Expanding Access to Retirement Savings for Caregivers Act
Bill: H.R.3644 | Sponsor: Rep. Walorski, Jackie (R-IN)
Policy area: Taxation

Summary:
Expanding Access to Retirement Savings for Caregivers Act
This bill allows an individual to make annual catch up contributions to a retirement account before reaching age 50 if the individual leaves the workforce to provide dependent cares services.
Specifically, the individual must have been unemployed, and have had no earned income, as a result of providing care to (1) a dependent under the age of 13, or (2) a spouse physically or mentally incapable of self-care.

To amend the Internal Revenue Code of 1986 to reduce the age for making 
catch-up contributions to retirement accounts to take into account time 
        out of the workforce to provide dependent care services.

    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 ``Expanding Access to Retirement 
Savings for Caregivers Act''.

SEC. 2. REDUCTION OF AGE FOR MAKING CATCH-UP CONTRIBUTIONS FOR 
              INDIVIDUALS OUT OF WORKFORCE TO PROVIDE DEPENDENT CARE 
              SERVICES.

    (a) Individual Retirement Plans.--Section 219(b)(5) of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
subparagraph:
                    ``(D) Reduction of age for making catch-up 
                contributions for individuals out of workforce to 
                provide dependent care services.--
                            ``(i) In general.--In the case of an 
                        eligible individual, subparagraph (B)(i) shall 
                        be applied by substituting `the applicable age 
                        with respect to such individual' for `the age 
                        of 50'.
                            ``(ii) Applicable age.--For purposes of 
                        this subparagraph, the term `applicable age' 
                        means, with respect to any eligible individual 
                        for any taxable year, 50 reduced by the number 
                        of years which is equal to the duration of the 
                        aggregate qualified unemployment periods with 
                        respect to such individual (determined as of 
                        the beginning of such taxable year). For 
                        purposes of the preceding sentence any duration 
                        of aggregate qualified unemployment periods 
                        which is not a multiple of a whole number of 
                        years shall be rounded to the next lowest whole 
                        number of years.
                            ``(iii) Eligible individual.--For purposes 
                        of this subparagraph, the term `eligible 
                        individual' means, with respect to any taxable 
                        year, any individual who has one or more 
                        qualified unemployment periods determined as of 
                        the beginning of such taxable year.
                            ``(iv) Qualified unemployment period.--For 
                        purposes of this subparagraph, the term 
                        `qualified unemployment period' means, with 
                        respect to any individual, any uninterrupted 
                        period--
                                    ``(I) which is not less than 1 
                                year,
                                    ``(II) which begins after such 
                                individual attains age 18, and
                                    ``(III) during which such 
                                individual has no earned income (as 
                                defined in section 32(c)(2)) on account 
                                of such individual's provision of care 
                                to one or more qualifying individuals 
                                (as defined in section 21(b)(1)).
                            ``(v) Declaration requirement.--A qualified 
                        unemployment period shall not be taken into 
                        account under this subparagraph with respect to 
                        any individual unless such individual has 
                        submitted to the Secretary a written 
                        declaration made under the penalties of perjury 
                        that such period meets the requirements of 
                        clause (iv) with respect to such individual. 
                        The trustee may rely on such declaration unless 
                        the trustee knows, or has reason to know, that 
                        such declaration is false.''.
    (b) Elective Deferrals.--Section 414(v) of such Code is amended by 
adding at the end the following new paragraph:
            ``(7) Reduction of age for making catch-up contributions 
        for individuals out of workforce to provide dependent care 
        services.--
                    ``(A) In general.--In the case of an eligible 
                participant, paragraph (5)(A) shall be applied by 
                substituting `the applicable age with respect to such 
                participant' for `age 50'.
                    ``(B) Application of definitions and rules.--For 
                purposes of this paragraph, clauses (ii), (iii), (iv), 
                and (v) of section 219(b)(5)(D) shall apply--
                            ``(i) by substituting `participant' for 
                        `individual' each place it appears in such 
                        clauses, and
                            ``(ii) by substituting `plan administrator' 
                        for `trustee' in such clause (v).
                    ``(C) Error correction.--The Secretary shall issue 
                regulations or other guidance under which an applicable 
                employer plan may correct for an impermissible catch-up 
                contribution by providing for a distribution of such 
                contribution together with any earnings properly 
                attributable thereto.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
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