Encouraging Americans to Save Act
Bill: H.R.2913 | Sponsor: Rep. Chu, Judy (D-CA)
Policy area: Taxation

Summary:
Encouraging Americans to Save Act
This bill sets forth provisions to provide matching payments for retirement savings and Individual Retirement Account (IRA) contributions for individuals who have attained age 18, excluding dependents and full-time students. Specifically, it allows an enhanced 50% tax credit, up to $3,000, for deductible retirement savings contributions and for IRA contributions.
The bill also directs the Department of the Treasury to establish a permanent program to be known as the MyRA Program to allow individuals or employers to establish a Roth IRA. Treasury must also take steps to increase public awareness of the benefits of this bill and the MyRA Program in particular.

To amend the Internal Revenue Code of 1986 to provide matching payments 
      for retirement savings contributions by certain individuals.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Encouraging Americans to Save Act''.

SEC. 2. MATCHING PAYMENTS FOR ELECTIVE DEFERRAL AND IRA CONTRIBUTIONS 
              BY CERTAIN INDIVIDUALS.

    (a) 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. 6433. SAVER'S MATCH.

    ``(a) In General.--
            ``(1) Allowance of credit.--Any eligible individual who 
        makes qualified retirement savings contributions for the 
        taxable year shall be allowed a credit for such taxable year in 
        an amount equal to the applicable percentage of so much of the 
        qualified retirement savings contributions made by such 
        eligible individual for the taxable year as does not exceed 
        $3,000.
            ``(2) Payment of credit.--The credit under this section 
        shall be paid by the Secretary as a contribution (as soon as 
        practicable after the eligible individual has filed a tax 
        return for the taxable year) to the applicable retirement 
        savings vehicle of an eligible individual.
    ``(b) Applicable Percentage.--For purposes of this section--
            ``(1) In general.--Except as provided in paragraph (2), the 
        applicable percentage is 50 percent.
            ``(2) Phaseout.--The percentage under paragraph (1) shall 
        be reduced (but not below zero) by the number of percentage 
        points which bears the same ratio to 50 percentage points as--
                    ``(A) the excess of--
                            ``(i) the taxpayer's modified adjusted 
                        gross income for such taxable year, over
                            ``(ii) the applicable dollar amount, bears 
                        to
                    ``(B) the phaseout range.
        If any reduction determined under this paragraph is not a whole 
        percentage point, such reduction shall be rounded to the next 
        lowest whole percentage point.
            ``(3) Applicable dollar amount; phaseout range.--
                    ``(A) Joint returns.--Except as provided in 
                subparagraph (B)--
                            ``(i) the applicable dollar amount is 
                        $80,000, and
                            ``(ii) the phaseout range is $20,000.
                    ``(B) Other returns.--In the case of--
                            ``(i) a head of a household (as defined in 
                        section 2(b)), the applicable dollar amount and 
                        the phaseout range shall be \3/4\ of the 
                        amounts applicable under subparagraph (A) (as 
                        adjusted under subsection (g)), and
                            ``(ii) any taxpayer who is not filing a 
                        joint return and who is not a head of a 
                        household (as so defined), the applicable 
                        dollar amount and the phaseout range shall be 
                        \1/2\ of the amounts applicable under 
                        subparagraph (A) (as so adjusted).
            ``(4) Limitation on phaseout.--The reduction provided under 
        paragraph (2) shall not apply to the extent that such reduction 
        would result in the amount of the credit allowed under 
        subsection (a) to be less than $100.
    ``(c) Eligible Individual.--For purposes of this section--
            ``(1) In general.--The term `eligible individual' means any 
        individual if such individual has attained the age of 18 as of 
        the close of the taxable year.
            ``(2) Dependents and full-time students not eligible.--The 
        term `eligible individual' shall not include--
                    ``(A) any individual with respect to whom a 
                deduction under section 151 is allowed to another 
                taxpayer for a taxable year beginning in the calendar 
                year in which such individual's taxable year begins, 
                and
                    ``(B) any individual who is a student (as defined 
                in section 152(f)(2)).
    ``(d) Qualified Retirement Savings Contributions.--For purposes of 
this section--
            ``(1) In general.--The term `qualified retirement savings 
        contributions' means, with respect to any taxable year, the sum 
        of--
                    ``(A) the amount of the qualified retirement 
                contributions (as defined in section 219(e)) made by 
                the eligible individual,
                    ``(B) the amount of--
                            ``(i) any elective deferrals (as defined in 
                        section 402(g)(3)) of such individual, and
                            ``(ii) any elective deferral of 
                        compensation by such individual under an 
                        eligible deferred compensation plan (as defined 
                        in section 457(b)) of an eligible employer 
                        described in section 457(e)(1)(A), and
                    ``(C) the amount of voluntary employee 
                contributions by such individual to any qualified 
                retirement plan (as defined in section 4974(c)).
        Such term shall not include any amount attributable to a 
        payment under subsection (a).
            ``(2) Reduction for certain distributions.--
                    ``(A) In general.--The qualified retirement savings 
                contributions determined under paragraph (1) for a 
                taxable year shall be reduced (but not below zero) by 
                the aggregate distributions received by the individual 
                during the testing period from any entity of a type to 
                which contributions under paragraph (1) may be made.
                    ``(B) Testing period.--For purposes of subparagraph 
                (A), the testing period, with respect to a taxable 
