I 
116TH CONGRESS 
2D SESSION 
H. R. 8657 
To amend the Internal Revenue Code of 1986 to provide emergency savings 
accounts for individuals. 
IN THE HOUSE OF REPRESENTATIVES 
OCTOBER 23, 2020 
Mr. CLOUD (for himself, Mr. WEBER of Texas, Mr. GOHMERT, and Mr. KING 
of Iowa) introduced the following bill; which was referred to the Com-
mittee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to provide 
emergency savings accounts for individuals. 
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 ‘‘Emergency Savings 
Accounts Act of 2020’’. 
SEC. 2. DEDUCTION FOR CONTRIBUTIONS TO EMERGENCY 
SAVINGS ACCOUNTS. 
(a) IN GENERAL.—Part VII of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to 
additional itemized deductions for individuals) is amended 
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‘‘(1) IN GENERAL.—The term ‘emergency sav-
ings account’ means a trust created or organized in 
the United States as an emergency savings account 
exclusively for the purpose of paying the qualified 
disaster and public health emergency expenses of the 
account beneficiary, but only if the written governing 
instrument creating the trust meets the following re-
quirements: 
‘‘(A) Except in the case of a rollover con-
tribution described in subsection (f)(5), no con-
tribution will be accepted— 
‘‘(i) unless it is in cash, or 
‘‘(ii) to the extent such contribution, 
when added to previous contributions to 
the trust for the calendar year, exceeds the 
dollar limitation in effect under subsection 
(b). 
‘‘(B) The trustee is a bank (as defined in 
section 408(n)), an insurance company (as de-
fined in section 816), or another person who 
demonstrates to the satisfaction of the Sec-
retary that the manner in which such person 
will administer the trust will be consistent with 
the requirements of this section. 
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‘‘(C) No part of the trust assets will be in-
vested in life insurance contracts. 
‘‘(D) The assets of the trust will not be 
commingled with other property except in a 
common trust fund or common investment 
fund. 
‘‘(E) The interest of an individual in the 
balance in his account is nonforfeitable. 
‘‘(2) 
QUALIFIED
DISASTER
AND
PUBLIC 
HEALTH EMERGENCY EXPENSES.—The term ‘quali-
fied disaster and public health emergency expenses’ 
means— 
‘‘(A) disaster mitigation expenses, 
‘‘(B) disaster recovery expenses, 
‘‘(C) public health emergency expenses, 
and 
‘‘(D) unemployment related expenses. 
‘‘(3) DISASTER
MITIGATION
EXPENSES.—The 
term ‘disaster mitigation expenses’ means expenses 
for any of the following with respect to the residence 
referred to in subsection (c): 
‘‘(A) Tornado safe rooms manufactured or 
constructed in accordance with FEMA 320 or 
FEMA 361 guidance or tornado shelters manu-
factured or constructed in accordance with the 
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National 
Storm 
Shelter/International 
Code 
Council 500 standard. 
‘‘(B) Opening protection, including impact 
and wind resistant windows, exterior doors, and 
garage doors. 
‘‘(C) Reinforcement of roof-to-wall and 
floor-to-wall connections for wind or seismic ac-
tivity. 
‘‘(D) Roof covering for impact, fire, or 
high wind resistance. 
‘‘(E) Cripple and shear walls to resist seis-
mic activity. 
‘‘(F) Flood resistant building materials. 
‘‘(G) Elevating structures and utilities 
above base flood elevation. 
‘‘(H) Fire resistant exterior wall assem-
blies/systems. 
‘‘(I) Lightning protection systems. 
‘‘(J) Whole home standby generators. 
‘‘(K) Any activity specified by the Sec-
retary as appropriate to mitigate the risks of 
future hazards (including earthquake, flood, 
hail, hurricane, sinkhole, lightning, power out-
age, tornado, and wildfire) and other natural 
disasters. 
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‘‘(4) DISASTER
RECOVERY
EXPENSES.—The 
term ‘disaster recovery expenses’ means with respect 
to the residence referred to in subsection (c) any ex-
pense incurred to replace or repair disaster-related 
uninsured personal casualty personal losses totaling 
$1,000 or greater. 
‘‘(5) DISASTER-RELATED
UNINSURED
PER-
SONAL CASUALTY LOSS.—The term ‘disaster-related 
uninsured personal casualty loss’ means a personal 
casualty loss (as defined in section 165(h)(3)(B), de-
termined without regard to the second sentence 
thereof) attributable to a State or federally declared 
disaster for which a deduction is allowable under 
section 165 (without regard to subsection (h)(1)). 
‘‘(6) FEDERALLY
DECLARED
DISASTER.—The 
term ‘federally declared disaster’ has the meaning 
given such term by section 165(i)(5). 
