II 117th CONGRESS 1st Session S. 2452 IN THE SENATE OF THE UNITED STATES July 22, 2021 Mr. Wyden (for himself, Mr. Bennet , Mr. Casey , Mr. Durbin , Ms. Klobuchar , Mr. Menendez , and Mrs. Murray ) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to provide matching payments for retirement savings contributions by certain individuals, and for other purposes.

1. Short title This Act may be cited as the Encouraging Americans to Save Act . 2. Saver's matching credit 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: 6433. Saver's matching credit for elective deferral and IRA contributions by certain individuals (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 $2,000. (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 $65,000, 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 ½ of the amounts applicable under subparagraph (A) (as so adjusted). (4) Exception; minimum credit In the case of an eligible individual with respect to whom (without regard to this paragraph) the credit determined under subsection (a)(1) is greater than zero but less than $100, the credit allowed under this section shall be $100. (c) Eligible individual For purposes of this section— (1) In general Except as provided in paragraph (2), 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 not eligible The term eligible individual shall not include 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. (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), (C) the amount of voluntary employee contributions by such individual to any qualified retirement plan (as defined in section 4974(c)), and (D) the amount of contributions by such individual to a qualified ABLE program (as defined in section 529A(b)) for the benefit of the individual. 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 beginning on the day after the last day of such taxable year and ending with 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, (iii) any distribution to which the rules described in the second sentence of section 529A(b)(2) apply, and (iv) 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 savings 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), (B) in the case of qualified retirement savings contributions described in subsection (d)(1)(D), the qualified ABLE program (as defined in section 529A(b)) to which such contributions were made, or (C) if no such election is made or the Secretary is not able to make a contribution into such account or plan, an account established for the benefit of the eligible individual under the R-Bond Program. For purposes of subparagraph (C), if no account has previously been established for the benefit of the individual under the R-Bond Program, the Secretary shall establish such an account for such individual for purposes of receiving contributions under this section. (2) Other retirement vehicles An eligible individual may elect, in such form and manner as the Secretary may provide, to have the amount of the credit 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, and (C) accepts contributions made under this section. In the case of a plan of which a qualified trust under section 401(a) is a part, an annuity contract described in section 403(b), or a plan described in section 457(b) which is established and maintained by an employer described in section 457(e)(1)(A), the plan shall have discretion whether to accept contributions made under this section, but if the plan accepts any such contributions it shall accept them on a uniform basis. (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 as— (i) an elective deferral made by the individual which is a designated Roth contribution, if contributed to an applicable retirement plan, or (ii) a Roth IRA contribution made by such individual, if contributed to a Roth IRA, (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), and shall be disregarded for purposes of sections 401(a)(4), 401(k)(3), 401(k)(11)(B)(i)(III), 410(b), and 416. (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 2023, each of the dollar amounts in subsections (a)(1) 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 2022 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)(1), 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 or 6431 and inserting 6431, or 6433 . (c) Deficiencies Section 6211(b)(4) is amended by striking and 6431 and inserting 6431, and 6433 . (d) Reporting The Secretary of Labor, the Secretary of the Treasury, and the Director of the Pension Benefit Guaranty Corporation shall— (1) amend Form 5500 to require separate reporting of the aggregate amount of contributions received by the plan during the year under section 6433(a)(2) of the Internal Revenue Code of 1986 (as added by this section), and (2) amend Form 5498 to require similar reporting with respect to individual retirement plans (as defined in section 7701(a)(37) of such Code). (e) Conforming amendments (1) Section 25B of the Internal Revenue Code of 1986 is amended by striking subsections (a) through (f) and inserting the following: 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 at the