                year, is the period which includes--
                            ``(i) such taxable year,
                            ``(ii) the 2 preceding taxable years, and
                            ``(iii) the period after such taxable year 
                        and before the due date (including extensions) 
                        for filing the return of tax for such taxable 
                        year.
                    ``(C) Excepted distributions.--There shall not be 
                taken into account under subparagraph (A)--
                            ``(i) any distribution referred to in 
                        section 72(p), 401(k)(8), 401(m)(6), 402(g)(2), 
                        404(k), or 408(d)(4),
                            ``(ii) any distribution to which section 
                        408(d)(3) or 408A(d)(3) applies, and
                            ``(iii) any portion of a distribution if 
                        such portion is transferred or paid in a 
                        rollover contribution (as defined in section 
                        402(c), 403(a)(4), 403(b)(8), 408A(e), or 
                        457(e)(16)) to an account or plan to which 
                        qualified retirement contributions can be made.
                    ``(D) Treatment of distributions received by spouse 
                of individual.--For purposes of determining 
                distributions received by an individual under 
                subparagraph (A) for any taxable year, any distribution 
                received by the spouse of such individual shall be 
                treated as received by such individual if such 
                individual and spouse file a joint return for such 
                taxable year and for the taxable year during which the 
                spouse receives the distribution.
    ``(e) Applicable Retirement Savings Vehicle.--
            ``(1) In general.--The term `applicable retirement savings 
        vehicle' means--
                    ``(A) an account or plan elected by the eligible 
                individual under paragraph (2), or
                    ``(B) if no such election is made or the Secretary 
                is not able to make a contribution into the account or 
                plan selected by the eligible individual, a MyRA 
                established for the benefit of the eligible individual.
        For purposes of subparagraph (B), if no MyRA has previously 
        been established for the benefit of the individual, the 
        Secretary shall establish such an account for such individual 
        for purposes of contributions under this section.
            ``(2) Other retirement vehicles.--An eligible individual 
        may elect to have the amount determined under subsection (a) 
        contributed to an account or plan which--
                    ``(A) is a Roth IRA or a designated Roth account 
                (within the meaning of section 402A) of an applicable 
                retirement plan (as defined in section 402A(e)(1)),
                    ``(B) is for the benefit of the eligible 
                individual,
                    ``(C) accepts contributions made under this 
                section, and
                    ``(D) is designated by such individual (in such 
                form and manner as the Secretary may provide) on the 
                return of tax for the taxable year.
            ``(3) MyRA.--For purposes of paragraph (1), the term `MyRA' 
        means a Roth IRA which is established--
                    ``(A) under the MyRA program established under 
                section 3 of the Encouraging Americans to Save Act, and
                    ``(B) by the individual for whose benefit the Roth 
                IRA was created or by the Secretary on behalf of such 
                individual.
    ``(f) Other Definitions and Special Rules.--
            ``(1) Modified adjusted gross income.--For purposes of this 
        section, the term `modified adjusted gross income' means 
        adjusted gross income--
                    ``(A) determined without regard to sections 911, 
                931, and 933, and
                    ``(B) determined without regard to any exclusion or 
                deduction allowed for any qualified retirement savings 
                contribution made during the taxable year.
            ``(2) Treatment of contributions.--In the case of any 
        contribution under subsection (a)(2)--
                    ``(A) except as otherwise provided in this section 
                or by the Secretary under regulations, such 
                contribution shall be treated in the same manner as a 
                contribution made by the individual on whose behalf 
                such contribution was made,
                    ``(B) such contribution shall not be treated as 
                income to the taxpayer, and
                    ``(C) such contribution shall not be taken into 
                account with respect to any applicable limitation under 
                sections 402(g)(1), 403(b), 408(a)(1), 408(b)(2)(B), 
                408A(c)(2), 414(v)(2), 415(c), or 457(b)(2).
            ``(3) Treatment of qualified plans, etc.--A plan or 
        arrangement to which a contribution is made under this section 
        shall not be treated as violating any requirement under section 
        401, 403, 408, or 457 solely by reason of accepting such 
        contribution.
            ``(4) Erroneous credits.--If any contribution is 
        erroneously paid under subsection (a)(2), the amount of such 
        erroneous payment shall be treated as an underpayment of tax.
    ``(g) Inflation Adjustments.--
            ``(1) In general.--In the case of any taxable year 
        beginning in a calendar year after 2022, each of the dollar 
        amounts in subsections (a)(2) and (b)(3)(A)(i) shall be 
        increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) 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 2021' for `calendar year 2016' in 
                subparagraph (A)(ii) thereof.
            ``(2) Rounding.--Any increase determined under paragraph 
        (1) shall be rounded to the nearest multiple of--
                    ``(A) $100 in the case of an adjustment of the 
                amount in subsection (a)(2), and
                    ``(B) $1,000 in the case of an adjustment of the 
                amount in subsection (b)(3)(A)(i).''.
    (b) Payment Authority.--Section 1324(b)(2) of title 31, United 
States Code, is amended by striking ``6431'' and inserting ``6433''.
    (c) Deficiencies.--Section 6211(b)(4) of the Internal Revenue Code 
of 1986 is amended by striking ``and 6428'' and inserting ``6428, and 
6433''.
    (d) Conforming Amendments.--
            (1) Section 25B of the Internal Revenue Code of 1986 is 
        amended to read as follows:

