[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 929 Introduced in House (IH)]
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115th CONGRESS
1st Session
H. R. 929
To amend the Internal Revenue Code of 1986 to establish tax-preferred
Small Business Start-up Savings Accounts.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 7, 2017
Ms. Sewell of Alabama (for herself, Mr. Cicilline, and Ms. Shea-Porter)
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 tax-preferred
Small Business Start-up 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 ``Small Business Start-up Savings
Accounts Act of 2017''.
SEC. 2. ESTABLISHMENT OF SMALL BUSINESS START-UP SAVINGS ACCOUNTS.
(a) In General.--Subpart A of part I of subchapter D of chapter 1
of the Internal Revenue Code of 1986 is amended by inserting after
section 408A the following new section:
``SEC. 408B. SMALL BUSINESS START-UP SAVINGS ACCOUNTS.
``(a) General Rule.--Except as provided in this section, a Small
Business Start-up Savings Account shall be treated for purposes of this
title in the same manner as an individual retirement plan.
``(b) Small Business Start-Up Savings Account.--For purposes of
this title, the term `Small Business Start-up Savings Account' means an
individual retirement plan which is designated (in such manner as the
Secretary may prescribe) at the time of establishment of the plan as a
Small Business Start-up Savings Account.
``(c) Treatment of Contributions.--
``(1) No deduction allowed.--No deduction shall be allowed
under section 219 for a contribution to a Small Business Start-
up Savings Account.
``(2) Contribution limit.--
``(A) In general.--The aggregate amount of
contributions for any taxable year to all Small
Business Start-up Savings Accounts maintained for the
benefit of an individual shall not exceed $10,000.
``(B) Aggregate limitation.--The aggregate of the
amount of contributions for all taxable years with
respect to all Small Business Start-up Savings Accounts
maintained for the benefit of an individual shall not
exceed $150,000.
``(C) Cost of living adjustment.--
``(i) In general.--In the case of a taxable
year beginning after 2018, the $10,000 amount
in subparagraph (A) 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 in which
the taxable year begins, determined by
substituting `calendar year 2017' for
`calendar year 1992' in subparagraph
(B) thereof.
``(ii) Rounding.--If any amount as adjusted
under clause (i) is not a multiple of $500,
such amount shall be rounded to the next lowest
multiple of $500.
``(3) Contributions permitted after age 70\1/2\.--
Contributions to a Small Business Start-up Savings Account may
be made even after the individual for whom the account is
maintained has attained age 70\1/2\.
``(4) Rollovers from retirement plans not allowed.--A
taxpayer shall not be allowed to make a qualified rollover
contribution to a Small Business Start-up Savings Account from
any eligible retirement plan (as defined in section
402(c)(8)(B)), except as may be provided by the Secretary in
the case of a rollover from another Small Business Start-up
Savings Account.
``(5) Income based on modified adjusted gross income.--
``(A) In general.--In the case of a taxable year in
which the taxpayer's adjusted gross income exceeds
$150,000 ($300,000 in the case of a joint return), the
dollar amount in effect for such taxable year under
subsection (c)(2) shall be reduced (but not below zero)
by the amount determined under subparagraph (B).
``(B) Amount of reduction.--The amount determined
under this subparagraph shall be the amount which bears
the same ratio to such limitation as--
``(i) the excess of--
``(I) the taxpayer's adjusted gross
income for such taxable year, over
``(II) $150,000 ($300,000 in the
case of a joint return), bears to
``(ii) $25,000.
``(C) Modified adjusted gross income.--The term
`modified adjusted gross income' means the adjusted
gross income of the taxpayer for the taxable year
increased by any amount excluded from gross income
under section 911, 931, or 933.
``(d) Treatment of Distributions.--
``(1) Tax treatment.--
``(A) Exclusion of qualified distributions.--Any
qualified distribution from a Small Business Start-up
Savings Account shall not be includible in gross
income.
