237 
501(c)(18) if such individual has attained age 701⁄2 
before the close of such individual’s taxable year for 
which the contribution was made.’’. 
(E) Section 4973(b)(2)(C) is amended by 
striking ‘‘(determined without regard to section 
219(f)(6))’’. 
(2) AMENDMENTS RELATING TO ROTH IRA CON-
TRIBUTION LIMITS.— 
(A) Section 408A(c), as amended by this 
Act, is amended— 
(i) by striking paragraphs (1) and (2) 
and inserting the following new para-
graphs: 
‘‘(1) MAXIMUM CONTRIBUTION.— 
‘‘(A) 
IN
GENERAL.—The 
aggregate 
amount of contributions for any taxable year to 
all Roth IRAs maintained for the benefit of an 
individual shall not exceed the lesser of— 
‘‘(i) $5,500, or 
‘‘(ii) an amount equal to the com-
pensation includible in the individual’s 
gross income for such taxable year. 
‘‘(B) CATCH-UP CONTRIBUTIONS FOR INDI-
VIDUALS 50 OR OLDER.—In the case of an indi-
vidual who has attained the age of 50 before 
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the close of the taxable year, the amount in ef-
fect under subparagraph (A)(i) for such taxable 
year shall be increased by $1,000. 
‘‘(2) SPECIAL RULE FOR CERTAIN MARRIED IN-
DIVIDUALS.—In the case of an individual to whom 
this paragraph applies for the taxable year, the limi-
tation of paragraph (1) shall be equal to the lesser 
of— 
‘‘(A) the dollar amount in effect under 
paragraph (1)(A)(i) for the taxable year, 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— 
‘‘(I) the amount allowed as a de-
duction under section 219(a) to such 
spouse for such taxable year, 
‘‘(II) the amount of any contribu-
tion on behalf of such spouse to a 
Roth IRA for such taxable year. 
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‘‘(3) INDIVIDUALS TO WHOM PARAGRAPH (2) 
APPLIES.—Paragraph (2) shall apply to any indi-
vidual 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.’’. 
(ii) by striking ‘‘paragraph (2)’’ in 
paragraph (6) and inserting ‘‘paragraph 
(1)’’, 
(iii) by striking ‘‘the rule of section 
219(f)(3) shall apply’’ in paragraph (7) 
and inserting the following: ‘‘a taxpayer 
shall be deemed to have made a contribu-
tion to a Roth IRA on the last day of the 
preceding taxable year if the contribution 
is made on account of such taxable year 
and is made not later than the time pre-
scribed by law for filing the return for 
such taxable year (not including extensions 
thereof)’’, and 
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(iv) by adding at the end the following 
new paragraphs: 
‘‘(8) COMPENSATION.—For purposes of this 
section, the term ‘compensation’ includes earned in-
come (as defined in section 401(c)(2)). The term 
‘compensation’ does not include any amount received 
as a pension or annuity and does not include any 
amount received as deferred compensation. For pur-
poses of this paragraph, section 401(c)(2) shall be 
applied as if the term trade or business for purposes 
of section 1402 included service described in sub-
section (c)(6) thereof. The term compensation in-
cludes any differential wage payment (as defined in 
section 3401(h)(2)). 
‘‘(9) MARRIED
INDIVIDUALS.—The limitation 
under this subsection shall be computed separately 
for each individual, and this section shall be applied 
without regard to any community property laws. 
‘‘(10) SPECIAL
RULE
FOR
COMPENSATION 
EARNED
BY
MEMBERS
OF
ARMED
FORCES
FOR 
SERVICES IN COMBAT ZONE.—For purposes of para-
graphs (1)(A)(ii) and (2), the amount of compensa-
tion includible in an individual’s gross income shall 
be determined without regard to section 112.’’. 
(B) Section 408A(d)(3)(A) is amended— 
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(i) by inserting ‘‘and’’ at the end of 
clause (i), 
(ii) by striking ‘‘, and’’ at the end of 
clause (ii) and inserting a period, 
(iii) by striking clause (iii), and 
(iv) by striking the last sentence. 
(3) AMENDMENTS RELATING TO TRADITIONAL 
IRAS.— 
(A) Section 408(d)(4) is amended— 
(i) by striking subparagraph (B) and 
inserting the following: 
‘‘(B) in the case of simplified employee 
pension, such contribution is not excluded from 
gross income under section 402(h),’’. 