‘‘(7) 
PUBLIC
HEALTH
EMERGENCY
EX-
PENSES.—The term ‘public health emergency ex-
penses’ means expenses for any of the following with 
respect to an individual referred to in subsection (c) 
if paid or incurred while a public health emergency 
declaration is in effect and while such individual is 
unemployed or has their employment status reduced 
from full-time status: 
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‘‘(A) Child care expenses. 
‘‘(B) Out-of-pocket health care costs, in-
cluding insurance premiums. 
‘‘(C) Housing expenses including mort-
gage, rent, or property taxes. 
‘‘(D) Utilities. 
‘‘(8) PUBLIC
HEALTH
EMERGENCY
DECLARA-
TION.—The term ‘public health emergency declara-
tion’ means any declaration of a public health emer-
gency by the Secretary of Health and Human Serv-
ices under section 319 of the Public Health Service 
Act (42 U.S.C. 247d). 
‘‘(9) UNEMPLOYMENT RELATED EXPENSES.— 
The term ‘unemployment related expenses’ means, in 
the case of an account beneficiary with any period 
of unemployment during the taxable year, any ex-
penses during such taxable year which, in the aggre-
gate, do not exceed $500. 
‘‘(10) ACCOUNT BENEFICIARY.—The term ‘ac-
count beneficiary’ means the individual on whose be-
half the emergency savings account was established. 
‘‘(e) TREATMENT OF ACCOUNT.— 
‘‘(1) IN GENERAL.—An emergency savings ac-
count is exempt from taxation under this subtitle 
unless such account has ceased to be an emergency 
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savings account. Notwithstanding the preceding sen-
tence, any such account is subject to the taxes im-
posed by section 511 (relating to imposition of tax 
on unrelated business income of charitable, etc. or-
ganizations). 
‘‘(2) ACCOUNT TERMINATIONS.—Rules similar 
to the rules of paragraphs (2) and (4) of section 
408(e) shall apply to emergency savings accounts, 
and any amount treated as distributed under such 
rules shall be treated as not used to pay qualified 
disaster and public health emergency expenses. 
‘‘(f) TAX TREATMENT OF DISTRIBUTIONS.— 
‘‘(1) AMOUNTS USED FOR QUALIFIED DISASTER 
AND PUBLIC HEALTH EMERGENCY EXPENSES.—Any 
amount paid or distributed out of an emergency sav-
ings account which is used exclusively to pay quali-
fied disaster and public health emergency expenses 
of any account beneficiary shall not be includible in 
gross income. 
‘‘(2) INCLUSION OF AMOUNTS NOT USED FOR 
QUALIFIED DISASTER AND PUBLIC HEALTH EMER-
GENCY EXPENSES.—Any amount paid or distributed 
out of an emergency savings account which is not 
used exclusively to pay the qualified disaster and 
public health emergency expenses of the account 
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‘‘(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 (5)) which is not deductible under this 
section. 
‘‘(4) ADDITIONAL TAX ON DISTRIBUTIONS NOT 
USED
FOR
QUALIFIED
DISASTER
AND
PUBLIC 
HEALTH EMERGENCY EXPENSES.— 
‘‘(A) IN GENERAL.—The tax imposed by 
this chapter on the account beneficiary for any 
taxable year in which there is a payment or dis-
tribution from an emergency savings account of 
such beneficiary which is includible in gross in-
come under paragraph (2) shall be increased by 
20 percent of the amount which is so includible. 
‘‘(B) EXCEPTION
FOR
DISABILITY
OR 
DEATH.—Subparagraph (A) shall not apply if 
the payment or distribution is made after the 
account beneficiary becomes disabled within the 
meaning of section 72(m)(7) or dies. 
‘‘(5) ROLLOVER CONTRIBUTION.—An amount is 
described in this paragraph as a rollover contribu-
tion if it meets the requirements of subparagraphs 
(A) and (B). 
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‘‘(A) IN
GENERAL.—Paragraph (2) shall 
not apply to any amount paid or distributed 
from an emergency savings account to the ac-
count beneficiary to the extent the amount re-
ceived is paid into an emergency savings ac-
count for the benefit of such beneficiary not 
later than the 60th day after the day on which 
the beneficiary receives the payment or distribu-
tion. 
‘‘(B) LIMITATION.—This paragraph shall 
not apply to any amount described in subpara-
graph (A) received by an individual from an 
emergency savings account if, at any time dur-
ing the 1-year period ending on the day of such 
receipt, such individual received any other 
amount described in subparagraph (A) from an 
emergency savings account which was not in-
cludible in the individual’s gross income because 
of the application of this paragraph. 
