I 
111TH CONGRESS 
1ST SESSION H. R. 2277 
To establish and provide for the treatment of Individual Development 
Accounts, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 6, 2009 
Mr. POMEROY (for himself, Mr. PITTS, Ms. SCHWARTZ, and Mr. BRADY of 
Texas) introduced the following bill; which was referred to the Committee 
on Ways and Means 
A BILL 
To establish and provide for the treatment of Individual 
Development Accounts, 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. SHORT TITLE. 
This Act may be cited as the ‘‘Savings for Working 
Families Act of 2009’’. 
SEC. 2. PURPOSES. 
The purposes of this Act are to provide for the estab-
lishment of individual development account programs that 
will— 
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(1) provide individuals and families with limited 
means an opportunity to accumulate assets and to 
enter the financial mainstream, 
(2) promote education, home ownership, and 
the development of small businesses, 
(3) stabilize families and build communities, 
and 
(4) support continued United States economic 
expansion. 
SEC. 3. DEFINITIONS. 
As used in this Act: 
(1) ELIGIBLE INDIVIDUAL.— 
(A) IN GENERAL.—The term ‘‘eligible indi-
vidual’’ means, with respect to any taxable year, 
an individual who— 
(i) has attained the age of 18 but not 
the age of 61 as of the last day of such 
taxable year, 
(ii) is a citizen or lawful permanent 
resident (within the meaning of section 
7701(b)(6) of the Internal Revenue Code 
of 1986) of the United States as of the 
last day of such taxable year, 
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(iii) was not a student (as defined in 
section 151(c)(4) of such Code) for the im-
mediately preceding taxable year, 
(iv) is not an individual with respect 
to whom a deduction under section 151 of 
such Code is allowable to another taxpayer 
for a taxable year of the other taxpayer 
ending during the immediately preceding 
taxable year of the individual, 
(v) is not a taxpayer described in sub-
section (c), (d), or (e) of section 6402 of 
such Code for the immediately preceding 
taxable year, 
(vi) is not a taxpayer described in sec-
tion 1(d) of such Code for the immediately 
preceding taxable year, and 
(vii) is a taxpayer the modified ad-
justed gross income of whom for the imme-
diately preceding taxable year does not ex-
ceed— 
(I) $20,000, in the case of a tax-
payer described in section 1(c) of such 
Code, 
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(II) $30,000, in the case of a 
taxpayer described in section 1(b) of 
such Code, and 
(III) $40,000, in the case of a 
taxpayer described in section 1(a) of 
such Code. 
(B) INFLATION ADJUSTMENT.— 
(i) IN GENERAL.—In the case of any 
taxable year beginning after 2010, each 
dollar amount referred to in subparagraph 
(A)(vii) shall be increased by an amount 
equal to— 
(I) such dollar amount, multi-
plied by 
(II) the cost-of-living adjustment 
determined under section (1)(f)(3) of 
the Internal Revenue Code of 1986 
for the calendar year in which the tax-
able year begins, by substituting 
‘‘2009’’ for ‘‘1992’’. 
(ii) ROUNDING.—If any amount as 
adjusted under clause (i) is not a multiple 
of $50, such amount shall be rounded to 
the nearest multiple of $50. 
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(C) MODIFIED
ADJUSTED
GROSS
IN-
COME.—For purposes of subparagraph (A)(v), 
the term ‘‘modified adjusted gross income’’ 
means adjusted gross income— 
(i) determined without regard to sec-
tions 86, 893, 911, 931, and 933 of the 
Internal Revenue Code of 1986, and 
(ii) increased by the amount of inter-
est received or accrued by the taxpayer 
during the taxable year which is exempt 
from tax. 
(2) INDIVIDUAL
DEVELOPMENT
ACCOUNT.— 
The term ‘‘Individual Development Account’’ means 
an account established for an eligible individual as 
part of a qualified individual development account 
program, but only if the written governing instru-
ment creating the account meets the following re-
quirements: 
(A) The owner of the account is the indi-
vidual for whom the account was established. 
(B) No contribution will be accepted unless 
it is in cash, and, except in the case of any 
qualified rollover, contributions will not be ac-
cepted for the taxable year in excess of $1,500 
on behalf of any individual. 
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(C) The trustee of the account is a quali-
fied financial institution. 
(D) The assets of the account will not be 
commingled with other property except in a 
common trust fund or common investment 
fund. 
(E) Except as provided in section 7(b), any 
amount in the account may be paid out only for 
the purpose of paying the qualified expenses of 
the account owner. 
(3) PARALLEL ACCOUNT.—The term ‘‘parallel 
account’’ means a separate, parallel individual or 
pooled account for all matching funds and earnings 
dedicated to an Individual Development Account 
owner as part of a qualified individual development 
account program, the trustee of which is a qualified 
financial institution. 
