I 
111TH CONGRESS 
1ST SESSION 
H. R. 153 
To amend the Internal Revenue Code of 1986 to provide for tax-favored 
unemployment savings accounts, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 6, 2009 
Mr. MCHUGH 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 provide 
for tax-favored unemployment savings 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 ‘‘Worker Savings Ac-
count Act of 2009’’. 
SEC. 2. WORKER SAVINGS ACCOUNTS. 
(a) IN GENERAL.—Subpart A of part I of subchapter 
D of chapter 1 of the Internal Revenue Code of 1986 (re-
lating to pension, profit-sharing, stock bonus plans, etc.) 
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is amended by inserting after section 408A the following 
new section: 
‘‘SEC. 408B. WORKER SAVINGS ACCOUNTS. 
‘‘(a) IN GENERAL.— 
‘‘(1) TREATED IN SAME MANNER AS IRA.—Ex-
cept as provided in this section, a worker savings ac-
count shall be treated for purposes of this title in 
the same manner as an individual retirement plan. 
‘‘(2) SEPARATE
APPLICATION
OF
RULES.— 
Rules made applicable by reason of this paragraph 
shall be applied separately with respect to worker 
savings accounts and individual retirement plans of 
the individual. 
‘‘(b) WORKER SAVINGS ACCOUNT.—For purposes of 
this title, the term ‘worker savings account’ means an indi-
vidual retirement plan (as defined in section 7701(a)(37)) 
which is designated (in such manner as the Secretary may 
prescribe) at the time of establishment of the plan as a 
worker savings account. 
‘‘(c) CONTRIBUTIONS.— 
‘‘(1) EMPLOYER
CONTRIBUTIONS.—For pur-
poses of this section, the amount in effect under sec-
tion 219(b)(5)(A), with respect to an individual for 
a taxable year, shall be increased by the lesser of— 
‘‘(A) $5,000, or 
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‘‘(B) the amounts contributed for the tax-
able year to the individual’s worker savings ac-
count by all employers of the individual. 
‘‘(2) WORKER SAVINGS ACCOUNT REFUND PAY-
MENT.—Section 408(a)(1) shall not apply with re-
spect to a payment under section 6431. 
‘‘(3) CONTRIBUTIONS AFTER RECEIPT OF SO-
CIAL SECURITY BENEFITS.—Except in the case of a 
rollover contribution described in subsection (e)(1), 
no contributions may be made to an individual’s 
worker savings account during calendar years begin-
ning after the first month such individual begins re-
ceiving amounts by reason of entitlement to a 
monthly benefit under title II of the Social Security 
Act. 
‘‘(d) TREATMENT OF DISTRIBUTIONS.— 
‘‘(1) IN
GENERAL.—Any amounts distributed 
from a worker savings account shall be included in 
gross income, unless such amount is a qualified un-
employment distribution. 
‘‘(2) QUALIFIED
UNEMPLOYMENT
DISTRIBU-
TION.—For purposes of this section— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
unemployment distribution’ means any amount 
distributed— 
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‘‘(i) during a period of unemployment 
of the account beneficiary which is by rea-
son of termination of employment (other 
than for gross misconduct of the account 
beneficiary), or 
‘‘(ii) not earlier than the first month 
the account beneficiary receives an amount 
by reason of entitlement to a monthly ben-
efit under title II of the Social Security 
Act. 
‘‘(3) DISABILITY
DISTRIBUTION.—Paragraph 
(1) shall not apply to any amount paid or distrib-
uted on or after disability (within the meaning of 
section 72(m)(7)) of the account beneficiary. 
‘‘(4) OTHER DISTRIBUTION RULES.— 
‘‘(A) EXCESS CONTRIBUTIONS; TRANSFER 
OF
ACCOUNT
INCIDENT
TO
DIVORCE.—Rules 
similar to the rules of paragraphs (4) through 
(6) of section 408(d) shall apply for purposes of 
this section. 
‘‘(B) NO
MINIMUM
DISTRIBUTION
RE-
QUIREMENT
PRIOR
TO
DEATH.—Notwith-
standing subsections (a)(6) and (b)(6), section 
401(a)(9) and the incidental death benefit re-
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quirement of section 401(a) shall not apply for 
purposes of this subsection. 
‘‘(C) TREATMENT AFTER DEATH OF AC-
COUNT
BENEFICIARY.—Rules similar to the 
rules of paragraph (8) of section 223(f) shall 
apply for purposes of this section. 
‘‘(e) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section— 
‘‘(1) ROLLOVER CONTRIBUTIONS.—An amount 
is described in this paragraph as a rollover contribu-
tion if it meets the requirements of clauses (i) and 
(ii). 
‘‘(A) IN
GENERAL.—Paragraph (1) shall 
not apply to any amount paid or distributed 
from a worker savings account to the account 
holder to the extent— 
‘‘(i) the entire amount received is paid 
into a worker savings account for the ben-
efit of such holder not later than the 60th 
day after the day on which the holder re-
ceives the payment or distribution, or 
‘‘(ii) the entire amount received is 
paid into an eligible retirement plan (as 
defined in section 408(d)(3)) for the ben-
efit of such holder not later than the 60th 
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day after the day on which the holder re-
ceives the payment or distribution, except 
that the maximum amount which may be 
paid into such plan may not exceed the 
portion of the amount received which is in-
cludible in gross income (determined with-
out regard to this paragraph). 
