I 111th CONGRESS 2d Session H. R. 5031 IN THE HOUSE OF REPRESENTATIVES April 15, 2010 Mrs. Capito 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 a credit against tax for individuals age 18 through 30 for certain retirement contributions.

1.

Short title

This Act may be cited as the Young Savers’ Tax Credit Act of 2010.

2.

Young saver’s credit

(a)

In general

Section 25B of the Internal Revenue Code of 1986 (relating to elective deferrals and IRA contributions by certain individuals) is amended by adding at the end the following new subsection: (h)

Young Saver’s Credit

(1)

In general

In the case of a qualified young saver, the credit determined under subsection (a) shall be an amount equal to so much of the qualified retirement savings contributions of such individual for the taxable year as does not exceed $500. (2)

Qualified young saver

For purposes of this subsection, the term qualified young saver means any eligible individual— (A)who elects the application of this subsection for the taxable year, (B)who has not attained the age of 31 before the end of the taxable year, and (C)whose aggregate qualified retirement savings contributions for the taxable year are not less than an amount equal to 1 percent of the compensation includible in the individual’s gross income for such taxable year. (3)

Limitation based on modified adjusted gross income

(A)

In general

The credit which would (but for this paragraph) be determined under subsection (h) for the taxable year shall be reduced (but not below zero) by the amount determined under subparagraph (B). (B)

Amount of reduction

The amount determined under this paragraph is the amount which bears the same ratio to the amount which would be so taken into account as— (i)the excess of— (I)the taxpayer’s adjusted gross income for such taxable year, over (II)$50,000 ($100,000 in the case of a joint return), bears to (ii)$20,000 ($40,000 in the case of a joint return). (4)

Inflation adjustment

(A)

In general

In the case of a taxable year beginning after 2010, each of the dollar amounts in paragraph (3) 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 2009 for calendar year 1992 in subparagraph (B) thereof. (B)

Rounding

If any amount as adjusted under subparagraph (A) is not a multiple of $500, such amount shall be rounded to the next lowest multiple of $500. . (b)

Effective date

The amendment made by this section shall apply to taxable years beginning after December 31, 2009.