(4) QUALIFIED FINANCIAL INSTITUTION.— 
(A) IN GENERAL.—The term ‘‘qualified fi-
nancial institution’’ means any person author-
ized to be a trustee of any individual retirement 
account under section 408(a)(2) of the Internal 
Revenue Code of 1986. 
(B) RULE OF CONSTRUCTION.— 
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(i) IN
GENERAL.—Nothing in this 
paragraph shall be construed as preventing 
a person described in subparagraph (A) 
from collaborating with 1 or more qualified 
nonprofit organizations or Indian tribes to 
carry out an individual development ac-
count program established under section 4. 
(ii) QUALIFIED
NONPROFIT
ORGANI-
ZATION.—The term ‘‘qualified nonprofit 
organization’’ means— 
(I) any organization described in 
section 501(c)(3) of the Internal Rev-
enue Code of 1986 and exempt from 
taxation under section 501(a) of such 
Code, 
(II) any community development 
financial institution certified by the 
Community Development Financial 
Institution Fund, 
(III) any credit union chartered 
under Federal or State law, or 
(IV) any public housing agency 
as defined in section 3(b)(6) of the 
United States Housing Act of 1937 
(42 U.S.C. 1437a(b)(6)). 
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(iii) INDIAN TRIBE.—The term ‘‘In-
dian tribe’’ means any Indian tribe as de-
fined in section 4(12) of the Native Amer-
ican Housing Assistance and Self-Deter-
mination 
Act 
of 
1996 
(25 
U.S.C. 
4103(12)), and includes any tribally des-
ignated housing entity (as defined in sec-
tion 4(21) of such Act (25 U.S.C. 
4103(21))), tribal subsidiary, subdivision, 
or other wholly owned tribal entity. 
(5) QUALIFIED INDIVIDUAL DEVELOPMENT AC-
COUNT PROGRAM.—The term ‘‘qualified individual 
development account program’’ means a program es-
tablished upon approval of the Secretary under sec-
tion 4 after December 31, 2009, under which— 
(A) Individual Development Accounts and 
parallel accounts are held in trust by a qualified 
financial institution, and 
(B) additional activities determined by the 
Secretary, in consultation with the Secretary of 
Health and Human Services, as necessary to re-
sponsibly develop and administer accounts, in-
cluding recruiting, providing financial education 
and other training to Account owners, and reg-
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ular program monitoring, are carried out by the 
qualified financial institution. 
(6) QUALIFIED EXPENSE DISTRIBUTION.— 
(A) IN GENERAL.—The term ‘‘qualified ex-
pense distribution’’ means any amount paid (in-
cluding through electronic payments) or distrib-
uted out of an Individual Development Account 
or a parallel account established for an eligible 
individual if such amount— 
(i) is used exclusively to pay the quali-
fied expenses of the Individual Develop-
ment Account owner or such owner’s 
spouse or dependents, 
(ii) is paid by the qualified financial 
institution— 
(I) except as otherwise provided 
in this clause, directly to the unre-
lated third party to whom the amount 
is due, 
(II) in the case of any qualified 
rollover, directly to another Individual 
Development Account and parallel ac-
count, or 
(III) in the case of a qualified 
final distribution, directly to the 
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spouse, dependent, or other named 
beneficiary of the deceased Account 
owner, and 
(iii) is paid after the Account owner 
has completed a financial education course 
if required under section 5(b). 
(B) QUALIFIED EXPENSES.— 
(i) IN GENERAL.—The term ‘‘qualified 
expenses’’ means any of the following ex-
penses approved by the qualified financial 
institution: 
(I) Qualified higher education ex-
penses. 
(II) Qualified first-time home-
buyer costs. 
(III) Qualified business capital-
ization or expansion costs. 
(IV) Qualified rollovers. 
(V) Qualified final distribution. 
(ii) QUALIFIED
HIGHER
EDUCATION 
EXPENSES.— 
(I) 
IN
GENERAL.—The 
term 
‘‘qualified higher education expenses’’ 
has the meaning given such term by 
section 529(e)(3) of the Internal Rev-
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enue Code of 1986, determined by 
treating the Account owner, the own-
er’s spouse, or one or more of the 
owner’s dependents as a designated 
beneficiary, and reduced as provided 
in section 25A(g)(2) of such Code. 
(II) COORDINATION WITH OTHER 
BENEFITS.—The amount of expenses 
which may be taken into account for 
purposes of section 135, 529, or 530 
of such Code for any taxable year 
shall be reduced by the amount of any 
qualified higher education expenses 
taken into account as qualified ex-
pense distributions during such tax-
able year. 