end the following new item: Sec. 6433. Saver's matching credit for elective deferral and IRA contributions by certain individuals. . (f) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2022. (g) Coronavirus recovery bonus credit (1) In general In the case of taxable years beginning after December 31, 2022, and before January 1, 2028, the amount of the credit determined under section 6433 of the Internal Revenue Code of 1986, as added by this section, shall be increased by an amount equal to 50 percent of so much of the qualified retirement savings contributions made by an eligible individual for the taxable year as does not exceed— (A) $10,000, reduced by (B) the aggregate amount of qualified retirement savings contributions made by the eligible individual in all preceding taxable years which begin after December 31, 2022. (2) Phaseout The $10,000 amount under paragraph (1)(A) shall be reduced (but not below zero) by a percentage which bears the same ratio to 50 percent as— (A) the excess of— (i) the taxpayer’s modified adjusted gross income for the 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) Definitions For purposes of this subsection, the terms qualified retirement savings contributions , eligible individual , applicable dollar amount , and phaseout range have the meanings given such terms by subsections (d), (c), and (b), respectively, of section 6433 of such Code, as so added. 3. Establishment of R-Bond Program (a) In general The Secretary of the Treasury shall, not later than January 31, 2023, establish a permanent program, to be known as the R-Bond Program , which meets the requirements of this section to establish and maintain individual retirement plans on behalf of individuals. (b) Program specifications (1) In general (A) IRA s The R-Bond Program established under this section shall— (i) permit the establishment of individual retirement plans on behalf of an individual, whether a traditional IRA or a Roth IRA or both, as appropriate; (ii) require the assets of each individual retirement plan established under the program to be held by the designated IRA trustee; (iii) permit contributions to be made periodically to such individual retirement plans, including contributions paid under section 6433(a)(2) of the Internal Revenue Code of 1986, contributions made by direct deposit or other electronic means, including taxpayer-directed direct deposit of Federal income tax refunds by the Department of the Treasury, and by methods that provide access for the unbanked; (iv) permit distributions and rollovers from such individual retirement plans upon request of the account owner; (v) include procedures to consolidate multiple accounts established for the same individual in order that each individual, to the extent practicable, has only one Roth IRA and only one traditional IRA under the program; and (vi) ensure that such individual retirement plans are invested solely in retirement savings bonds issued by the Department of the Treasury for the purpose of the R-Bond 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 R-Bond Program, and are consistent with this section, as well as coordination rules permitting individual retirement plans to be established under the R-Bond Program by taxpayer election on the return of tax, and in connection with and in support of programs established under State and local laws that enroll residents in individual retirement plans. (2) No fees No fees shall be assessed on participants in the R-Bond Program. (3) Limitations (A) Contribution minimum The Secretary of the Treasury may establish minimum amounts for initial and additional contributions to an individual retirement plan under the R-Bond Program, not to exceed $5. (B) Limitation of rollover contributions and transfers No rollover contribution or transfer shall be accepted to an individual retirement plan under the R-Bond Program except to the extent necessary to consolidate accounts as provided in paragraph (1)(v). (4) Designated IRA trustee For purposes of this section, the designated IRA trustee is the Department of the Treasury or such other person as the Secretary of the Treasury may designate to act as trustee of the individual retirement plans established under the R-Bond Program. (5) Disclosures The designated IRA trustee shall provide in writing, in paper form mailed to the last known address of the individual unless the individual affirmatively elects to receive electronic statements— (A) annual account balance statements to individuals on behalf of whom individual retirement plans are established under the R-Bond Program, which shall include— (i) an explanation that— (I) program account balances are solely invested in retirement savings bonds issued by the Department of the Treasury for the purpose of the R-Bond Program; (II) diversified investment opportunities which are not guaranteed by the Federal government are available for individual retirement plans established by other providers; (III) no fees are charged under the R-Bond Program; and (IV) the individual has the right to roll over or transfer an account balance