Title: To amend the Internal Revenue Code of 1986 to provide for tax preferred savings accounts for individuals under age 26, and for other purposes.
Policy area: Taxation

Summary:
This bill amends the Internal Revenue Code to establish a tax-preferred individual retirement account for taxpayers under age 26, to be known as a young savers account. The bill treats such accounts as Roth individual retirement accounts for income tax purposes, with the exception of specified modifications to the rules regarding contribution limits.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2420 Introduced in House (IH)]

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115th CONGRESS
  1st Session
                                H. R. 2420

To amend the Internal Revenue Code of 1986 to provide for tax preferred 
 savings accounts for individuals under age 26, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 11, 2017

  Mr. Rouzer 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 preferred 
 savings accounts for individuals under age 26, and for other purposes.

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

SECTION 1. YOUNG SAVERS ACCOUNTS.

    (a) Establishment of Accounts.--
            (1) In general.--Section 408A of the Internal Revenue Code 
        of 1986 (relating to Roth IRAs) is amended by adding at the end 
        the following new subsection:
    ``(g) Young Savers Account.--
            ``(1) In general.--Except as provided in this subsection, a 
        young savers account shall be treated in the same manner as a 
        Roth IRA.
            ``(2) Young savers account.--For purposes of this 
        subsection, the term `young savers account' means, with respect 
        to any taxable year, a Roth IRA which is established and 
        maintained on behalf of an individual who has not attained age 
        26 before the close of the taxable year.
            ``(3) Contribution limits.--
                    ``(A) Limit on accounts with respect to 
                individual.--In the case of any contributions for any 
                taxable year to one or more young savers accounts 
                established and maintained on behalf of an individual, 
                the amount determined with respect to such individual 
                under subsection (c)(2)(A) shall be treated as the 
                amount in effect for the taxable year under section 
                219(b)(5) (determined without regard to subparagraph 
                (B) thereof).
                    ``(B) Limit on contributors.--The aggregate amount 
                of qualified young saver contributions an individual 
                may make for any taxable year to all young savers 
                accounts shall not exceed the deductible amount in 
                effect for the taxable year under section 219(b)(5) 
                (determined without regard to subparagraph (B) 
                thereof).
                    ``(C) Special rule for recontribution of amount 
                distributed for higher education expenses.--In the case 
                of a young savers account from which an individual 
                receives a distribution to which section 72(t)(2)(E) 
                applies (or would have applied had such distribution 
                been includible in gross income), subparagraphs (A) and 
                (B) shall not apply to any contribution made by such 
                individual to a Roth IRA of such individual (and there 
                shall not be taken into account under subsection (c)(2) 
                any such contribution) to the extent such contribution 
                does not exceed the excess (if any) of--
                            ``(i) the aggregate amount of such 
                        distributions made during the 20-year period 
                        ending on the date of the contribution to which 
                        this subparagraph is applied, over
                            ``(ii) the aggregate amount of 
                        contributions to which this subparagraph 
                        applies for all taxable years.
            ``(4) Qualified contributions.--For purposes of this 
        subsection, the term `qualified young saver contribution' means 
        a contribution by an individual (with respect to whom a young 
        savers account is not established and maintained during the 
        taxable year) to a young savers account established and 
        maintained on behalf of another individual.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2017.
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