(iii) QUALIFIED
FIRST-TIME
HOME-
BUYER COSTS.—The term ‘‘qualified first- 
time homebuyer costs’’ means qualified ac-
quisition costs (as defined in section 
72(t)(8)(C) of the Internal Revenue Code 
of 1986) with respect to a principal resi-
dence (within the meaning of section 121 
of such Code) for a qualified first-time 
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homebuyer 
(as 
defined 
in 
section 
72(t)(8)(D)(i) of such Code). 
(iv) QUALIFIED
BUSINESS
CAPITAL-
IZATION OR EXPANSION COSTS.— 
(I) 
IN
GENERAL.—The 
term 
‘‘qualified business capitalization or 
expansion costs’’ means qualified ex-
penditures for the capitalization or ex-
pansion of a qualified business pursu-
ant to a qualified business plan. 
(II) 
QUALIFIED
EXPENDI-
TURES.—The term ‘‘qualified expendi-
tures’’ means expenditures normally 
associated with starting or expanding 
a business and included in a qualified 
business plan, including costs for cap-
ital, plant, and equipment, inventory 
expenses, and attorney and accounting 
fees. 
(III) 
QUALIFIED
BUSINESS.— 
The term ‘‘qualified business’’ means 
any business that does not contravene 
any law. 
(IV) 
QUALIFIED
BUSINESS 
PLAN.—The term ‘‘qualified business 
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plan’’ means a business plan which 
has been approved by the qualified fi-
nancial institution and which meets 
such requirements as the Secretary 
may specify. 
(v) 
QUALIFIED
ROLLOVERS.—The 
term ‘‘qualified rollover’’ means the com-
plete distribution of the amounts in an In-
dividual Development Account and parallel 
account to another Individual Development 
Account and parallel account established in 
another qualified financial institution for 
the benefit of the Account owner. 
(vi) 
QUALIFIED
FINAL
DISTRIBU-
TION.—The term ‘‘qualified final distribu-
tion’’ means, in the case of a deceased Ac-
count owner, the complete distribution of 
the amounts in the Individual Development 
Account and parallel account directly to 
the spouse, any dependent, or other named 
beneficiary of the deceased. 
(7) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of the Treasury. 
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SEC. 4. STRUCTURE AND ADMINISTRATION OF QUALIFIED 
INDIVIDUAL DEVELOPMENT ACCOUNT PRO-
GRAMS. 
(a) ESTABLISHMENT OF QUALIFIED INDIVIDUAL DE-
VELOPMENT ACCOUNT PROGRAMS.—Any qualified finan-
cial institution may apply to the Secretary for approval 
to establish 1 or more qualified individual development ac-
count programs which meet the requirements of this Act. 
(b) BASIC PROGRAM STRUCTURE.— 
(1) IN GENERAL.—All qualified individual de-
velopment account programs shall consist of the fol-
lowing 2 components for each participant: 
(A) An Individual Development Account to 
which an eligible individual may contribute cash 
in accordance with section 5. 
(B) A parallel account to which all match-
ing funds shall be deposited in accordance with 
section 6. 
(2) TAILORED IDA PROGRAMS.—A qualified fi-
nancial institution may tailor its qualified individual 
development account program to allow matching 
funds to be spent on 1 or more of the categories of 
qualified expenses. 
(c) COORDINATION WITH PUBLIC HOUSING AGENCY 
INDIVIDUAL SAVINGS ACCOUNTS.—Section 3(e)(2) of the 
United States Housing Act of 1937 (42 U.S.C. 
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1437a(e)(2)) is amended by inserting ‘‘or in any Indi-
vidual Development Account established under the Sav-
ings for Working Families Act of 2009’’ after ‘‘sub-
section’’. 
(d) TAX TREATMENT OF PARALLEL ACCOUNTS.— 
(1) IN GENERAL.—Chapter 77 of the Internal 
Revenue Code of 1986 (relating to miscellaneous 
provisions) is amended by adding at the end the fol-
lowing new section: 
‘‘SEC. 7529. TAX INCENTIVES FOR INDIVIDUAL DEVELOP-
MENT PARALLEL ACCOUNTS. 
‘‘For purposes of this title— 
‘‘(1) 
any 
account 
described 
in 
section 
4(b)(1)(B) of the Savings for Working Families Act 
of 2009 shall be exempt from taxation, 
‘‘(2) except as provided in section 45R, no item 
of income, expense, basis, gain, or loss with respect 
to such an account may be taken into account, and 
‘‘(3) any amount withdrawn from such an ac-
count shall not be includible in gross income.’’. 
(2) CONFORMING AMENDMENT.—The table of 
sections for chapter 77 of such Code is amended by 
adding at the end the following new item: 
‘‘Sec. 7529. Tax incentives for individual development parallel accounts.’’. 
(e) COORDINATION OF CERTAIN EXPENSES.—Sec-
tion 25A(g)(2) of the Internal Revenue Code of 1986 is 
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