[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9813 Introduced in House (IH)]
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119th CONGRESS
2d Session
H. R. 9813
To amend the Internal Revenue Code of 1986 to impose limitations on
high-income taxpayers with large retirement account balances.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 21, 2026
Mr. Neal 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 impose limitations on
high-income taxpayers with large retirement account balances.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. CONTRIBUTION LIMIT FOR INDIVIDUAL RETIREMENT PLANS OF HIGH-
INCOME TAXPAYERS WITH LARGE ACCOUNT BALANCES.
(a) Contribution Limit.--
(1) In general.--Subpart A of part I of subchapter D of
chapter 1 of the Internal Revenue Code of 1986 is amended by
adding at the end the following:
``SEC. 409B. CONTRIBUTION LIMIT ON INDIVIDUAL RETIREMENT PLANS OF HIGH-
INCOME TAXPAYERS WITH LARGE ACCOUNT BALANCES.
``(a) General Rule.--Notwithstanding any other provision of this
title, in the case of an individual who is an applicable taxpayer for
any taxable year, no applicable annual contributions for such taxable
year shall be made by, or on behalf of, such individual to any
individual retirement plan to the extent such applicable annual
contributions exceed the excess (if any) of--
``(1) the applicable dollar amount for such taxable year,
over
``(2) the aggregate vested balances to the credit of the
individual (whether as a participant, owner, or beneficiary) in
all applicable retirement plans (determined as of the close of
the calendar year preceding the calendar year in which such
taxable year begins).
``(b) Definitions and Special Rules.--For purposes of this
section--
``(1) Applicable annual contribution.--
``(A) In general.--Except as provided in this
paragraph, the term `applicable annual contribution'
means any contribution to an individual retirement
plan.
``(B) Contributions to sep and simple plans.--In
the case of any employer or employee contributions by,
or on behalf of, an individual to a simplified employee
pension under section 408(k) or a simple retirement
account under section 408(p)--
``(i) such contributions shall not be
treated as applicable annual contributions for
purposes of applying the limitation under
subsection (a), but
``(ii) the excess described in subsection
(a) shall be reduced by the amount of such
contributions in applying such limitation to
other applicable annual contributions with
respect to such individual.
``(C) Rollover contributions disregarded.--A
rollover contribution under section 402(c), 403(a)(4),
403(b)(8), 408(d)(3), 457(e)(16), or 529(c)(3)(E) shall
not be treated as an applicable annual contribution.
``(D) Accounts acquired by death or divorce or
separation.--The acquisition of an individual
retirement plan (or the transfer to or contribution of
amounts to an individual retirement plan) by reason
of--
``(i) the death of another individual, or
``(ii) divorce or separation (pursuant to
section 408(d)(6)),
shall not be treated as an applicable annual
contribution.
``(2) Applicable dollar amount.--The term `applicable
dollar amount' means $10,000,000.
``(3) Applicable retirement plan.--The term `applicable
retirement plan' means--
``(A) a defined contribution plan to which section
401(a) or 403(a) applies,
``(B) an annuity contract under section 403(b),
``(C) an eligible deferred compensation plan
described in section 457(b) which is maintained by an
eligible employer described in section 457(e)(1)(A), or
``(D) an individual retirement plan.
``(4) Applicable taxpayer.--
``(A) In general.--The term `applicable taxpayer'
means, with respect to any taxable year, a taxpayer
whose modified adjusted gross income for the preceding
taxable year exceeds the amount determined under
subparagraph (B).
``(B) Dollar limit.--The amount determined under
this subparagraph for any taxable year is--
``(i) $225,000 for a married individual not
filing a joint return,
``(ii) $425,000 in the case of an
individual who is a head of household (as
defined in section 2(b)),
``(iii) $450,000 in the case of an
individual who is a married individual filing a
joint return or a surviving spouse (as defined
in section 2(a)), and
``(iv) $400,000 in any other case.
``(C) Modified adjusted gross income.--For purposes
of this paragraph, the term `modified adjusted gross
income' means adjusted gross income determined without
regard to sections 911, 931, and 933, without regard to
any deduction for applicable annual contributions to
individual retirement plans to which subsection (a)
applies, and without regard to any increase in minimum
required distributions by reason of section 4974(f).
