1.This Act may be cited as the
Securing Tomorrow by Saving Today Act
of 2009
.
2.Exemption of
certain interest income from tax
(a)Part III of subchapter B of chapter 1 of the Internal
Revenue Code of 1986 (relating to amounts specifically excluded from gross
income) is amended by inserting after section 115 the following new
section:
116.Partial
exclusion of interest received by individuals
(a)Exclusion From
Gross IncomeGross income does not include interest otherwise
includible in gross income which is received during the taxable year by an
individual.
(b)
(1)The aggregate amount excluded under subsection (a) for any
taxable year shall not exceed—
(A)in the case of any
taxable year beginning in 2009, $500 ($1,000 in the case of a joint return),
and
(B)in the case of
taxable years beginning after 2009—
(i)in
the case of a joint return, 200 percent of the dollar amount in effect under
clause (ii) for the taxable year, and
(ii)in any other
case, $550.
(2)In the case of any taxable year beginning after 2010,
the $550 amount contained in paragraph (1)(B)(ii) shall be increased by an
amount equal to—
(A)such dollar
amount, multiplied by
(B)the cost-of-living
adjustment determined under section 1(f)(3) for such calendar year by
substituting calendar year 2009
for calendar year
1992
in subparagraph (B) thereof.
If any
increase under the preceding sentence is not a multiple of $10, such increase
shall be rounded to the nearest multiple of $10.(c)For
purposes of this section, the term interest means—
(1)interest on
deposits with a bank (as defined in section 581),
(2)amounts (whether
or not designated as interest) paid in respect of deposits, investment
certificates, or withdrawable or repurchasable shares, by—
(A)a mutual savings
bank, cooperative bank, domestic building and loan association, industrial loan
association or bank, or credit union, or
(B)any other savings
or thrift institution which is chartered and supervised under Federal or State
law,
the
deposits or accounts in which are insured under Federal or State law or which
are protected and guaranteed under State law.(d)Certain
Nonresident Aliens Ineligible for ExclusionFor purposes of this
section, in the case of a nonresident alien individual, subsection (a) shall
apply only in determining the taxes imposed for the taxable year pursuant to
sections 871(b)(1) and
877(b).
.
(b)
(1)Subparagraph (A)
of section 32(i)(2) of such Code is amended by inserting (determined
without regard to section 116)
before the comma.
(2)Subparagraph (B)
of section 86(b)(2) of such Code is amended to read as follows:
(B)increased by the
sum of—
(i)the amount of
interest received or accrued by the taxpayer during the taxable year which is
exempt from tax, and
(ii)the amount of
interest received during the taxable year which is excluded from gross income
under section
116.
.
(3)Subsection (d) of
section 135 of such Code is amended by redesignating paragraph (4) as paragraph
(5) and by inserting after paragraph (3) the following new paragraph:
(4)Coordination
with section 116This section shall be applied before section
116.
.
(4)Paragraph (2) of
section 265(a) of such Code is amended by inserting before the period ,
or to purchase or carry obligations or shares, or to make deposits, to the
extent the interest thereon is excludable from gross income under section
116
.
(5)Subsection (c) of
section 584 of such Code is amended by adding at the end the following new
flush sentence:
The
proportionate share of each participant in the amount of interest received by
the common trust fund and to which section 116 applies shall be considered for
purposes of such section as having been received by such
participant..
(6)Subsection (a) of
section 643 of such Code is amended by redesignating paragraph (7) as paragraph
(8) and by inserting after paragraph (6) the following new paragraph:
(7)There
shall be included the amount of any interest excluded from gross income
pursuant to section
116.
.
(7)The table of
sections for part III of subchapter B of chapter 1 of such Code is amended by
inserting after the item relating to section 115 the following new item:
Sec. 116. Partial exclusion of dividends
and interest received by
individuals.
.
(c)The amendments made by this section shall apply to taxable
years beginning after December 31, 2008.
3.Increase in
dollar limitations on contributions to retirement plans
(a)Permanent
Increase in Dollar Limitation on Deduction for Contributions to Individual
Retirement Plans
(1)Paragraph (5) of section 219(b) of the Internal Revenue
Code of 1986 is amended—
(A)by amending
subparagraph (A) to read as follows:
(A)The deductible amount for any taxable year is the
applicable dollar amount in effect under section 402(g)(1) for such taxable
year.
,
and
(B)by striking
subparagraph (D).
(2)Simple
retirement accountsSubparagraph (E) of section 408(p)(2) of such
Code is amended to read as follows:
(E)For purposes of subparagraph (A)(ii), the
applicable dollar amount for any taxable year is the applicable dollar amount
in effect under section 402(g)(1) for such taxable
year.