``SEC. 25B. SAVER'S CREDIT.

    ``For payment of credit related to qualified retirement savings 
contributions, see section 6433.''.
            (2) The table of sections for subchapter B of chapter 65 of 
        such Code is amended by adding after the item relating to 
        section 6430 the following new item:

``Sec. 6433. Saver's match.''.
            (3) The table of sections for subpart A of part IV of 
        subchapter A of chapter 1 of such Code is amended by striking 
        the item relating to section 25B and inserting the following 
        new item:

``Sec. 25B. Saver's credit.''
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2021.

SEC. 3. ESTABLISHMENT OF MYRA PROGRAM.

    (a) In General.--The Secretary of the Treasury (or the Secretary's 
delegate) shall, not later than December 31, 2021, establish a 
permanent program, to be known as the ``MyRA Program'', which meets the 
requirements of this section to establish and maintain a Roth IRA on 
behalf of individuals.
    (b) Program Specifications.--
            (1) In general.--
                    (A) Roth iras.--The MyRA Program established under 
                this section shall--
                            (i) permit an individual to establish a 
                        Roth IRA which satisfies the requirements of 
                        section 408A of the Internal Revenue Code of 
                        1986 on behalf of the individual;
                            (ii) permit an employer to establish such a 
                        Roth IRA on behalf of 1 or more employees of 
                        such employer;
                            (iii) require the assets of each Roth IRA 
                        established under the program to be held by the 
                        designated Roth IRA custodian;
                            (iv) permit contributions to be made 
                        periodically to such Roth IRAs by direct 
                        deposit or other electronic means and by 
                        methods that provide access for the unbanked;
                            (v) permit distributions and rollovers from 
                        such Roth IRAs upon request of the account 
                        owner;
                            (vi) include procedures to consolidate 
                        multiple accounts established for the same 
                        individual; and
                            (vii) ensure that such Roth IRAs are 
                        invested solely in retirement savings bonds 
                        issued by the Department of the Treasury for 
                        the purpose of the MyRA Program.
                    (B) Regulations, etc.--The Secretary of the 
                Treasury shall have authority to promulgate such 
                regulations, rules, and other guidance as are necessary 
                to implement the MyRA program, and are consistent with 
                this section, as well as coordination rules permitting 
                Roth IRAs to be established under the MyRA program in 
                connection with State and local laws that enroll 
                residents in Roth IRAs.
            (2) No fees.--No fees shall be assessed on participants in 
        the MyRA Program.
            (3) Limitations.--
                    (A) Contribution minimum.--The Secretary of the 
                Treasury may establish minimum amounts for initial and 
                additional contributions to a Roth IRA under the MyRA 
                Program, not to exceed $5.
                    (B) Rollover contributions not permitted.--No 
                rollover contribution shall be accepted to a Roth IRA 
                under the MyRA program.
                    (C) Account maximum.--No contributions shall be 
                credited to a Roth IRA under the MyRA Program after the 
                account balance of such Roth IRA reaches $15,000.
                    (D) Limitation on participation.--Within a 
                reasonable amount of time after the earlier of--
                            (i) the date the account balance of a Roth 
                        IRA under the MyRA Program reaches $15,000; or
                            (ii) the earlier of--
                                    (I) the date that the participant 
                                has been a participant in the MyRA 
                                Program for 30 years; or
                                    (II) the date that the participant 
                                reaches age 59\1/2\;
                the designated Roth IRA custodian shall provide notice 
                to the participant that no further contributions will 
                be accepted and that the participant may elect to have 
                the account balance rolled over to another Roth IRA 
                according to the rules relating to rollovers and 
                conversions of Roth IRAs under the Internal Revenue 
                Code of 1986.
                    (E) Adjustment for inflation.--
                            (i) In general.--In the case of any 
