distribution were a social security benefit (as
defined in section 86).
‘‘(B) ALLOCATION OF INVESTMENT IN THE
CONTRACT.—For purposes of section 72, the
portion of the account which the Executive Di-
rector (as defined in section 251 of the Social
Security Act) determines is necessary to fund
the benefit distributions referred to in subpara-
graph (A) for the taxable year and all succeed-
ing taxable years shall be treated as a separate
contract with respect to which no premium or
other consideration was paid.
‘‘(4) CROSS REFERENCE.—
‘‘For excise tax on certain distributions, see sec-
tion 72(t).
‘‘(e) SPECIAL RULES.—
‘‘(1) TIME
WHEN
CONTRIBUTIONS
DEEMED
MADE.—For purposes of this section, a taxpayer
shall be deemed to have made a contribution to a
personal social security investment account on the
last day of the preceding taxable year if the con-
tribution is made on account of such taxable year
and is made not later than the time prescribed by
law for filing the return for such taxable year (not
including extensions thereof).
‘‘(2) BENEFICIARY
MUST
BE
UNDER
AGE
701⁄2.—No deduction shall be allowed under this sec-
tion with respect to any contribution to personal so-
cial security investment account if the account hold-
er has attained age 701⁄2 before the close of such
holder’s taxable year for which the contribution was
made.’’
(b) DEDUCTION ALLOWED WHETHER OR NOT TAX-
PAYER ITEMIZES OTHER DEDUCTIONS.—Subsection (a)
of section 62 of such Code is amended by inserting after
paragraph (16) the following new paragraph:
‘‘(17) PERSONAL
SOCIAL
SECURITY
INVEST-
MENT
ACCOUNT
CONTRIBUTIONS.—The deduction
allowed by section 221.’’.
(c) CONFORMING AMENDMENTS.—
(1) PENALTY FOR FAILURE TO MEET MINIMUM
DISTRIBUTION
REQUIREMENT.—Subsection (c) of
section 4974 of such Code is amended by striking
‘‘or’’ at the end of paragraph (4), by striking the pe-
riod at the end of paragraph (5) and inserting ‘‘,
or’’, and by inserting after paragraph (5) the follow-
ing new paragraph:
‘‘(6) any personal social security investment ac-
count (as defined in section 221(c)).’’.
(2) TAX
ON
EXCESS
DISTRIBUTIONS
FROM
QUALIFIED RETIREMENT PLANS TO APPLY.—
(A) 
Subparagraph 
(A) 
of 
section
4980A(d)(3) of such Code is amended by strik-
ing ‘‘and individual retirement plans’’ and in-
serting ‘‘, individual retirement plans, and per-
sonal social security investment accounts (as
defined in section 221(c))’’.
(B) Paragraph (1) of section 4980A(e) of
such Code is amended by striking ‘‘and’’ at the
end of subparagraph (A), by striking the period
at the end of subparagraph (B) and inserting ‘‘,
and’’, and by adding at the end the following
new subparagraph:
‘‘(C) any personal social security invest-
ment account (as defined in section 221(c)).’’.
(3) TREATMENT LIKE INDIVIDUAL RETIREMENT
PLAN UNDER EXCISE TAX ON CERTAIN PREMATURE
DISTRIBUTIONS.—Subparagraph 
(A) 
of 
section
72(t)(3) of such Code is amended—
(A) by inserting ‘‘or from a personal social
security investment account (as defined in sec-
tion 221(c))’’ before the period at the end, and
(B) by inserting ‘‘OR FROM PERSONAL SO-
CIAL SECURITY INVESTMENT ACCOUNTS’’ after
‘‘PLANS’’ in the subparagraph heading.
(d) CLERICAL AMENDMENT.—The table of sections
for part VII of subchapter B of chapter 1 of such Code
is amended by striking the last item and inserting the fol-
lowing new items:
‘‘Sec. 221. Personal social security investment accounts.
‘‘Sec. 222. Cross reference.’’.
(e) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1998.
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