[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 334 Introduced in House (IH)]







104th CONGRESS
  1st Session
                                H. R. 334

  To amend the Internal Revenue Code of 1986 to encourage savings by 
increasing the amount of deductible contributions which may be made to 
                   an individual retirement account.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 4, 1995

  Mr. Neal of Massachusetts 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 encourage savings by 
increasing the amount of deductible contributions which may be made to 
                   an individual retirement account.

    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 ``Individual Retirement Improvement 
Act of 1995''.

SEC. 2. ACTIVE PARTICIPANTS ALLOWED DEDUCTIONS FOR 50 PERCENT OF 
              CONTRIBUTIONS.

    (a) General Rule.--Paragraph (1) of section 219(g) of the Internal 
Revenue Code of 1986 (relating to limitation on deduction of active 
participants in certain pension plans) is amended to read as follows:
            ``(1) In general.--If (for any part of any plan year ending 
        with or within a taxable year) an individual or the 
        individual's spouse is an active participant, the amount 
        allowed as a deduction under subsection (a) for such taxable 
        year shall be the sum of--
                    ``(A) 100 percent of the amount which would have 
                been allowable for such taxable year if each of the 
                dollar limitations contained in subsections (b)(1)(A) 
                and (c)(2) were reduced (but not below zero) by the 
                amount determined under paragraph (2), plus
                    ``(B) 50 percent of the excess of--
                            ``(i) the amount which would have been 
                        allowable for such taxable year without regard 
                        to this subsection, over
                            ``(ii) the amount determined under 
                        subparagraph (A).
        The percentage in subparagraph (B) shall be reduced (but not 
        below 25 percent) by 1 percentage point for each $1,000 (or 
        fraction thereof) by which the adjusted gross income of the 
        taxpayer for the taxable year exceeds $200,000.''
    (b) Effective Date.--The amendment made by this section shall apply 
to contributions for taxable years beginning after December 31, 1994.

SEC. 3. HOMEMAKERS ELIGIBLE FOR FULL IRA DEDUCTION.

    (a) Spousal IRA Computed on Basis of Compensation of Both 
Spouses.--Subsection (c) of section 219 of the Internal Revenue Code of 
1986 (relating to special rules for certain married individuals) is 
amended to read as follows:
    ``(c) Special Rules for Certain Married Individuals.--
            ``(1) In general.--In the case of an individual to whom 
        this paragraph applies for the taxable year, the limitation of 
        paragraph (1) of subsection (b) shall be equal to the lesser 
        of--
                    ``(A) $2,000, or
                    ``(B) the sum of--
                            ``(i) the compensation includible in such 
                        individual's gross income for the taxable year, 
                        plus
                            ``(ii) the compensation includible in the 
                        gross income of such individual's spouse for 
                        the taxable year reduced by the amount 
                        allowable as a deduction under subsection (a) 
                        to such spouse for such taxable year.
            ``(2) Individuals to whom paragraph (1) applies.--Paragraph 
        (1) shall apply to any individual if--
                    ``(A) such individual files a joint return for the 
                taxable year, and
                    ``(B) the amount of compensation (if any) 
                includible in such individual's gross income for the 
                taxable year is less than the compensation includible 
                in the gross income of such individual's spouse for the 
                taxable year.''
    (b) IRA Allowed for Spouses Who Are Not Active Plan Participants.--
Section 219(g)(1) of the Internal Revenue Code of 1986 is amended by 
striking ``or the individual's spouse''.
    (c) Conforming Amendments.--
            (1) Paragraph (2) of section 219(f) of the Internal Revenue 
        Code of 1986 (relating to other definitions and special rules) 
        is amended by striking ``subsections (b) and (c)'' and 
        inserting ``subsection (b)''.
            (2) Section 408(d)(5) of such Code is amended by striking 
        ``$2,250'' and inserting ``$2,000''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1994.
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