                        calendar year after 2022, the $15,000 amount in 
                        subparagraphs (C) and (D) and subsection 
                        (c)(3)(B) shall be increased by an amount equal 
                        to--
                                    (I) such dollar amount, multiplied 
                                by
                                    (II) the cost-of-living adjustment 
                                determined under section 1(f)(3) of the 
                                Internal Revenue Code of 1986 for the 
                                calendar year, determined by 
                                substituting ``calendar year 2021'' for 
                                ``calendar year 2016'' in subparagraph 
                                (A)(ii) thereof.
                            (ii) Rounding.--If any increase determined 
                        under clause (i) is not a multiple of $50, such 
                        increase shall be rounded to the next lowest 
                        multiple of $50.
            (4) Designated roth ira custodian.--For purposes of this 
        section, the designated Roth IRA custodian is the person 
        designated by the Secretary of the Treasury to act as custodian 
        of the Roth IRAs established on behalf of participants in the 
        retirement savings program of such Department.
    (c) Retirement Savings Bonds.--For purposes of this section--
            (1) In general.--The term ``retirement savings bond'' means 
        an interest-bearing electronic United States savings bond 
        issued to the designated Roth IRA custodian which is available 
        only to participants in the MyRA Program.
            (2) Interest rate.--Bonds issued under the MyRA program 
        shall earn interest at a rate equal to the greater of 
        (determined on the issue date)--
                    (A) the rate earned by the Government Securities 
                Investment Fund established under section 8438(b)(1) of 
                title 5, United States Code; or
                    (B) a Series I United States savings bond.
            (3) Bonds to be credited to single account.--Each 
        retirement savings bond issued to the designated Roth IRA 
        custodian shall be credited to a single Roth IRA established 
        through the MyRA Program on behalf of a participant.
            (4) Reissue in case of change in custodian.--If a successor 
        designated Roth IRA custodian is designated under subsection 
        (b)(4), the retirement savings bonds issued to the predecessor 
        designated Roth IRA custodian shall be reissued to such 
        successor.
    (d) Roth IRA.--For purposes of this section, the term ``Roth IRA'' 
has the meaning given such term by section 408A(b) of the Internal 
Revenue Code of 1986.
    (e) Secretary.--For purposes of this section, the term 
``Secretary'' means the Secretary of the Treasury (or the Secretary's 
delegate).

SEC. 4. PROMOTION AND GUIDANCE.

    (a) Promotion.--
            (1) In general.--The Secretary shall take such steps as the 
        Secretary determines are necessary and appropriate to increase 
        public awareness of the benefits provided under section 6433 of 
        the Internal Revenue Code of 1986 and the MyRA Program 
        established under section 3 of this Act.
            (2) Report to congress.--
                    (A) In general.--Not later than 90 days after the 
                date of the enactment of this Act, the Secretary shall 
                provide a report to Congress to summarize the 
                anticipated promotion efforts of the Treasury with 
                respect to paragraph (1).
                    (B) Contents.--The report under subparagraph (A) 
                shall include--
                            (i) a description of plans for--
                                    (I) the development and 
                                distribution of digital and print 
                                materials, including the distribution 
                                of such materials to States for 
                                participants in State-sponsored 
                                retirement savings plans, and
                                    (II) the translation of such 
                                materials into the ten most commonly 
                                spoken languages in the United States 
                                after English (as determined by 
                                American Community Survey data), and
                            (ii) such other information as the 
                        Secretary determines necessary.
    (b) Guidance.--Not later than December 31, 2021, the Secretary 
shall issue guidance on the implementation and administration of the 
amendments made by section 2 of this Act.
    (c) Secretary.--For purposes of this section, the term 
``Secretary'' means the Secretary of the Treasury (or the Secretary's 
delegate).
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