``(B) Inclusion of other distributions.--
Distributions from a Small Business Start-up Savings
Account which is not a qualified distribution shall be
included in gross income and, for purposes of section
1, treated as a net capital gain.
``(2) Qualified distribution.--For purposes of this
subsection, the term `qualified distribution' means, with
respect to any taxable year, any payment or distribution from a
Small Business Start-up Savings Account--
``(A) to the extent the amount of such payment or
distribution does not exceed the sum of--
``(i) the aggregate amounts paid or
incurred by the taxpayer for such taxable year
with respect to a trade or business for the
purchase of equipment or facilities, marketing,
training, incorporation, and accounting fees,
and
``(ii) the aggregate capital contributions
of the taxpayer with respect to a trade or
business for the taxable year (but only to the
extent such amounts are used in such trade or
business for purposes described in clause (i)),
and
``(B) which, in the case of a payment or
distribution subsequent to the first payment or
distribution from such account (or any predecessor to
such account)--
``(i) is made not later than the close of
the 5th taxable year beginning after the date
of such first payment or distribution, and
``(ii) is made with respect to the same
trade or business with respect to which such
first payment or distribution was made.
``(3) Treatment after death of account beneficiary.--If, by
reason of the death of the account beneficiary, any person
acquires the account beneficiary's interest in a Small Business
Start-up Savings Account--
``(A) such account shall cease to be a Small
Business Start-up Savings Account as of the date of
death, and
``(B) an amount equal to the fair market value of
the assets in such account on such date shall be
includible--
``(i) in the case of a person who is not
the estate of such beneficiary, in such
person's gross income for the taxable year
which includes such date, or
``(ii) in the case of a person who is the
estate of such beneficiary, in such
beneficiary's gross income for the last taxable
year of such beneficiary.
``(C) Special rules.--
``(i) Reduction of inclusion for predeath
expenses.--The amount includible in gross
income under subparagraph (B) shall be reduced
by the amounts described in paragraph (2) which
were incurred by the decedent before the date
of the decedent's death and paid by such person
within 1 year after such date.
``(ii) Deduction for estate taxes.--An
appropriate deduction shall be allowed under
section 691(c) to any person (other than the
decedent) with respect to amounts included in
gross income under clause (i) by such person.
``(4) Mandatory distribution rules not to apply.--Section
401(a)(9)(A) and the incidental death benefit requirements of
section 401(a) shall not apply to any Small Business Start-up
Savings Account.''.
(b) Excess Contributions.--Section 4973 of such Code is amended by
adding at the end the following new subsection:
``(i) Excess Contributions to Small Business Start-Up Savings
Accounts.--For purposes of this section, in the case of contributions
to all Small Business Start-up Savings Accounts (within the meaning of
section 408B(b)) maintained for the benefit of an individual, the term
`excess contributions' means the sum of--
``(1) the excess (if any) of--
``(A) the amount contributed to such accounts for
the taxable year, over
``(B) the amount allowable as a contribution under
section 408B(c)(2)(A) for such taxable year, and
``(2) the amount determined under this subsection for the
preceding taxable year, reduced by the sum of--
``(A) the distributions out of the accounts for the
taxable year, and
``(B) the excess (if any) of--
``(i) the maximum amount allowable as a
contribution under section 408B(c)(2)(A) for
such taxable year, over
``(ii) the amount contributed to such
accounts for such taxable year, and
``(3) the excess (if any) of--
``(A) the excess (if any) of--
``(i) the aggregate amounts contributed to
such accounts for all taxable years, over
``(ii) the aggregate amount allowable as
contributions under section 408B(c)(2)(B) for
all taxable years, over
``(B) the amount determined under this paragraph
for all preceding taxable years.''.
(c) Conforming Amendment.--The table of sections for subpart A of
part I of subchapter D of chapter 1 of such Code is amended by
inserting after the item relating to section 408A the following new
item:
``Sec. 408B. Small Business Start-up Savings Accounts.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2017.
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