(ii) by adding at the end the fol-
lowing: ‘‘This paragraph shall not apply to 
any contribution to a simple retirement ac-
count.’’. 
(B) Section 408(d)(5)(A) is amended— 
(i) by striking ‘‘in effect under section 
219(b)(1)(A)’’ and inserting ‘‘in effect with 
respect to the taxpayer for the taxable year 
under section 408A(c)(1)(A)(i)’’, 
(ii) by striking ‘‘the amount allowable 
as a deduction’’ and all that follows 
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through ‘‘such excess contribution.’’ and 
inserting ‘‘the amount that may be contrib-
uted under section 408A(c)(1) for the tax-
able year for which the contribution was 
made if such distribution is received after 
the date described in paragraph (4).’’, 
(iii) by adding at the end of subpara-
graph (A) the following: ‘‘This paragraph 
shall not apply to any contribution to a 
simple retirement account.’’, and 
(iv) by striking the last sentence. 
(C) Section 408 is amended by striking 
subsection (o). 
(4) AMENDMENTS
RELATING
TO
SIMPLE
RE-
TIREMENT ACCOUNTS.— 
(A) Section 408(p)(2)(D)(ii) is amended by 
striking ‘‘means a plan, contract’’ and all that 
follows through the period at the end and in-
serting the following: ‘‘means— 
‘‘(I) a plan described in section 
401(a) which includes a trust exempt 
from tax under section 501(a), 
‘‘(II) an annuity plan described 
in section 403(a), 
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‘‘(III) an eligible deferred com-
pensation plan (as defined in section 
457(b)) of an eligible employer de-
scribed in section 457(e)(1)(A)), 
‘‘(IV) an annuity contract de-
scribed in section 403(b), 
‘‘(V) a simplified employee pen-
sion (within the meaning of section 
408(k)), 
‘‘(VI) any simple retirement ac-
count (within the meaning of section 
408(p)), or 
‘‘(VII) a trust described in sec-
tion 501(c)(18).’’. 
(B) Section 408(p)(8) is amended to read 
as follows: 
‘‘(8) COORDINATION
WITH
MAXIMUM
LIMITA-
TION UNDER SUBSECTION (a).—In the case of a 
simple retirement account, for purposes of sub-
sections (a)(1) and (b)(2), contributions may not ex-
ceed the sum of— 
‘‘(A) the dollar amount in effect under 
paragraph (2)(A)(ii), and 
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(iii) by striking the last sentence and 
inserting the following: ‘‘Paragraph (2) 
shall be determined separately with respect 
to any simplified employee pension (within 
the meaning of section 408(k)) and any 
simple retirement account (within the 
meaning of section 408(p)).’’. 
(B) 
ROTH
IRAS.—Section 
4973(f) 
is 
amended by striking ‘‘sections 408A(c)(2) and 
(c)(3)’’ each place it appears and inserting 
‘‘section 408A(c)(1)’’. 
(7) AMENDMENTS RELATING TO SAVER’S CRED-
IT.—Section 25B(d)(1)(A) is amended to read as 
follows: 
‘‘(A) the amounts— 
‘‘(i) paid in cash for the taxable year 
by or on behalf of an individual to all Roth 
IRAs maintained for such individual’s ben-
efit, and 
‘‘(ii) contributed on behalf of the indi-
vidual to a plan described in section 
501(c)(18),’’. 
(8) OTHER CONFORMING AMENDMENTS.— 
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(A) Section 86(f)(3) is amended by strik-
ing 
‘‘219(f)(1)’’ 
and 
inserting 
‘‘section 
408A(c)(8)’’. 
(B) Section 132(m)(3) is amended by 
striking ‘‘section 219(g)(5)’’ and inserting ‘‘sec-
tion 408(p)(2)(D)(ii)’’. 
(C)(i) Section 223(d) is amended— 
(I) by redesignating paragraph (4) as 
paragraph (7), 
(II) by inserting after paragraph (3) 
the following new paragraphs: 
‘‘(4) RECONTRIBUTED
AMOUNTS.—No deduc-
tion shall be allowed under this section with respect 
to a rollover contribution described in subsection 
(f)(5). 
‘‘(5) TIME
WHEN
CONTRIBUTIONS
DEEMED 
MADE.—For purposes of this section, a taxpayer 
shall be deemed to have made a contribution to a 
health savings account on the last day of the pre-
ceding taxable year if the contribution is made on 
account of such taxable year and is made not later 
than the time prescribed by law for filing the return 
for such taxable year (not including extensions 
thereof). 
