‘‘(C) subsection (i) (relating to treatment 
after death of account beneficiary). 
‘‘(l) ILLEGAL ALIEN.—For purposes of this section, 
the term ‘illegal alien’ means an alien who— 
‘‘(1) entered the United States without inspec-
tion or at any time or place other than that des-
ignated by the Secretary of Homeland Security; 
‘‘(2) was admitted as a nonimmigrant and, at 
the time the alien was taken into custody by the 
State or political subdivision, had failed to— 
‘‘(A) maintain the nonimmigrant status in 
which the alien was admitted or to which it was 
changed under section 248 of the Immigration 
and Nationality Act; or 
‘‘(B) comply with the conditions of the sta-
tus described in subparagraph (A); 
‘‘(3) was admitted as an immigrant and subse-
quently failed to comply with the requirements of 
that status; or 
‘‘(4) failed to depart the United States as re-
quired under a voluntary departure agreement or 
under a final order of removal.’’. 
(b) DEDUCTION ALLOWED
IN ARRIVING
AT AD-
JUSTED GROSS INCOME.—Subsection (a) of section 62 of 
such Code (defining adjusted gross income) is amended 
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by inserting before the last sentence the following new 
paragraph: 
‘‘(22) HOME ACCOUNT CONTRIBUTIONS.—The 
deduction allowed by section 224 (relating to HOME 
Accounts).’’. 
(c) COORDINATION
WITH
OTHER
LIMITATIONS 
BASED ON ADJUSTED GROSS INCOME.— 
(1) 
Sections 
86(b)(2)(A), 
135(c)(4)(A), 
137(b)(3)(A), and 221(b)(2)(C)(i) of such Code are 
each amended by inserting ‘‘224,’’ after ‘‘222,’’. 
(2) Clause (i) of section 222(b)(2)(C) of such 
Code is amended by inserting ‘‘224,’’ after ‘‘199,’’. 
(d) TAX ON EXCESS CONTRIBUTIONS.— 
(1) IN
GENERAL.—Subsection (a) of section 
4973 of such Code (relating to tax on excess con-
tributions to certain tax-favored accounts and annu-
ities) is amended by striking ‘‘or’’ at the end of 
paragraph (4), by inserting ‘‘or’’ at the end of para-
graph (5), and by inserting after paragraph (5) the 
following new paragraph: 
‘‘(6) a HOME Account (as defined in section 
224(d)),’’. 
(2) EXCESS CONTRIBUTIONS.—Section 4973 of 
such Code is amended by adding at the end the fol-
lowing new subsection: 
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‘‘(h) EXCESS
CONTRIBUTIONS
TO
HOME AC-
COUNTS.—For purposes of this section, in the case of 
HOME Accounts (as defined in section 224(d)), the term 
‘excess contributions’ means the sum of— 
‘‘(1) the excess (if any) of— 
‘‘(A) the amount contributed for the tax-
able year to the accounts (other than a rollover 
contribution), over 
‘‘(B) the amount allowable as a deduction 
under section 224 for such contributions, 
‘‘(2) the amount determined under this sub-
section for the preceding taxable year reduced by the 
sum of— 
‘‘(A) the distributions out of the account 
for the taxable year which were included in the 
gross income of the payee under section 
224(e)(1), 
‘‘(B) the distributions out of the account 
for the taxable year to which the rules similar 
to the rules of section 408(d)(5) apply, and 
‘‘(C) the excess (if any) of the maximum 
amount allowable as a deduction under section 
224 for the taxable year over the amount con-
tributed (determined without regard to the 
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rules referred to in section 219(g)(4)) to the ac-
counts for the taxable year. 
For purposes of this subsection, any contribution 
which is distributed from a HOME Account in a dis-
tribution to which rules similar to the rules of sec-
tion 408(d)(4) apply shall be treated as an amount 
not contributed.’’. 
(e) TAX ON PROHIBITED TRANSACTIONS.— 
(1) Paragraph (1) of section 4975(e) of such 
Code (relating to prohibited transactions) is amend-
ed by redesignating subparagraphs (F) and (G) as 
subparagraphs (G) and (H), respectively, and by in-
serting after subparagraph (E) the following new 
subparagraph: 
‘‘(F) a HOME Account described in sec-
tion 224(d),’’. 
(2) Subsection (c) of section 4975 of such Code 
is amended by adding at the end the following new 
paragraph: 
‘‘(7) SPECIAL RULE FOR HOME ACCOUNTS.—An 
individual for whose benefit a HOME Account (as 
defined in section 224(d)) is established shall be ex-
empt from the tax imposed by this section with re-
spect to any transaction concerning such account 
(which would otherwise be taxable under this sec-
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tion) if, with respect to such transaction, the ac-
count ceases to be a HOME Account by reason of 
the application of section 224(f)(2)(A) to such ac-
count.’’. 
(f) FAILURE TO PROVIDE REPORTS ON HOME AC-
COUNTS.—Paragraph (2) of section 6693(a) of such Code 
is amended by redesignating subparagraphs (D) and (E) 
as subparagraphs (E) and (F), respectively, and by insert-
ing after subparagraph (C) the following new subpara-
graph: 
‘‘(D) section 224(k) (relating to HOME 
Accounts),’’. 
(g) CLERICAL AMENDMENT.—The table of sections 
for part VII of subchapter B of chapter 1 of such Code 
is amended by striking the item relating to section 224 
and inserting the following: 
‘‘Sec. 224. HOME Accounts. 
‘‘Sec. 225. Cross reference.’’. 
(h) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
Æ 
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