‘‘(B) LIMITATION.—This paragraph shall 
not apply to any amount described in para-
graph (A) received by an individual from a 
worker savings account if, at any time during 
the 1-year period ending on the day of such re-
ceipt, such individual received any other amount 
described in subparagraph (A) from a worker 
savings account which was not includible in the 
individual’s gross income because of the appli-
cation of this paragraph. 
‘‘(2) ACCOUNT
BENEFICIARY.—The term ‘ac-
count beneficiary’ means the individual on whose be-
half the worker savings account is established. 
‘‘(f) INFLATION ADJUSTMENT.—In the case of any 
taxable year beginning in a calendar year after 2010, the 
dollar amount contained in subsection (c)(1) shall be in-
creased by an amount equal to— 
‘‘(1) such dollar amount, multiplied by 
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‘‘(2) the cost-of-living adjustment determined 
under section 1(f)(3) for the calendar year in which 
the taxable year begins, determined by substituting 
‘calendar year 2009’ for ‘calendar year 1992’ in sub-
paragraph (B) thereof. 
Any increase determined under the preceding sentence 
shall be rounded to the nearest multiple of $100.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for subpart A of part I of subchapter D of chapter 1 of 
such Code is amended by inserting after the item relating 
to section 408A the following new item: 
‘‘Sec. 408B. Worker savings accounts.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2009. 
SEC. 3. PORTION OF SAVER’S CREDIT REFUNDABLE. 
(a) IN GENERAL.—Section 25B of such Code (relat-
ing to elective deferrals and IRA contributions by certain 
individuals) is amended by adding at the end the following 
new subsection: 
‘‘(h) PORTION OF CREDIT REFUNDABLE.— 
‘‘(1) IN GENERAL.—The aggregate credits al-
lowed to a taxpayer under subpart C shall be in-
creased by the lesser of— 
‘‘(A) $1,000, or 
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‘‘(B) the amount of the credit attributable 
to qualified retirement savings contributions 
made by the individual to worker savings ac-
counts which would be allowed under this sec-
tion (without regard to this subsection and the 
limitation under section 26(a)(2) or subsection 
(g), as the case may be). 
The amount of the credit allowed under this subsection 
shall not be treated as a credit allowed under this subpart 
and shall reduce the amount of credit otherwise allowable 
under subsection (a) without regard to section 26(a)(2) 
or subsection (g), as the case may be. 
‘‘(2) LIMITATION.—The amount of the credit 
allowed under this section for any taxable year shall 
not exceed an amount equal to the excess (if any) 
of— 
‘‘(A) $5,000, over 
‘‘(B) the aggregate amount of credits al-
lowed under this subsection for all prior taxable 
years. 
‘‘(3) INFLATION ADJUSTMENT.—In the case of 
any taxable year beginning in a calendar year after 
2010, each of the dollar amounts contained in para-
graphs (1) and (2) 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 the taxable year begins, deter-
mined by substituting ‘calendar year 2009’ for 
‘calendar year 1992’ in subparagraph (B) 
thereof. 
Any increase determined under the preceding sen-
tence shall be rounded to the nearest multiple of 
$100.’’. 
(b) REFUND PAYABLE TO WORKER SAVINGS AC-
COUNT.— 
(1) IN GENERAL.—Subchapter B of chapter 65 
of the Internal Revenue Code of 1986 is amended by 
adding at the end the following new section: 
‘‘SEC. 6431. WORKER SAVINGS ACCOUNT REFUND PAY-
MENT. 
‘‘(a) IN GENERAL.—In the case of a credit allowed 
to an individual which is attributable to an increase under 
section 25B(h), the Secretary shall pay the amount of 
such credit into the designated retirement account of the 
individual. 
‘‘(b) DESIGNATED
RETIREMENT
ACCOUNT.—The 
term ‘designated retirement account’ means any worker 
savings account of the individual— 
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‘‘(1) which is designated (in such form and 
manner as the Secretary may provide) on the indi-
vidual’s return of tax for the taxable year to receive 
the payment under subsection (a), and 
‘‘(2) which, under the terms of the account, ac-
cepts the payment described in paragraph (1).’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions for subchapter B of chapter 65 of such Code 
is amended by adding at the end the following new 
item: 
‘‘Sec. 6431. Worker savings account refund payment.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2009. 
SEC. 4. NO INFERENCE AS TO STATE AND FEDERAL UNEM-
PLOYMENT COMPENSATION. 
No provision of this Act (including the amendments 
made thereby) shall be construed to— 
(1) diminish an employer’s obligation to pay 
any applicable State and Federal unemployment 
taxes (or any other amount required under State or 
Federal law to be paid into an unemployment fund), 
or 
(2) reduce the amount of unemployment com-
pensation (as defined in section 85(b) of the Internal 
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Revenue Code of 1986) to which an individual is en-
titled. 
Æ 
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