I
105TH CONGRESS
1ST SESSION
H. R. 17
To amend the Internal Revenue Code of 1986 to encourage retirement savings
by allowing more individuals to make contributions to individual retire-
ment plans, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 7, 1997
Mr. POMEROY 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
retirement savings by allowing more individuals to make
contributions to individual retirement plans, 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 ‘‘IRA Savings Oppor-
tunity Act of 1997’’.
SEC. 2. MODIFICATIONS TO INDIVIDUAL RETIREMENT
PLANS.
(a) INCREASE IN INCOME LIMITATIONS.—Subpara-
graph (B) of section 219(g)(3) of the Internal Revenue
Code of 1986 is amended—
(1) by striking ‘‘$40,000’’ in clause (i) and in-
serting ‘‘$80,000, and
(2) by striking ‘‘$25,000’’ in clause (ii) and in-
serting ‘‘$50,000’’.
(b) EXTENSION OF PHASEOUT RANGE.—Clause (ii)
of section 219(g)(2)(A) of such Code is amended by strik-
ing ‘‘$10,000’’ and inserting ‘‘$20,000’’.
(c) ADDITIONAL $2,000 OF NONDEDUCTIBLE CON-
TRIBUTIONS
PERMITTED
FOR
CERTAIN
INDIVIDUALS
WHO ARE NOT ACTIVE PARTICIPANTS
IN EMPLOYER
PLANS.—
(1) IN GENERAL.—Subparagraph (B) of section
408(o)(2) of such Code (relating to nondeductible
limit) is amended by adding at the end the following
new clause:
‘‘(iii) ADDITIONAL
$2,000
OF
NON-
DEDUCTIBLE CONTRIBUTIONS PERMITTED
FOR CERTAIN INDIVIDUALS WHO ARE NOT
ACTIVE
PARTICIPANTS
IN
EMPLOYER
PLANS.—
‘‘(I) IN GENERAL.—In the case
of an individual who is not an active
participant (as defined in section
219(g)) for any part of any plan year
ending with or within the taxable
year, the amount determined under
clause (i)(I) shall be increased by
$2,000.
‘‘(II) REDUCTION BASED ON AD-
JUSTED GROSS INCOME.—The $2,000
amount in subclause (I) shall be re-
duced (but not below zero) by an
amount which bears the same ratio to
$2,000 as the excess of the taxpayer’s
adjusted gross income (as determined
under section 219(g)(3)) for the tax-
able year over the applicable dollar
amount (as defined in such section)
bears to $20,000. The rules of sub-
paragraphs (B) and (C) of paragraph
(2), and paragraph (4), of section
219(g) shall apply for purposes of the
preceding sentence.’’
(2) CONFORMING AMENDMENTS.—
(A) Subsections (a)(1), (b), and (j) of sec-
tion 408 of such Code are each amended by
striking ‘‘$2,000’’ and inserting ‘‘$4,000’’.
(B) The last sentence of section 408(d)(5)
of such Code is amended by striking before the
period ‘‘and by treating the limitation under
section 219(b)(1)(A) as being $4,000’’.
(C) The last sentence of section 4973(b) of
such Code (relating to excess contributions) is
amended to read as follows: ‘‘For purposes of
paragraphs (1)(B) and (2)(C), the amount al-
lowable as a deduction under section 219 shall
be computed without regard to section 219(g)
and by treating the limitation under section
219(b)(1)(A) as being $4,000.’’
(d) ELIGIBILITY FOR IRA DEDUCTION DETERMINED
WITHOUT REGARD TO SPOUSE’S PARTICIPATION IN PEN-
SION PLAN.—Paragraph (1) of section 219(g) of such
Code (relating to limitation on deduction for active partici-
pants in certain pension plans) is amended by striking ‘‘or
the individual’s spouse’’.
(e) ALTERNATIVE CREDIT FOR LOWER INCOME TAX-
PAYERS.—
(1) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 of such Code (relating to
nonrefundable personal credits) is amended by in-
serting after section 23 the following new section:
‘‘SEC. 24. RETIREMENT SAVINGS.
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in-
dividual, there shall be allowed as a credit against the tax
imposed by this chapter for the taxable year an amount
equal to 20 percent of the amount which would (but for
subsection (c)) be allowed as a deduction under section
219 for such taxable year.
‘‘(b) LIMITATION BASED ON ADJUSTED GROSS IN-
COME.—
‘‘(1) IN GENERAL.—The amount of the credit
which would (but for this subsection) be allowed
under subsection (a) for the taxable year shall be re-
duced (but not below zero) by an amount which
bears the same ratio to such amount of credit as—
‘‘(A) the excess of—
‘‘(i) the taxpayer’s adjusted gross in-
come for such taxable year, over
‘‘(ii) the applicable dollar amount,
bears to
‘‘(B) $10,000.
‘‘(2) 
ROUNDING.—Any 
amount 
determined
under this subsection which is not a multiple of $10
shall be rounded to the next lowest $10.
‘‘(3) APPLICABLE DOLLAR AMOUNT.—For pur-
poses of this subsection, the term ‘applicable dollar
amount’ means—
‘‘(A) in the case of a taxpayer filing a joint
return, $40,000,
‘‘(B) in the case of any other taxpayer
(other than a married individual filing a sepa-
rate return), $25,000, and
‘‘(C) in the case of a married individual fil-
ing a separate return, zero.
The rule of section 219(g)(4) shall apply for pur-
poses of this paragraph.
‘‘(c) COORDINATION WITH DEDUCTION.—No deduc-
tion shall be allowed under section 219 for amount paid
by or on behalf of an individual for any taxable year if
any such amount (with respect to such individual) is taken
into account in determining the credit under this section
for such year.’’
(2) CLERICAL AMENDMENT.—The table of sec-
tions for such subpart A is amended by inserting
after the item relating to section 23 the following
new item:
‘‘Sec. 24. Retirement savings.’’
(f) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
the date of the enactment of this Act.