To amend the Internal Revenue Code of 1986 to allow retroactive elective deferrals for owners of unincorporated businesses in the case of a plan adopted after the close of the taxable year and before the time for filing the return of tax.

Bill: 117-hr-2943
Sponsor: full_name: Rep. Schweikert, David [R-AZ-6]
Introduced: 2021-04-30
Policy area: Taxation
Subjects: Employee benefits and pensions

Income tax deferral

Income tax exclusion
Latest action: action_date: 2021-04-30
text: Referred to the House Committee on Ways and Means.

Summaries:
action_date: 2021-04-30
action_desc: Introduced in House
text: <p>This bill allows sole proprietors a retroactive elective deferral under a tax-exempt retirement plan that is adopted after the close of the taxable year and before the time for the filing of the individual's tax return. The elective deferral is treated as made prior to the end of the plan's first plan year.</p> <p>An <em>elective deferral </em>is an amount contributed to certain tax-exempt retirement plans (e.g., 401(k)s, 403(b)s, SIMPLE pension plans and IRAs) by an employer at the employee's election and which, except to the extent they are designated Roth IRA contributions, are excludable from the employee's gross income.</p>

tv_txt: I 117th CONGRESS 1st Session H. R. 2943 IN THE HOUSE OF REPRESENTATIVES April 30, 2021 Mr. Schweikert 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 allow retroactive elective deferrals for owners of unincorporated businesses in the case of a plan adopted after the close of the taxable year and before the time for filing the return of tax.

1. Retroactive first year elective deferrals for sole proprietors (a) In general Section 401(b) of the Internal Revenue Code of 1986 is amended by adding at the end the following: In the case of an individual who owns the entire interest in an unincorporated trade or business, and who is the only employee of such trade or business, any elective deferral (as defined in section 402(g)(3)) under a plan to which the preceding sentence applies which is made by such individual before the time for filing the return of such individual for the taxable year (determined without regard to any extensions) shall be treated as having been made before the end of the plan’s first plan year. . (b) Effective date The amendment made by this section shall apply to plan years beginning after December 31, 2021.