‘‘(g) COST-OF-LIVING ADJUSTMENT.— 
‘‘(1) IN GENERAL.—In the case of any taxable 
year beginning in a calendar year after 2020, each 
$5,000 amount in subsection (b) and the $3,000 
amount in subsection (d)(4) shall be increased by an 
amount equal to— 
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‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar 
year in which such taxable year begins deter-
mined by substituting ‘calendar year 2019’ for 
‘calendar year 2016’ in subparagraph (A)(ii) 
thereof. 
‘‘(2) ROUNDING.—If any increase under para-
graph (1) is not a multiple of $50, such increase 
shall be rounded to the nearest multiple of $50. 
‘‘(h) SPECIAL RULES.— 
‘‘(1) DENIAL
OF
DEDUCTION
TO
DEPEND-
ENTS.—No deduction shall be allowed under this 
section to any individual with respect to whom a de-
duction under section 151 is allowable to another 
taxpayer for a taxable year beginning in the cal-
endar year in which such individual’s taxable year 
begins. 
‘‘(2) TAXABLE YEAR MUST BE FULL TAXABLE 
YEAR.—Except in the case of a taxable year closed 
by reason of the death of the taxpayer, no deduction 
shall be allowed under this section in the case of a 
taxable year covering a period of less than 12 
months. 
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‘‘(3) CERTAIN RULES TO APPLY.—Rules similar 
to the following rules shall apply for purposes of this 
section: 
‘‘(A) Section 219(d)(2) (relating to no de-
duction for rollovers). 
‘‘(B) Section 219(f)(3) (relating to time 
when contributions deemed made). 
‘‘(C) Section 219(f)(5) (relating to em-
ployer payments). 
‘‘(D) Section 408(g) (relating to commu-
nity property laws). 
‘‘(E) Section 408(h) (relating to custodial 
accounts). 
‘‘(F) Section 223(f)(7) (relating to transfer 
of account incident to divorce). 
‘‘(G) Section 223(f)(8) (relating to treat-
ment after death of account beneficiary). 
‘‘(4) COORDINATION WITH CASUALTY LOSS DE-
DUCTION.—No deduction shall be allowed under sec-
tion 165 for a loss for which a disaster recovery ex-
pense payment is made from an emergency savings 
account. 
‘‘(i) REPORTS.—The Secretary may require the trust-
ee of an emergency savings account to make such reports 
regarding such account to the Secretary and to the ac-
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count beneficiary with respect to contributions, distribu-
tions, the return of excess contributions, and such other 
matters as the Secretary determines appropriate.’’. 
(b) DEDUCTION ALLOWED WHETHER OR NOT INDI-
VIDUAL ITEMIZES OTHER DEDUCTIONS.—Section 62(a) 
of such Code is amended by inserting after paragraph (21) 
the following new paragraph: 
‘‘(22) EMERGENCY
SAVINGS
ACCOUNTS.—The 
deduction allowed by section 224.’’. 
(c) TAX ON EXCESS CONTRIBUTIONS.—Section 4973 
of such Code (relating to tax on excess contributions to 
certain tax-favored accounts and annuities) is amended— 
(1) by striking ‘‘or’’ at the end of subsection 
(a)(5), by inserting ‘‘or’’ at the end of subsection 
(a)(6), and by inserting after subsection (a)(6) the 
following new paragraph: 
‘‘(7) an emergency savings account (within the 
meaning of section 224(d)),’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(i) EXCESS CONTRIBUTIONS TO EMERGENCY SAV-
INGS ACCOUNTS.—For purposes of this section, in the 
case of emergency savings accounts (within the meaning 
of section 224(d)), the term ‘excess contributions’ means 
the sum of— 
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‘‘(1) the aggregate amount contributed for the 
taxable year to the accounts (other than a rollover 
contribution described in section 224(f)(5)) which is 
not allowable as a deduction under section 224 for 
such year, 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 
which were included in gross income under sec-
tion 224(f)(2), and 
‘‘(B) the excess (if any) of— 
‘‘(i) the maximum amount allowable 
as a deduction under section 224(b) for 
the taxable year, over 
‘‘(ii) the amount contributed to the 
accounts for the taxable year. 
For purposes of this subsection, any contribu-
tion which is distributed out of the emergency 
savings account in a distribution to which sec-
tion 224(f)(3) applies shall be treated as an 
amount not contributed.’’. 
(d) FAILURE TO PROVIDE REPORTS ON EMERGENCY 
SAVINGS ACCOUNTS.—Section 6693(a)(2) of such Code is 
amended by redesignating subparagraphs (D), (E), and 
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