Private Pensions Act

Summary

Private Pensions Act - Allows as a tax deduction amounts paid during the taxable year by an individual to the following retirement savings plans (provided they meet the requirements of the Internal Revenue Code): (1) a qualified individual retirement account; (2) an employees' trust; (3) an annuity contract; or (4) a qualified bond purchase plan. Provides that the amount allowed as a deduction shall not exceed 20 percent of so much of the taxpayers earned income for such taxable year as does not exceed $7,500, and reduces the amount allowed as a deduction by the amount of any contributions made on behalf of the taxpayer by his employer. Provides that any contributions made on behalf of the taxpayer by his employer may, at the option of the taxpayer, be considered to be 7 percent of his earned income for such taxable year attributable to the performance of personal services for such employer. Directs that the limitations provided for in this Act shall be determined without regard, in the case of a married individual, to the earned income of his spouse or contributions made on behalf of his spouse. Establishes specific requirements for a trust, custodial account, or other similar arrangement organized in the United States to qualify as an individual retirement account under this Act. Provides that the amount actuallly distributed or made available to any beneficiary by a qualified retirement account shall be taxable to him, except if within 60 days after the day on which such amount is distributed or made available such amount is contributed to a qualified individual account for the benefit of such individual or such individual and his spouse. Provides that if premature distributions are made from a qualified retirement account (before he or his spouse reaches age 59 1/2) and if such distributions are not recontributed to the account as described in the preceding paragraph, there shall be imposed an additional tax for such taxable year equal to 30 percent of such distribution. Imposes a yearly exise tax equal to 10 percent of the excessive accumulation (as defined in this Act) of a qualified individual retirement account. Provides that the tax imposed by this section shall not apply for any taxable year prior to the taxable year in which any individual who contributed to the plan attains the age of 70 1/2 years.

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1 official file

• Introduced in House

  summary · EN · 3 January 1973

  Open at official source

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