``(5) Adjustments for inflation.--
``(A) In general.--In the case of any taxable year
beginning after 2027, each of the dollar amounts in
paragraphs (2) and (4)(B) shall be increased by an
amount equal to the product of--
``(i) such dollar amount, and
``(ii) the cost-of-living adjustment under
section 1(f)(3) for the calendar year in which
such taxable year begins, determined by
substituting `calendar year 2026' for `calendar
year 2016' in subparagraph (A)(ii) thereof.
``(B) Rounding.--If any amount as adjusted under
subparagraph (A) is not--
``(i) in the case of the dollar amount
under paragraph (2), a multiple of $250,000,
such amount shall be rounded to the next lowest
multiple of $250,000, and
``(ii) in the case of a dollar amount under
paragraph (4)(B), a multiple of $1,000, such
amount shall be rounded to the next lowest
multiple of $1,000.
``(c) Regulations.--The Secretary shall prescribe such regulations
and guidance as are necessary or appropriate to carry out the purposes
of this section, including regulations or guidance that provide for the
application of this section and section 4974(f) in the case of plans
with a valuation date other than the last day of a calendar year.''.
(2) Conforming amendments.--
(A) The table of contents for subpart A of part I
of subchapter D of chapter 1 of such Code is amended by
adding after the item relating to section 409A the
following new item:
``Sec. 409B. Contribution limit on individual retirement plans of high-
income taxpayers with large account
balances.''.
(B) Section 408(r) of such Code is amended by
adding at the end the following new paragraph:
``(3) For additional limitations on contributions to
individual retirement plans with large account balances, see
section 409B.''.
(b) Excise Tax on Excess Applicable Annual Contributions.--
(1) In general.--Section 4973 of the Internal Revenue Code
of 1986 is amended by adding at the end the following new
subsection:
``(i) Special Rule for Individual Retirement Plans With Excess
Applicable Annual Contributions.--For purposes of this section, in the
case of individual retirement plans, the excess contributions otherwise
determined under this section with respect to any taxable year shall be
increased by the sum of--
``(1) the excess of the applicable annual contributions
(within the meaning of section 409B(b)(1)) to such plans over
the limitation under section 409B(a) for such taxable year,
reduced by the amount of any excess contributions determined
under subsections (b) and (f), and
``(2) the lesser of--
``(A) the amount determined under this subsection
for the preceding taxable year with respect to such
plans, reduced by the aggregate distributions from such
plans for the taxable year (including distributions
required under section 4974(f)) to the extent not
contributed in a rollover contribution to another
eligible retirement plan in accordance with section
402(c), 403(a)(4), 403(b)(8), 408(d)(3), and
457(e)(16), or
``(B) the amount (if any) by which the amount
determined under section 409B(a)(2) for the taxable
year exceeds the applicable dollar amount under section
409B(b)(2) for the taxable year.''.
(2) Conforming amendments.--Subsections (b) and (f) of
section 4973 of such Code are each amended by inserting ``,
except as further provided in subsection (i)'' after ``For
purposes of this section''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2026.
SEC. 2. INCREASE IN MINIMUM REQUIRED DISTRIBUTIONS FOR HIGH-INCOME
TAXPAYERS WITH LARGE RETIREMENT ACCOUNT BALANCES.
(a) In General.--Section 4974 of the Internal Revenue Code of 1986
is amended by adding at the end the following new subsection:
``(f) Increase in Minimum Required Distributions for High-income
Taxpayers With Large Aggregate Account Balances.--
``(1) In general.--If this subsection applies to a payee
who is an applicable taxpayer (as defined in section
409B(b)(4)) for a taxable year--
``(A) all applicable retirement plans (other than
individual retirement accounts) of the payee taken into
account in computing the excess described in paragraph
(3)(A) shall be treated as 1 plan solely for purposes
of applying this section to the increase in minimum
required distributions for such taxable year determined
under subparagraph (B), and
``(B) the minimum required distributions under this
section for all plans treated as 1 plan under
subparagraph (A) with respect to such payee for such
taxable year shall be increased by the excess (if any)
of--
``(i) the sum of--
``(I) if paragraph (2) applies to
such taxable year, the applicable Roth
excess amount, plus
``(II) 50 percent of the excess
determined under paragraph (3)(A),
reduced by the applicable Roth excess
amount, over
``(ii) the sum of the minimum required
distributions (determined without regard to
this subsection) for all such plans.