.
(b)Temporary
Increase in Contributions to Defined Contribution Plans
(1)Increase in
limitation on elective deferralsParagraph (1) of section 402(g)
of such Code is amended by adding at the end the following new
subparagraph:
(D)Temporary
increase in applicable dollar amountIn the case of taxable years
beginning in calendar year 2009, 2010, or 2011, the applicable dollar amount
determined under subparagraph (B) shall not be less than
$33,000.
.
(2)Increase in
combined employee and employer limitation on contributions to defined
contribution plansParagraph 1 of section 415(c) of such Code is
amended by adding at the end the following new flush sentence:
In the
case of taxable years beginning in calendar year 2009, 2010, or 2011, the
dollar amount in effect under subparagraph (A) shall not be less than
$65,500..
(c)The amendments made by this section shall apply to taxable
years beginning after December 31, 2008.
4.Increase in
permitted catch-up contributions to retirement plans
(a)Temporary
Increase in Permitted Catch-Up Contributions
(1)Paragraph (2) of section 414(v) of such Code is amended
by adding at the end the following new subparagraph:
(E)Temporary
increase in permitted catch-up contributionsIn the case of taxable years beginning in
calendar year 2009, 2010, or 2011, the dollar amount in effect under
subparagraph (A) shall not be less than
$10,000.
.
(2)Individual
retirement plansSubparagraph (B) of section 219(b)(5) of such
Code is amended by adding at the end the following new clause:
(iii)Special rule
for 2009 through 2011In the case of taxable years beginning in
calendar years 2009, 2010, or 2011, the dollar amount in effect under clause
(i) shall not be less than
$10,000.
.
(b)The amendments made by this section shall apply to taxable
years beginning after December 31, 2008.
5.Suspension of
minimum distribution requirements
(a)In the case of an eligible defined contribution plan of
an individual, sections 401(a)(9), 404(a)(2), 403(b)(10), 408(a)(6), 408(b)(3),
and 457(d)(2) of the Internal Revenue Code of 1986 shall not apply with respect
to such individual for any year during the suspension period.
(b)For purposes of this section, the term suspension
period means the period beginning on January 1, 2008, and ending on
December 31, 2012.
(c)Eligible Defined
Contribution PlanFor purposes of this section, the term
eligible defined contribution plan means—
(1)a
defined contribution plan (within the meaning of section 414(i) of such Code)
which is—
(A)an employee’s
trust described in section 401(a) of such Code which is exempt from tax under
section 501(a) of such Code,
(B)an annuity plan
described in section 403(a) of such Code,
(C)an annuity
contract described in section 403(b) of such Code, and
(D)an eligible
deferred compensation plan described in section 457(b) of such Code which is
maintained by an eligible employer described in section 457(e)(1)(A) of such
Code, and
(2)an individual
retirement plan (as defined in section 7701(a)(37) of such Code).
(d)
(1)Required
beginning date during suspension periodThe required beginning
date with respect to any individual under section 401(a)(9) of such Code shall
be determined without regard to this section for purposes of applying sections
401(a)(9), 404(a)(2), 403(b)(10), 408(a)(6), 408(b)(3), and 457(d) of such Code
for calendar years after 2009.
(2)Exception for
5-year ruleIn the case of a distribution required under section
401(a)(9)(B)(ii) of such Code, subsection (a) shall not apply.
(3)Exemption of
distributions during suspension period from trustee transfer and withholding
rulesFor purposes of sections 401(a)(31), 402(f), and 3405 of
such Code, any distribution during the suspension period which, but for
subsection (a), would have been a required distribution under section 401(a)(9)
of such Code shall not be treated as an eligible rollover distribution.
(e)Provisions
Relating to Plan Amendments
(1)If this subsection applies to any plan or annuity
contract, such plan or contract shall be treated as being operated in
accordance with the terms of the plan during the period described in paragraph
(2)(B)(i).
(2)Amendments to
which subsection applies
(A)This subsection shall apply to any amendment to any plan
or annuity contract which is made—
(i)pursuant to this
section or pursuant to any regulation issued by the Secretary of the Treasury
to carry out this section, and
(ii)on
or before the last day of the first plan year beginning on or after January 1,
2009.
(B)This
subsection shall not apply to any amendment unless during the period beginning
on the date such amendment takes effect and ending on December 31, 2009 (or, if
earlier, the date the plan or contract amendment is adopted), the plan or
contract is operated as if such plan or contract amendment were in
effect.
(f)This section shall take
effect on the date of the enactment of this Act.