I
104TH CONGRESS
1ST SESSION
H. R. 682
To amend the Internal Revenue Code of 1986 to encourage savings and
investment through individual retirement accounts, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 25, 1995
Mr. THOMAS of California (for himself and Mr. NEAL) 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 and investment through individual retirement ac-
counts, 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; AMENDMENT OF 1986 CODE.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Savings and Investment Incentive Act of 1995’’.
(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this Act an amend-
ment or repeal is expressed in terms of an amendment
to, or repeal of, a section or other provision, the reference
shall be considered to be made to a section or other provi-
sion of the Internal Revenue Code of 1986.
TITLE I—RETIREMENT SAVINGS
INCENTIVES
Subtitle A—Restoration of IRA
Deduction
SEC. 101. RESTORATION OF IRA DEDUCTION.
(a) PHASE-UP OF INCOME LIMITS.—
(1) IN GENERAL.—Subparagraph (B) of section
219(g)(3) (relating to applicable dollar amount) is
amended to read as follows:
‘‘(B) APPLICABLE DOLLAR AMOUNT.—The
term ‘applicable dollar amount’ means the fol-
lowing:
‘‘(i) In the case of a taxpayer filing a
joint return:
The applicable
‘‘For taxable years beginning in:
dollar amount is:
1995 .........................................................................................
$65,000
1996 .........................................................................................
$90,000
1997 .........................................................................................
$115,000
1998 .........................................................................................
$140,000.
‘‘(ii) In the case of any other taxpayer
(other than a married individual filing a
separate return):
The applicable
‘‘For taxable years beginning in:
dollar amount is:
1995 .........................................................................................
$50,000
1996 .........................................................................................
$75,000
1997 .........................................................................................
$100,000
1998 .........................................................................................
$125,000.
‘‘(iii) In the case of a married individ-
ual filing a separate return, zero.’’.
(2) UNLINKING OF SPOUSAL RULE.—Paragraph
(1) of section 219(g) (relating to limitation on de-
duction for active participants in certain pension
plans) is amended by striking ‘‘or the individual’s
spouse’’.
(b) TERMINATION OF INCOME LIMITS.—
(1) IN GENERAL.—Section 219 (relating to de-
duction for retirement savings), as amended by sec-
tion 102, is amended by striking subsection (g) and
by redesignating subsections (h) and (i) as sub-
section (g) and (h), respectively.
(2) TECHNICAL
AND
CONFORMING
AMEND-
MENTS.—
(A) Subsection (f) of section 219 is amend-
ed by striking paragraph (7).
(B) Paragraph (5) of section 408(d) is
amended by striking the last sentence.
(C) Section 408(o) is amended by adding
at the end the following new paragraph:
‘‘(5) TERMINATION.—This subsection shall not
apply to any designated nondeductible contribution
for any taxable year beginning after December 31,
1998.’’.
(D) Section 408A(c)(2)(A), as added by
section 111, is amended by striking ‘‘(computed
without regard to subsections (b)(4) and (g) of
such section)’’ and inserting ‘‘(computed with-
out regard to section 219(b)(4))’’.
(E) Subsection (b) of section 4973 is
amended by striking the last sentence.
(c) EFFECTIVE DATES.—
(1) PHASE-UP.—The amendments made by
subsection (a) shall apply to taxable years beginning
after December 31, 1994.
(2) TERMINATION.—The amendments made by
subsection (b) shall apply to taxable years beginning
after December 31, 1998.
SEC. 102. INFLATION ADJUSTMENT FOR DEDUCTIBLE
AMOUNT.
(a) IN GENERAL.—Section 219, as amended by sec-
tion 101(a), is amended by redesignating subsection (h)
as subsection (i) and by inserting after subsection (g) the
following new subsection:
‘‘(h) COST-OF-LIVING ADJUSTMENTS.—
‘‘(1) DEDUCTION AMOUNT.—
‘‘(A) IN
GENERAL.—In the case of any
taxable year beginning in a calendar year after
1995, the $2,000 amount under subsection
(b)(1)(A) shall be increased by an amount equal
to the product of $2,000 and the cost-of-living
adjustment for the calendar year.
‘‘(B) ROUNDING TO NEXT LOWEST $500.—
If the amount to which $2,000 would be in-
creased under subparagraph (A) is not a mul-
tiple of $500, such amount shall be rounded to
the next lowest multiple of $500.
‘‘(2) RELATED AMOUNTS.—Each of the dollar
amounts contained in subsection (c)(2) shall be in-
creased at the same time, and by the same amount,
as the increase under paragraph (1).
‘‘(3) COST-OF-LIVING ADJUSTMENT.—For pur-
poses of this subsection:
‘‘(A) IN GENERAL.—The cost-of-living ad-
justment for any calendar year is the percent-
age (if any) by which—
‘‘(i) the CPI for such calendar year,
exceeds
‘‘(ii) the CPI for 1994.
‘‘(B) CPI FOR ANY CALENDAR YEAR.—The
CPI for any calendar year shall be determined
in the same manner as under section 1(f)(4).’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 408(a)(1) is amended by striking
‘‘in excess of $2,000 on behalf of any individual’’
and inserting ‘‘on behalf of any individual in excess
of the amount in effect for such taxable year under
section 219(b)(1)(A)’’.
(2) Section 408(b)(2)(B) is amended by strik-
ing ‘‘$2,000’’ and inserting ‘‘the dollar amount in
effect under section 219(b)(1)(A)’’.
(3) Section 408(j) is amended by striking
‘‘$2,000’’.
SEC. 103. HOMEMAKERS ELIGIBLE FOR FULL IRA DEDUC-
TION.
(a) SPOUSAL IRA COMPUTED ON BASIS OF COM-
PENSATION OF BOTH SPOUSES.—Subsection (c) of section
219 (relating to special rules for certain married individ-
uals) 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—