I 
114TH CONGRESS 
1ST SESSION 
H. R. 253 
To amend the Internal Revenue Code of 1986 to provide for the tax treatment 
of small business start-up savings accounts. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 9, 2015 
Mr. HONDA introduced the following bill; which was referred to the Committee 
on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to provide 
for the tax treatment of small business start-up savings 
accounts. 
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 ‘‘Incentivize Growth 
Now In Tomorrow’s Entrepreneurs Act of 2015’’. 
SEC. 2. SMALL BUSINESS START-UP SAVINGS ACCOUNTS. 
(a) IN GENERAL.—Subchapter F of chapter 1 of the 
Internal Revenue Code of 1986 is amended by adding at 
the end the following new part: 
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‘‘PART IX—SMALL BUSINESS START-UP SAVINGS 
ACCOUNTS 
‘‘Sec. 530A. Small Business Start-Up Savings Accounts. 
‘‘SEC. 530A. SMALL BUSINESS START-UP SAVINGS AC-
COUNTS. 
‘‘(a) GENERAL RULE.—A small business start-up 
savings account shall be exempt from taxation under this 
subtitle. Notwithstanding the preceding sentence, the 
small business start-up savings account shall be subject 
to the taxes imposed by section 511 (relating to imposition 
of tax on unrelated business income of charitable organiza-
tions). 
‘‘(b) SMALL BUSINESS START-UP SAVINGS AC-
COUNT.—The term ‘small business start-up savings ac-
count’ means a trust created or organized in the United 
States exclusively for the purpose of making qualified 
start-up expenditures of the individual who is the des-
ignated beneficiary of the trust (and designated as a small 
business start-up savings account at the time created or 
organized), but only if the written governing instrument 
creating the trust meets the following requirements: 
‘‘(1) Except in the case of a rollover contribu-
tion described in subsection (d)(4), no contribution 
will be accepted unless it is in cash, and contribu-
tions will not be accepted if such contribution would 
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result in aggregate contributions for the taxable year 
not exceeding the lesser of— 
‘‘(A) $10,000, or 
‘‘(B) an amount equal to the compensation 
(as defined in section 219(f)(1)) includible in 
the individual’s gross income for such taxable 
year. 
‘‘(2) The trustee is a bank (as defined in sec-
tion 408(n)) or such other person who demonstrates 
to the satisfaction of the Secretary that the manner 
in which such other person will administer the trust 
will be consistent with the requirements of this sec-
tion. 
‘‘(3) No part of the trust funds will be invested 
in life insurance contracts. 
‘‘(4) The assets of the trust will not be commin-
gled with other property except in a common trust 
fund or common investment fund. 
‘‘(c) QUALIFIED START-UP EXPENDITURES.—For 
purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified start- 
up expenditures’ has the meaning given such term 
by section 195. 
‘‘(2) SPECIAL
RULE
FOR
CORPORATION
OR 
PARTNERSHIP INTERESTS.—Such term includes the 
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taxpayer’s allocable share of qualified start-up ex-
penditures of an entity in which the taxpayer di-
rectly holds stock or a capital or profits interest. 
‘‘(3) EXCEPTION.—Such term shall not apply 
to any expenditures paid or incurred in a taxable 
year in connection with a trade or business if there 
is any day during the taxable year on which the 
number of full-time employees of the trade or busi-
ness exceeds 50. 
‘‘(d) TAX TREATMENT OF DISTRIBUTIONS.— 
‘‘(1) IN GENERAL.—Any distribution shall be 
includible in the gross income of the distributee in 
the manner as provided in section 72. 
‘‘(2) DISTRIBUTIONS FOR QUALIFIED START-UP 
EXPENDITURES.— 
‘‘(A) IN GENERAL.—No amount shall be 
includible in gross income under paragraph (1) 
if the qualified start-up expenditures of the in-
dividual during the taxable year are not less 
than the aggregate distributions during the tax-
able year. 
‘‘(B) DISTRIBUTIONS IN EXCESS OF EX-
PENSES.—If such aggregate distributions ex-
ceed such expenses during the taxable year, the 
amount otherwise includible in gross income 
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under paragraph (1) shall be reduced by the 
amount which bears the same ratio to the 
amount which would be includible in gross in-
come under paragraph (1) (without regard to 
this subparagraph) as the qualified start-up ex-
penditures bear to such aggregate distributions. 
‘‘(C) 
DISALLOWANCE
OF
EXCLUDED 
AMOUNTS AS DEDUCTION, CREDIT, OR EXCLU-
SION.—No deduction, credit, or exclusion shall 
be allowed to the taxpayer under any other sec-
tion of this chapter for any qualified start-up 
expenditure to the extent taken into account in 
determining the amount of the exclusion under 
this paragraph. 
‘‘(3) EXCESS CONTRIBUTIONS RETURNED BE-
FORE DUE DATE OF RETURN.— 
‘‘(A) IN
GENERAL.—If any excess con-
tribution is contributed for a taxable year to 
any small business start-up savings account of 
an individual, paragraph (1) shall not apply to 
distributions from the small business start-up 
savings accounts of such individual (to the ex-
tent such distributions do not exceed the aggre-
gate excess contributions to all such accounts of 
such individual for such year) if— 
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‘‘(i) such distribution is received by 
the individual on or before the last day 
prescribed by law (including extensions of 
time) for filing such individual’s return for 
such taxable year, and 
‘‘(ii) such distribution is accompanied 
by the amount of net income attributable 
to such excess contribution. 
‘‘(B) EXCESS
CONTRIBUTION.—For pur-
poses of subparagraph (A), the term ‘excess 
contribution’ means any contribution (other 
than a rollover contribution described in para-
graph (4)) which when added to all previous 
contributions for the taxable year exceeds the 
amount allowable as a contribution under sub-
section (b)(1). 
‘‘(4) ROLLOVER
CONTRIBUTION.—Paragraph 
(1) shall not apply to any amount paid or distrib-
uted from a small business start-up savings account 
to the account beneficiary to the extent the amount 
received is paid into a small business start-up sav-
ings account for the benefit of such beneficiary not 
later than the 60th day after the day on which the 
beneficiary receives the payment or distribution. For 
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(d) EXCESS CONTRIBUTIONS.—Section 4973 of such 
Code is amended by adding at the end the following new 
subsection: 
‘‘(i) EXCESS CONTRIBUTIONS TO SMALL BUSINESS 
START-UP SAVINGS ACCOUNTS.—For purposes of this 
section, in the case of contributions to a small business 
start-up savings account (within the meaning of section 
530A(b)), the term ‘excess contributions’ means the sum 
of— 
‘‘(1) the excess (if any) of— 
‘‘(A) the amount contributed for the tax-
able year to such accounts (other than a roll-
over 
contribution 
described 
in 
section 
530A(d)(4)), over 
‘‘(B) the amount allowable as a contribu-
tion under section 530A(b)(1), and 
‘‘(2) the amount determined under this sub-
section for the preceding taxable year, reduced by 
the sum of— 
‘‘(A) the distributions out of the accounts 
for the taxable year, and 
‘‘(B) the excess (if any) of the maximum 
amount allowable as a contribution under sec-
tions 530A(b)(1) for the taxable year over the 
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