Universal Savings Account Act of 2024
This bill creates a new tax-exempt savings account to be known as a Universal Savings Account (USA). The bill allows eligible taxpayers to open an account and contribute up to $10,000 (adjusted for inflation) to an account each year. Contributions must be in cash and the allowable amount of contributions is subject to a phaseout based upon the taxpayer's modified adjusted gross income.
Distributions from a USA are excludible from gross income, for income tax purposes, and may be transferred to a taxpayer's spouse or child upon the death of the taxpayer.
[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9010 Introduced in House (IH)]
<DOC>
118th CONGRESS
2d Session
H. R. 9010
To amend the Internal Revenue Code of 1986 to establish universal
savings accounts.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 11, 2024
Mrs. Harshbarger (for herself, Mr. Grothman, Mr. Ogles, Mr. Pfluger,
and Mr. Van Orden) 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 establish universal
savings accounts.
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 ``Universal Savings Account Act of
2024''.
SEC. 2. UNIVERSAL SAVINGS ACCOUNTS.
(a) In General.--Subchapter F of chapter 1 of the Internal Revenue
Code of 1986 is amended by adding at the end the following new part:
``PART IX--UNIVERSAL SAVINGS ACCOUNTS
``Sec. 530U. Universal savings accounts.
``SEC. 530U. UNIVERSAL SAVINGS ACCOUNTS.
``(a) General Rule.--A universal savings account shall be exempt
from taxation under this subtitle. Notwithstanding the preceding
sentence, such account shall be subject to the taxes imposed by section
511 (relating to imposition of tax on unrelated business income of
charitable organizations).
``(b) Universal Savings Account.--For purposes of this section, the
term `universal savings account' means a trust created or organized in
the United States by an individual for the exclusive benefit of such
individual and which is designated (in such manner as the Secretary may
prescribe) at the time of the establishment of the trust as a universal
savings account, but only if the written governing instrument creating
the trust meets the following requirements:
``(1) Except in the case of a qualified rollover
contribution described in subsection (d)--
``(A) no contribution will be accepted unless it is
in cash, and
``(B) contributions will not be accepted for the
taxable year in excess of the contribution limit
specified in subsection (c)(2).
``(2) No distribution will be made unless it is--
``(A) cash, or
``(B) property that--
``(i) has a readily ascertainable fair
market value, and
``(ii) is identified by the Secretary in
regulations or other guidance as property to
which this subparagraph applies.
``(3) The trustee is a bank (as defined in section 408(n))
or another person who demonstrates to the satisfaction of the
Secretary that the manner in which that person will administer
the trust will be consistent with the requirements of this
section.
``(4) No part of the trust assets will be invested in life
insurance contracts or collectibles (as defined in section
408(m)).
``(5) The interest of an individual in the balance of his
account is nonforfeitable.
``(6) The assets of the trust shall not be commingled with
other property except in a common trust fund or common
investment fund.
``(c) Treatment of Distributions and Contributions.--
``(1) Distributions.--
``(A) In general.--Except as provided in
subparagraph (B), any distribution from a universal
savings account shall not be includible in gross
income.
``(B) Net income attributable to excess
contributions.--Any distribution of net income
described in section 4973(i)(2) shall be includible in
the gross income of the account holder in the taxable
year in which the contribution to which such net income
relates was made.
``(2) Contribution limit.--
``(A) In general.--The aggregate amount of
contributions (other than qualified rollover
contributions described in subsection (d)) for any
taxable year to all universal savings accounts
maintained for the benefit of an individual shall not
exceed the lesser of--
``(i) $10,000, or
``(ii) an amount equal to the compensation
(within the meaning of section 219) includible
in such individual's gross income for such
taxable year.
``(B) Phaseout.--
``(i) In general.--The amount allowable as
a contribution under subparagraph (A)(i)
(determined without regard to this
subparagraph) shall be reduced by $50 for each
$1,000 (or fraction thereof) by which the
taxpayer's modified adjusted gross income
exceeds the applicable threshold amount.
``(ii) Applicable threshold amount.--For
purposes of this subparagraph, the term
`applicable threshold amount means'--
``(I) $400,000, in the case of a
joint return or surviving spouse,
``(II) $300,000 in the case of a
head of household, or
``(III) $200,000 in the case of any
other return.
``(iii) Modified adjusted gross income.--
For purposes of this subparagraph, the term
`modified adjusted gross income' means adjusted
gross income increased by any amount excluded
from gross income under section 911, 931, or
933.