``(2) Applicable roth excess amount.--
``(A) Application.--For purposes of paragraph
(1)(B)(i), this paragraph applies to a taxable year of
a payee if the aggregate vested balances to the credit
of the payee (whether as a participant, owner, or
beneficiary) in all applicable retirement plans
(determined as of the close of the calendar year
preceding the calendar year in which the taxable year
begins) exceed 200 percent of the applicable dollar
amount for the calendar year in which the taxable year
begins.
``(B) Applicable roth excess amount.--The
applicable Roth excess amount for any taxable year to
which this paragraph applies is an amount equal to the
lesser of--
``(i) the excess determined under
subparagraph (A), or
``(ii) the aggregate balances to the credit
of the payee (whether as a participant, owner,
or beneficiary) in all Roth IRAs and designated
Roth accounts (within the meaning of section
402A) as of the close of the calendar year
preceding the calendar year in which the
taxable year begins.
``(3) Application.--This subsection shall apply to a payee
for a taxable year--
``(A) if the aggregate vested balances to the
credit of the payee (whether as a participant, owner,
or beneficiary) in all applicable retirement plans
(determined as of the close of the calendar year
preceding the calendar year in which the taxable year
begins) exceed the applicable dollar amount for the
calendar year in which the taxable year begins, and
``(B) without regard to whether amounts with
respect to the payee are otherwise required to be
distributed under section 401(a)(9), 403(b)(10),
408(a)(6), 408(b)(3), or 457(d)(2).
``(4) Coordination and allocation.--
``(A) Minimum distribution requirements.--If this
subsection applies to a payee for any taxable year--
``(i) this section shall apply first to
minimum required distributions determined
without regard to this subsection and then to
any increase in minimum required distributions
by reason of this subsection, and
``(ii) nothing in this subsection shall be
construed to affect the amount of any minimum
required distribution determined without regard
to this subsection or the plan or plans from
which it is required to be distributed.
``(B) Allocation of increase in minimum required
distributions.--
``(i) In general.--Except as provided in
clauses (ii) and (iii), the taxpayer may, in
such form and manner as the Secretary may
prescribe, allocate any increase in minimum
required distributions by reason of this
subsection to applicable retirement plans
treated as 1 plan under subparagraph (A) in
such manner as the taxpayer chooses.
``(ii) Allocation to roth iras and
accounts.--In the case of a taxable year to
which paragraph (2) applies, the portion of any
increase in minimum required distributions by
reason of this subsection equal to the
applicable Roth excess amount shall be
allocated first to Roth IRAs and then to
designated Roth accounts (within the meaning of
section 402A) of the payee.
``(iii) Special rules for employee stock
ownership plans.--
``(I) In general.--In the case of a
payee to which this subsection applies
for any taxable year who has account
balances in 1 or more employee stock
ownership plans (as defined in section
4975(e)(7)) any portion of which is
invested in employer securities which
are not readily tradable on an
established securities market, the
increase in minimum required
distributions by reason of this
subsection shall not be allocated to
any such portion.
``(II) Exception for amounts
attributable to rollover.--Subclause
(I) shall not apply to so much of any
account balance as is attributable to a
rollover contribution after the date of
the enactment of this subsection to the
account in accordance with section
402(c), 403(a)(4), 403(b)(8),
408(d)(3), or 457(e)(16).
``(5) Distributions not eligible for rollovers.--For
purposes of determining whether a distribution is an eligible
rollover distribution, any distribution from an applicable
retirement plan which is attributable to any increase in
minimum required distributions by reason of this subsection
shall be treated as a distribution required under section
401(a)(9), 403(b)(10), 408(a)(6), 408(b)(3), or 457(d)(2),
whichever is applicable.
``(6) Roth distributions treated as qualified
distributions.--In the case of any distribution from a Roth
IRA, or designated Roth account (within the meaning of section
402A), of the payee by reason of the allocation of an increase
in minimum required distributions under this subsection, such
distribution shall be treated as a qualified distribution under
section 408A(d)(2) or 402A(d)(2), as the case may be.
