EARN Act

Bill: 117-s-4808
Sponsor: Sen. Wyden, Ron [D-OR]
Introduced: 2022-09-08 in the Senate
Policy area: Taxation
Subjects: Bank accounts, deposits, capital
Disaster relief and insurance
Employee benefits and pensions
First responders and emergency personnel
Government employee pay, benefits, personnel management
Income tax credits
Income tax deferral
Life, casualty, property insurance
Military personnel and dependents
Sales and excise taxes
Small business

Summary:
action_date: 2022-09-08
text: 
 
Enhancing American Retirement Now Act or the EARN Act 

 
This bill revises tax provisions relating to retirement plans for individuals, retirees, public safety officers and military personnel, and employer plans. 

action_date: 2022-09-08
text: 

Enhancing American Retirement Now Act or the EARN Act

 
This bill revises or establishes new tax provisions relating to retirement plans for individuals, retirees, public safety officers and military personnel, disaster relief, and employer plans.
 
The bill revises various provisions relating to individual retirement plans, including provisions to (1) establish a safe harbor for automatic enrollment plans; (2) allow a refundable income tax credit, up to $1,000, for retirement savings contributions; (3) allow penalty-free withdrawals from plans for emergency expenses; (4) modify age requirements for catch-up provisions; (5) allow penalty free withdrawals from plans in domestic abuse cases; (6) allow transfers of plans (portability); and (7) modify the age requirement for ABLE programs for disabled individuals. 
 
The bill makes changes to plans for retirees, including by (1) increasing the age for the start of mandatory plan distributions, (2) reducing the excise tax on certain accumulations in qualified retirement plans, (3) recovering retirement plan overpayments, (4) modifying certain Roth IRA distribution requirements, and (5) allowing plan distributions for individuals with a terminal illness.
 
The bill modifies provisions relating to retirement plans of public safety offices and military personnel. It allows (1) small employers a tax credit for establishing military spouse retirement plans, (2) penalty-free distributions to firefighters, (3) a tax exclusion for certain disability-related payment for first responders, and (4) an exemption from the early withdrawal penalty for distributions to certain state and local corrections employees. 
 
The bill establishes special tax rules for the use of retirement funds for federally declared disasters. 
 
The bill also modifies or establishes requirements relating to employer plans, including (1) allowing a tax credit for small employers with respect to safe harbor requirements for retirement plans, (2) increasing the credit limitation for small employer pension plan startup costs, (3) reforming family attribution rules, (4) providing for starter 401(k) plans for employers with no retirement plan, (5) allowing a tax credit for small employers that adopt an automatic portability arrangement, (6) modifying Internal Revenue Service mortality tables, (7) extending the period for transferring excess pension assets to retiree heath accounts, and (8) deferring the tax on certain sales of employer stock to employee stock ownership plans sponsored by S corporations. 
 
The bill modifies provisions relating to the retirement of U.S. Tax Court judges, including participation in the Thrift Savings Plan.


Legislative actions:
action_date: 2022-09-08
text: Placed on Senate Legislative Calendar under General Orders. Calendar No. 480.
action_date: 2022-09-08
text: Committee on Finance. Original measure reported to Senate by Senator Wyden. With written report No. 117-142.
action_date: 2022-09-08
text: Committee on Finance. Original measure reported to Senate by Senator Wyden. With written report No. 117-142.
action_date: 2022-09-08
text: Introduced in Senate