[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2553 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 2553

To amend the Internal Revenue Code of 1986 to allow certain individuals 
      a credit against income tax for elective deferrals and IRA 
                             contributions.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 19, 1999

   Mr. Pomeroy (for himself, Mr. Frost, Mr. Paul, Ms. Lee, and Mrs. 
 Christensen) 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 certain individuals 
      a credit against income tax for elective deferrals and IRA 
                             contributions.

    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 ``Family Investment Retirement Savings 
Tax (FIRST) Credit Act of 1999''.

SEC. 2. CREDIT TO CERTAIN INDIVIDUALS FOR ELECTIVE DEFERRALS AND IRA 
              CONTRIBUTIONS.

    (a) In General.--Subpart A of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to nonrefundable 
personal credits) is amended by inserting after section 25A the 
following new section:

``SEC. 25B. ELECTIVE DEFERRALS AND IRA CONTRIBUTIONS BY CERTAIN 
              INDIVIDUALS.

    ``(a) Allowance of Credit.--In the case of an individual, there 
shall be allowed as a credit against the tax imposed by this chapter 
for the taxable year an amount equal to 50 percent of--
            ``(1) the amount allowed as a deduction under section 219 
        for such taxable year, and
            ``(2) the amount of the elective deferrals (as defined in 
        section 402(g)(3)) for such taxable year.
    ``(b) Maximum Credit.--The credit allowed by subsection (a) for any 
taxable year shall not exceed $1,000 with respect to each individual.
    ``(c) Limitation Based on Adjusted Gross Income.--
            ``(1) In general.--The amount of the credit which would 
        (but for this subsection) be allowed under subsection (a) for 
        the taxable year shall be reduced (but not below zero) by an 
        amount which bears the same ratio to such amount of credit as--
                    ``(A) the excess of--
                            ``(i) the taxpayer's adjusted gross income 
                        for such taxable year, over
                            ``(ii) the applicable dollar amount, bears 
                        to
                    ``(B) $10,000.
            ``(2) Rounding.--Any amount determined under this 
        subsection which is not a multiple of $10 shall be rounded to 
        the next lowest $10.
            ``(3) Applicable dollar amount.--For purposes of this 
        subsection, the term `applicable dollar amount' means--
                    ``(A) in the case of a taxpayer filing a joint 
                return, $51,000,
                    ``(B) in the case of any other taxpayer (other than 
                a married individual filing a separate return), 
                $31,000, and
                    ``(C) in the case of a married individual filing a 
                separate return, zero.
        A husband and wife who file separate returns for any taxable 
        year and live apart at all times during such taxable year shall 
        not be treated as married individuals for purposes of this 
        paragraph.
    ``(d) Special Rules.--
            ``(1) Coordination with deduction and exclusion.--Nothing 
        in this section shall be construed to deny any deduction or 
        exclusion otherwise allowable for any amount taken into account 
        under subsection (a).
            ``(2) Anti-churning rule.--
                    ``(A) In general.--If any amount--
                            ``(i) is paid into an individual retirement 
                        plan or defined contribution plan of the 
                        taxpayer or the taxpayer's spouse, and
                            ``(ii) is taken into account in determining 
                        the amount of credit allowed under this 
                        section,
                then, with respect to distributions from any such plan 
                during the increased penalty period, paragraph (1) of 
                section 72(t) shall be applied by substituting `60 
                percent' for `10 percent' and subparagraphs (B), (D), 
                (E), and (F) of section 72(t)(2) shall not apply.
                    ``(B) Exceptions.--
                            ``(i) In general.--Subparagraph (A) shall 
                        not apply to any distribution during the 
                        increased penalty period to the extent that 
                        such distribution, when increased by prior 
                        distributions from the plans referred to in 
                        subparagraph (A) during such period, exceed the 
                        aggregate amount paid into such plans which was 
                        taken into account in determining the amount of 
                        credit allowed under this section.
                            ``(ii) Hardship distributions.--
                        Subparagraph (A) shall not apply to 
                        distribution upon the hardship of the 
                        beneficiary.
                    ``(C) Aggregate of plans.--For purposes of this 
                paragraph, all individual retirement plans and defined 
                contribution plans of an individual and the spouse of 
                such individual shall be treated as 1 plan.
                    ``(D) Increased penalty period.--For purposes of 
                subparagraph (A), the increased penalty period is the 
                5-taxable year period beginning with the first taxable 
                year for which any amount is described in clauses (i) 
                and (ii) of subparagraph (A).
    ``(e) Election Not To Claim Credit.--This section (other than 
subsection (d)(2)) shall not apply to any taxable year if the 
individual elects not to have this section apply.''.
    (b) Clerical Amendment.--The table of sections for such subpart A 
is amended by inserting after the item relating to section 25A the 
following new item:

                              ``Sec. 25B. Elective deferrals and IRA 
                                        contributions by certain 
                                        individuals.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
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