragraph (B) of section 219(g)(3) of such Code is
amended—
(1) by striking ‘‘$40,000’’ and inserting
‘‘$100,000’’, and
(2) by striking ‘‘$25,000’’ and inserting
‘‘$50,000’’.
(c) IRA DEDUCTION ALLOWED TO NONEMPLOYED
SPOUSES.—Subsection (c) of section 219 of such Code is
amended to read as follows:
‘‘(c) SPECIAL RULES FOR CERTAIN MARRIED INDI-
VIDUALS.—
‘‘(1) IN GENERAL.—In the case of an individual
to whom this paragraph applies for the taxable year,
the limitation of paragraph (1) of subsection (b)
shall be equal to the lesser of—
‘‘(A) $2,500, or
‘‘(B) the sum of—
‘‘(i) the compensation includible in
such individual’s gross income for the tax-
able year, plus
‘‘(ii) the compensation includible in
the gross income of such individual’s
spouse for the taxable year reduced by the
amount allowable as a deduction under
subsection (a) to such spouse for such tax-
able year.
‘‘(2) INDIVIDUALS
TO
WHOM
PARAGRAPH
(1)
APPLIES.—Paragraph (1) shall apply to any individ-
ual if—
‘‘(A) such individual files a joint return for
the taxable year, and
‘‘(B) the amount of compensation (if any)
includible in such individual’s gross income for
the taxable year is less than the compensation
includible in the gross income of such individ-
ual’s spouse for the taxable year.’’
(d) INFLATION ADJUSTMENTS.—Subsection (f) of
section 219 of such Code is amended by adding at the
end thereof the following new paragraph:
‘‘(8) INFLATION ADJUSTMENTS.—In the case of
a taxable year beginning in a calendar year after
1994, each dollar amount set forth in subsections
(b)(1)(A), (c)(1)(A), and (g)(3)(B) shall be in-
creased by an amount equal to—
‘‘(A) such dollar amount, multiplied by
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for such calendar
year by substituting ‘calendar year 1993’ for
‘calendar year 1992’ in subparagraph (B)
thereof.
If any increase determined under the preceding sen-
tence is not a multiple of $100, such increase shall
be rounded to the nearest multiple of $100.’’
(e) CONFORMING AMENDMENTS.—
(1) Subsections (a)(1) and (b) of section 408(a)
of such Code are each amended by striking
‘‘$2,000’’ and inserting ‘‘the dollar limitation in ef-
fect under section 219(b)(1)(A)’’.
(2) Subparagraph (A) of section 408(d)(5) of
such Code is amended by striking ‘‘$2,250’’ and in-
serting ‘‘the dollar limitation in effect under section
219(b)(1)(A)’’.
(3) Subsection (j) of section 408 of such Code
is amended by striking ‘‘the $2,000 amounts con-
tained’’ and inserting ‘‘the dollar limitations referred
to’’.
(f) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1993.
SEC. 2. REPAYABLE DISTRIBUTIONS FROM INDIVIDUAL RE-
TIREMENT ACCOUNTS FOR EDUCATIONAL
EXPENSES AND FIRST-TIME HOMEBUYERS.
(a) GENERAL RULE.—Section 408 of the Internal
Revenue Code of 1986 (relating to individual retirement
accounts) is amended by redesignating subsection (p) as
subsection (q) and by inserting after subsection (o) the
following new subsection:
‘‘(p) REPAYABLE DISTRIBUTIONS FROM INDIVIDUAL
RETIREMENT ACCOUNTS FOR EDUCATIONAL EXPENSES
AND FIRST-TIME HOMEBUYERS.—
‘‘(1) IN GENERAL.—Notwithstanding any other
provision of this section, gross income shall not in-
clude any qualified distribution.
‘‘(2) REPAYMENT REQUIREMENT.—
‘‘(A) ADDITION TO TAX.—If the required
recontributions made by the taxpayer during
the repayment period are less than the total re-
quired repayment, the tax imposed by this
chapter for the last taxable year in the repay-
ment period shall be increased by the amount
determined under subparagraph (B).
‘‘(B) DETERMINATION OF AMOUNT.—The
amount determined under this subparagraph
shall be an amount which bears the same ratio
to the adjusted tax amount as—
‘‘(i) the required recontributions dur-
ing the repayment period, bear to
‘‘(ii) the total required repayment.
‘‘(C) TOTAL REQUIRED REPAYMENT.—For
purposes of this paragraph, the term ‘total re-
quired repayment’ means the sum of—
‘‘(i) the qualified distribution, plus
‘‘(ii) interest on the non-recontributed
balance of such distribution for the repay-
ment period computed at the prime rate
and compounded annually.
‘‘(D) REPAYMENT PERIOD.—For purposes
of this paragraph, the term ‘repayment period’
means, with respect to any qualified distribu-
tion, the taxable year in which such distribution
is received and the 15 succeeding taxable years
(10 succeeding taxable years in the case of a
qualified distribution described in paragraph
(3)(B)).
‘‘(E) ADJUSTED TAX AMOUNT.—For pur-
poses of this paragraph, the term ‘adjusted tax
amount’ means, with respect to any qualified
distribution, the sum of—
‘‘(i) the aggregate reduction in the tax
imposed by this chapter for the taxable
shall be determined as if this subsection had
not been enacted.
‘‘(B) AGGREGATION RULES.—For purposes
of this subsection—
‘‘(i) all qualified distributions de-
scribed in paragraph (3)(A) received by an
individual during a taxable year shall be
treated as a single distribution so de-
scribed, and
‘‘(ii) all qualified distributions de-
scribed in paragraph (3)(B) received by an
individual during a taxable year shall be
treated as a single distribution so de-
scribed.’’
(b) EFFECTIVE DATE.—The amendment made by
this subsection shall apply to distributions received in tax-
able years beginning after December 31, 1993.
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