I
104TH CONGRESS
1ST SESSION
H. R. 334
To amend the Internal Revenue Code of 1986 to encourage savings by
increasing the amount of deductible contributions which may be made
to an individual retirement account.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 4, 1995
Mr. NEAL of Massachusetts introduced the following bill; which was referred
to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to encourage
savings by increasing the amount of deductible contribu-
tions which may be made to an individual retirement
account.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Individual Retirement
Improvement Act of 1995’’.
SEC. 2. ACTIVE PARTICIPANTS ALLOWED DEDUCTIONS FOR
50 PERCENT OF CONTRIBUTIONS.
(a) GENERAL RULE.—Paragraph (1) of section
219(g) of the Internal Revenue Code of 1986 (relating to
limitation on deduction of active participants in certain
pension plans) is amended to read as follows:
‘‘(1) IN GENERAL.—If (for any part of any plan
year ending with or within a taxable year) an indi-
vidual or the individual’s spouse is an active partici-
pant, the amount allowed as a deduction under sub-
section (a) for such taxable year shall be the sum
of—
‘‘(A) 100 percent of the amount which
would have been allowable for such taxable year
if each of the dollar limitations contained in
subsections (b)(1)(A) and (c)(2) were reduced
(but not below zero) by the amount determined
under paragraph (2), plus
‘‘(B) 50 percent of the excess of—
‘‘(i) the amount which would have
been allowable for such taxable year with-
out regard to this subsection, over
‘‘(ii) the amount determined under
subparagraph (A).
The percentage in subparagraph (B) shall be re-
duced (but not below 25 percent) by 1 percentage
point for each $1,000 (or fraction thereof) by which
the adjusted gross income of the taxpayer for the
taxable year exceeds $200,000.’’
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to contributions for taxable years
beginning after December 31, 1994.
SEC. 3. HOMEMAKERS ELIGIBLE FOR FULL IRA DEDUC-
TION.
(a) SPOUSAL IRA COMPUTED ON BASIS OF COM-
PENSATION OF BOTH SPOUSES.—Subsection (c) of section
219 of the Internal Revenue Code of 1986 (relating to
special rules for certain married individuals) 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) $2,000, 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.’’
(b) IRA ALLOWED FOR SPOUSES WHO ARE NOT AC-
TIVE PLAN PARTICIPANTS.—Section 219(g)(1) of the In-
ternal Revenue Code of 1986 is amended by striking ‘‘or
the individual’s spouse’’.
(c) CONFORMING AMENDMENTS.—
(1) Paragraph (2) of section 219(f) of the In-
ternal Revenue Code of 1986 (relating to other defi-
nitions and special rules) is amended by striking
‘‘subsections (b) and (c)’’ and inserting ‘‘subsection
(b)’’.
(2) Section 408(d)(5) of such Code is amended
by striking ‘‘$2,250’’ and inserting ‘‘$2,000’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1994.
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