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‘‘(6) EMPLOYER
PAYMENTS.—Except as pro-
vided in section 106(d), for purposes of this title, 
any amount paid by an employer to a health savings 
account shall be treated as payment of compensation 
to the employee (other than a self-employed indi-
vidual who is an employee within the meaning of 
section 401(c)(1)) includible in his gross income in 
the taxable year for which the amount was contrib-
uted, whether or not a deduction for such payment 
is allowable under this section to the employee.’’. 
(ii) Section 223(d)(7), as so redesignated, 
is amended by striking subparagraphs (A), (B), 
and (C), and redesignating subparagraphs (D) 
and (E) as subparagraphs (A) and (B), respec-
tively. 
(D) Section 409A(d)(2)(A) is amended by 
striking ‘‘subparagraph (A) or (B) of section 
219(g)(5) (without regard to subparagraph 
(A)(iii))’’ 
and 
inserting 
‘‘section 
408(p)(2)(D)(ii) (without regard to subclause 
(III) thereof)’’. 
(E) Section 501(c)(18)(D)(i) is amended 
by striking ‘‘section 219(b)(3)’’ and inserting 
‘‘section 219(a)’’. 
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(F) Section 877A(d)(4)(A) is amended by 
striking ‘‘section 219(g)(5)’’ and inserting 
‘‘408(p)(2)(D)(ii)’’. 
(G) Section 6652 is amended by striking 
subsection (g). 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2014. 
SEC. 1603. INFLATION ADJUSTMENT FOR ROTH IRA CON-
TRIBUTIONS. 
(a) IN GENERAL.—Subsection (c) of section 408A, 
as amended by this Act, is amended by adding at the end 
the following new paragraph: 
‘‘(11) COST-OF-LIVING
ADJUSTMENT.—In the 
case of any taxable year beginning after 2023, the 
dollar amount in paragraph (1)(A)(i) 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(c)(2)(A) for the calendar 
year in which the taxable year begins, deter-
mined by substituting ‘calendar year 2022’ for 
‘calendar year 2012’ in clause (ii) thereof. 
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If any increase determined under the preceding sen-
tence is not a multiple of $500, such increase shall 
be rounded to the next lowest multiple of $500.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2014. 
SEC. 1604. REPEAL OF SPECIAL RULE PERMITTING RE-
CHARACTERIZATION 
OF 
ROTH 
IRA 
CON-
TRIBUTIONS 
AS 
TRADITIONAL 
IRA 
CON-
TRIBUTIONS. 
(a) IN GENERAL.—Section 408A(d) is amended by 
striking paragraph (6) and by redesignating paragraph 
(7) as paragraph (6). 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2014. 
SEC. 1605. REPEAL OF EXCEPTION TO 10-PERCENT PEN-
ALTY FOR FIRST HOME PURCHASES. 
(a) IN GENERAL.—Section 72(t)(2) is amended by 
striking subparagraph (F). 
(b) ROTH
IRAS.—Subparagraph (A) of section 
408A(d)(2) is amended by inserting ‘‘or’’ at the end of 
clause (ii), and by striking ‘‘, or’’ at the end of clause 
(iii) and inserting a period, and by striking clause (iv). 
(c) CONFORMING AMENDMENT.— 
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(1) Section 72(t) is amended by striking para-
graph (8). 
(2) Section 408A(d), as amended by this Act, 
is amended by striking paragraph (5) and by redes-
ignating paragraph (6) as paragraph (5). 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to distributions after December 31, 
2014. 
PART 2—EMPLOYER-PROVIDED PLANS 
SEC. 1611. TERMINATION FOR NEW SEPS. 
(a) IN GENERAL.— 
(1) Section 408(k) is amended by redesignating 
paragraph (9) as paragraph (10) and by inserting 
after paragraph (8) the following new paragraph: 
‘‘(9) TERMINATION.—This subsection shall not 
apply to years beginning after December 31, 2014. 
The preceding sentence shall not apply to any sim-
plified employee pension of an employer if such sim-
plified employee pension, and the terms thereof, 
meet the requirements of this subsection on and 
after such date.’’. 
(2) Section 402(h) is amended by adding at the 
end the following new paragraph: 
‘‘(4) TERMINATION.—This subsection shall not 
apply to any simplified employee pension the ar-
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