``(C) No contributions for dependents.--In the case
of an individual who is a dependent of another taxpayer
for a taxable year beginning in the calendar year in
which such individual's taxable year begins, the dollar
amount under subparagraph (A) for such individual's
taxable year shall be zero.
``(D) Cost-of-living adjustment.--In the case of
any taxable year beginning in a calendar year after
2025, the dollar amounts in subparagraphs (A)(i) and
(B)(ii) shall be increased by an amount equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for the
calendar year, determined by substituting
`calendar year 2024' for `calendar year 2016'
in subparagraph (A)(ii) thereof.
If any amount after adjustment under the preceding
sentence is not a multiple of $100, such amount shall
be rounded to the next lower multiple of $100.
``(d) Qualified Rollover Contribution.--For purposes of this
section, the term `qualified rollover contribution' means a
contribution to a universal savings account from another such account
of the same individual, but only if such amount is contributed not
later than the 60th day after the distribution from such other account.
``(e) Treatment of Account Upon Death.--Upon death of any account
holder of a universal savings account--
``(1) Spouse or child.--In the case of the account holder's
surviving spouse or child acquiring such account holder's
interest in such account by reason of the death of the account
holder, such account shall be treated as if the acquiring
spouse or child were the account holder.
``(2) Other cases.--In any other case--
``(A) all amounts in such account shall be treated
as distributed on the date of such individual's death,
and
``(B) such account shall cease to be treated as a
universal savings account.
``(f) Other Special Rules.--
``(1) Community property laws.--This section shall be
applied without regard to any community property laws.
``(2) Loss of taxation exemption of account where
individual engages in prohibited transaction; effect of
pledging account as security.--Rules similar to the rules of
paragraphs (2) and (4) of section 408(e) shall apply to any
universal savings account.
``(g) Reports.--The trustee of a universal savings account shall
make such reports regarding such account to the Secretary and to the
account holder with respect to contributions, distributions, and such
other matters as the Secretary may require. Such reports shall be--
``(1) filed at such time and in such manner as the
Secretary provides, and
``(2) furnished to account holders--
``(A) not later than January 31 of the calendar
year following the calendar year to which such reports
relate, and
``(B) in such manner as the Secretary provides.''.
(b) Tax on Excess Contributions.--
(1) In general.--Section 4973(a) of such Code is amended by
striking ``or'' at the end of paragraph (5), by inserting
``or'' at the end of paragraph (6), and by inserting after
paragraph (6) the following new paragraph:
``(7) a universal savings account (as defined in section
530U),''.
(2) Excess contribution.--Section 4973 of such Code is
amended by adding at the end the following new subsection:
``(i) Excess Contributions to Universal Savings Accounts.--For
purposes of this section--
``(1) In general.--In the case of universal savings
accounts (within the meaning of section 530U), the term `excess
contributions' means the sum of--
``(A) the amount (if any) by which the amount
contributed for the taxable year to such accounts
(other than qualified rollover contributions (as
defined in section 530U(d))) exceeds the contribution
limit under section 530U(c)(2) for such taxable year,
and
``(B) the amount determined under this subsection
for the preceding taxable year, reduced by the sum of--
``(i) the distributions out of the account
for the taxable year, and
``(ii) the amount (if any) by which the
maximum amount allowable as a contribution
under section 530U(c)(2) for the taxable year
exceeds the amount contributed to the accounts
for the taxable year.
``(2) Special rule.--A contribution shall not be taken into
account under paragraph (1) if such contribution (together with
the amount of net income attributable to such contribution) is
distributed to the account holder on or before the due date of
the account holder's return of tax for such taxable year.''.
(c) Tax on Prohibited Transactions.--Section 4975(e)(1) of such
Code is amended by striking ``or'' at the end of subparagraph (F), by
striking the period at the end of subparagraph (G) and inserting ``,
or'', and by adding at the end the following new subparagraph:
``(H) a universal savings account (as defined in
section 530U).''.
(d) Failure To Provide Reports on Universal Savings Accounts.--
Section 6693(a)(2) of such Code is amended by striking ``and'' at the
end of subparagraph (E), by striking the period at the end of
subparagraph (F) and inserting ``, and'', and by inserting after
subparagraph (F) the following new subparagraph:
``(G) section 530U(g) (relating to universal
savings accounts).''.
(e) Conforming Amendment.--The table of parts for subchapter F of
chapter 1 of such Code is amended by adding at the end the following
new item:
``Part IX. Universal Savings Accounts''.
(f) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2024.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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