H.R. 1932 (Introduced in House) — To amend the Internal Revenue Code of 1986 to treat as compensation for purposes of retirement contribution limitations any difficulty of care payments excluded from gross income.

1. Treating excluded difficulty of care payments as compensation for determining retirement contribution limitations

(a)

Individual retirement accounts—

(1)

In general— Section 408(o) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

“(5) Special rule for difficulty of care payments excluded from gross income—In the case of an individual who for a taxable year excludes from gross income under section 131 a qualified foster care payment which is a difficulty of care payment, if—

“(A) the deductible amount in effect for the taxable year under subsection (b), exceeds

“(B) the amount of compensation includible in the individual’s gross income for the taxable year,”

(2)

Effective date— The amendments made by this section shall apply to contributions after the date of the enactment of this Act.

(b)

Defined contribution plans— Section 415(c) of such Code is amended by adding at the end the following new paragraph:

“(8) Special rule for difficulty of care payments excluded from gross income

“(A) In general—For purposes of paragraph (1)(B), in the case of an individual who for a taxable year excludes from gross income under section 131 a qualified foster care payment which is a difficulty of care payment, the participant’s compensation, or earned income, as the case may be, shall be increased by the amount so excluded.

“(B) Contributions allocable to difficulty of care payments treated as after-tax—Any contribution by the participant which is allocable to an amount so excluded—

“(i) shall be treated for purposes of this title as investment in the contract, and

“(ii) shall not cause a plan (and any arrangement which is part of such plan) to be treated as failing to meet any requirements of this chapter solely by reason of allowing any such contributions.”

(c)

Effective date— The amendment made by this subsection shall apply to plan years beginning after December 31, 2015.

To amend the Internal Revenue Code of 1986 to treat as compensation for purposes of retirement contribution limitations any difficulty of care payments excluded from gross income.

1. Treating excluded difficulty of care payments as compensation for determining retirement contribution limitations

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Incoming references