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Adds Universal Savings Accounts to the list of account types in subsection (a) and adds a new subsection (i) defining 'excess contributions' for Universal Savings Accounts (cross-referencing section 530A/530U).
Amends the list of arrangements in section 4975(e)(1) by adding a new subparagraph (H) to include a Universal Savings Account (as defined in section 530A) as a covered account for purposes of prohibited transactions.
Amends the list of provisions in paragraph (2) by adding a new subparagraph requiring reports under section 530A(g) (relating to Universal Savings Accounts) to be treated as a provision referenced for report-filing penalties.
Creates a new tax-code account called a “Universal Savings Account” and adds rules for how those accounts work for tax and prohibited-transaction purposes. The law defines how to calculate and treat excess contributions, when contributions are ignored, applies existing tax and prohibited-transaction rules to the new accounts, requires reporting, and makes conforming changes to the Internal Revenue Code.
The change affects individuals who save using these accounts, the financial institutions that will hold and report them, and the IRS (for enforcement and reporting). The section sets an effective date for the new rules but the specific date is not provided in the summary text available here.
Referred to the House Committee on Ways and Means.
Introduced May 5, 2025 by Diana Harshbarger · Last progress May 5, 2025