without penalty; (ii) an illustration of the potential impacts that higher yields may have on long-term accumulation; and (iii) information on the types of fees that other providers may charge for the establishment of individual retirement plans, and the impact of fees on long-term accumulation; and (B) if the account balance of the individual retirement plan exceeds $15,000 and the individual has not previously so affirmed, a request that the individual affirm (including instructions for making such affirmation) to the designated IRA trustee that the individual does not want to roll over such account balance to another plan (according to the rules relating to rollovers and transfers of individual retirement plans under the Internal Revenue Code of 1986). (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 IRA trustee which is available only to participants in the R-Bond Program. (2) Interest rate Bonds issued under the R-Bond Program shall earn interest at a rate equal to the greater of (determined on the issue date of the bond)— (A) the rate earned by the Government Securities Investment Fund established under section 8438(b)(1) of title 5, United States Code, or (B) the rate earned by a Series I United States savings bond. (3) Reissue in case of change in trustee If a successor designated IRA trustee is designated under subsection (b)(4), the retirement savings bonds issued to the predecessor designated IRA trustee shall be reissued to such successor. (d) Definitions For purposes of this section— (1) Individual retirement plan The term individual retirement plan has the meaning given such term by section 7701(a)(37) of the Internal Revenue Code of 1986. (2) Traditional IRA The term traditional IRA means an individual retirement plan which is not a Roth IRA. (3) Roth IRA The term Roth IRA has the meaning given such term by section 408A(b) of such Code. (4) Secretary Any reference to the Secretary of the Treasury includes a reference to such Secretary's delegate. 4. Promotion and guidance (a) Promotion The Secretary of the Treasury (or the Secretary's delegate) shall educate taxpayers on the benefits provided under section 6433 of the Internal Revenue Code of 1986 and the R-Bond Program established under section 3 of this Act. (b) Notice Not later than 1 year after the date of the enactment of this Act— (1) Plan administrators The Secretary of the Treasury (or the Secretary's delegate) and the Secretary of Labor, as appropriate, shall issue guidance to plan administrators regarding information on the benefits provided under section 6433 of the Internal Revenue Code of 1986 and the R-Bond Program established under section 3 of this Act for participants and beneficiaries which is to be required to be included in plan disclosures including summary plan descriptions, open enrollment materials, and annual notices otherwise provided by plans. Such guidance— (A) shall include model notice language in both English and Spanish that is deemed to satisfy the notice requirement of the preceding sentence, and (B) in the case of annual enrollment materials for a plan, shall specify that such notice may be given at the same time as any elective deferral or matching contribution safe harbor notice would be required to be given (even if the plan does not incorporate such a safe harbor) and may be incorporated into such safe harbor notice. (2) Trustees and issuers of IRAs The Secretary of the Treasury (or the Secretary's delegate) and the Secretary of Labor, as appropriate, shall issue guidance to trustees and issuers of individual retirement plans regarding information on the benefits provided under section 6433 of the Internal Revenue Code of 1986 and the R-Bond Program established under section 3 of this Act for potentially eligible individuals which is to be required to be included in individual retirement plan disclosures. (3) Payment of credits Not later than 3 years after the date of the enactment of this Act, the Secretary of the Treasury (or the Secretary's delegate) shall promulgate guidance setting forth procedures that permit the direct payment of credits under section 6433 to an employer-sponsored plan in which the taxpayer is a participant and that elects to receive such credits, including rules regarding notice to taxpayers and a plan of a payment of such credit and notice from a plan to a taxpayer and the Secretary confirming receipt of a payment. 5. Deadline to fund IRA with tax refund (a) In general Paragraph (3) of section 219(f) of the Internal Revenue Code of 1986 is amended— (1) by striking is made not later than and inserting “is made— (i) not later than , (2) by striking the period at the end and inserting , or , and (3) by adding at the end the following new clause: (ii) by direct deposit by the Secretary pursuant to an election on the return for such taxable year to contribute all or a portion of any amount owed to the taxpayer to an individual retirement plan of the taxpayer, but only if the return is filed not later than the date described in clause (i). . (b) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2021.