``(7) Definitions.--For purposes of this subsection, any
term used in this subsection which is also used in section 409B
shall have the same meaning as when such term is used in such
section.''.
(b) Special Rules.--
(1) Distribution rights.--
(A) Qualified trusts.--
(i) In general.--Section 401(a) of the
Internal Revenue Code of 1986 is amended by
inserting after paragraph (39) the following
new paragraph:
``(40) Immediate distribution right.--A trust forming part
of a defined contribution plan shall not constitute a qualified
trust under this section unless an employee who certifies to
the plan that the employee is a taxpayer who is subject to the
distribution requirements of section 4974(f) may elect to
receive a distribution from the employee's account balance
under the plan in such amount as the employee may elect,
including any amounts attributable to a qualified cash or
deferred arrangement (as defined in subsection (k)(2)). The
preceding sentence shall not apply in the case of any portion
of an account balance to which section 4974(f)(4)(B)(iii)(I)
applies.''.
(ii) Application to employee's annuities.--
Section 404(a)(2) of such Code is amended by
striking ``and (37)'' and inserting ``(37), and
(40)''.
(B) Annuity contracts.--
(i) Custodial accounts.--Section
403(b)(7)(A) of such Code is amended by adding
at the end the following new flush sentence:
``Notwithstanding clause (i), the custodial account
shall permit an employee who certifies that the
employee is a taxpayer who is subject to the
distribution requirements of section 4974(f) to elect
to receive a distribution from the employee's custodial
account in such amount as the employee may elect.''.
(ii) Annuity contracts.--Section 403(b)(11)
of such Code is amended by adding at the end
the following new sentence: ``Notwithstanding
subparagraphs (A), (B), (C), and (D), the
annuity contract shall permit an employee who
certifies that the employee is a taxpayer who
is subject to the distribution requirements of
section 4974(f) to elect to receive a
distribution of contributions made pursuant to
a salary reduction agreement (within the
meaning of section 402(g)(3)) from the
employee's annuity contract in such amount as
the employee may elect.''.
(C) Governmental plans.--Section 457(d)(1) of such
Code is amended by adding at the end the following new
flush sentence:
``Notwithstanding subparagraph (A), an eligible deferred
compensation plan of an employer described in subsection
(e)(1)(A) shall permit a participant or beneficiary who
certifies that the participant or beneficiary is a taxpayer who
is subject to the distribution requirements of section 4974(f)
to elect to receive a distribution from the plan in such amount
as the participant or beneficiary may elect.''.
(2) Exception from 10 percent additional tax on early
distributions.--Section 72(t)(2) of such Code is amended by
adding at the end the following new subparagraph:
``(O) Distributions of excess balances.--
Distributions from an applicable retirement plan
(within the meaning of section 409B)) to the extent
such distributions for the taxable year do not exceed
the amount required to be distributed from such plan
under section 4974(f).''.
(3) Withholding.--Section 3405(b) of such Code is amended
by adding at the end the following new paragraph:
``(3) Additional withholding for required distributions
from high balance retirement accounts.--
``(A) In general.--For purposes of this section, a
distribution pursuant to section 401(a)(40), the last
sentence of section 403(b)(7)(A), the last sentence of
section 403(b)(11), or the last sentence of section
457(d)(1) shall be treated as a nonperiodic
distribution, except that in applying this subsection
to such distribution--
``(i) paragraph (1) shall be applied by
substituting `37 percent' for `10 percent', and
``(ii) no election may be made under
paragraph (2) with respect to such
distribution.
``(B) Exception.--Subparagraph (A) shall not apply
to any qualified distribution from a designated Roth
account (within the meaning of section 402A).''.
(c) Conforming Amendment.--Section 4974(b) of the Internal Revenue
Code of 1986 is amended by striking ``section 401(a)(9)'' and inserting
``subsection (f) or section 401(a)(9)''.
(d) Effective Dates.--
(1) In general.--The amendments made by subsection (a)
shall apply to taxable years beginning after December 31, 2033.
(2) Plan requirements.--The amendments made by subsection
(b) shall apply to plan years beginning after December 31,
2033.
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