,i  #aacth ,,congress  #ast ,session    
,h4 ,r4 #biag  ,,in ,,the ,,house ,,of  
,,representatives  ,august #a1 #bjac    
,mr4 ,serrano 7for himself1 ,mr4        
,hinojosa1 ,mr4 ,doggett1 ,mr4 ,conyers1
 ,mr4 ,richmond1 ,mrs4 ,carolyn ,b4     
,maloney of ,new ,york1 ,ms4 ,meng1 ,mr4
 ,pierluisi1 ,ms4 ,roybal-,allard1 ,ms4 
,velzquez1 ,mr4 ,gutirrez1 ,mr4         
,cartwright1 ,mr4 ,honda1 ,ms4          
,mc,collum1 ,mr4 ,sires1 ,mr4 ,grijalva1
 ,mr4 ,vargas1 ,mr4 ,nolan1 ,mr4 ,castro
 of ,texas1 ,mr4 ,johnson of ,georgia1  
and ,mr4 ,jeffries7 introduced the      
following bill2 which was referred to   
the ,committee on ,ways and ,means  ,a  
,,bill  ,to promote savings by providing
 a tax credit for eligible taxpayers who
 contribute to savings products and to  
facilitate taxpayers receiving this     
credit and open a designated savings    
product when they file their ,federal   
income tax returns4  #a4 ,short title   
,this ,act may be cited as the          
,financial ,security ,credit ,act of    

#bjac4  #b4 ,findings ,congress finds   
the following3  7#a7 ,the personal      
savings rate reached historic lows in   
the past decade1 and a lack of personal 
savings was a major contributor to the  
depth and severity of the recession of  
#bjjg-bjji4  7#b7 ,households continue  
to lack the savings or structures to    
meet short-term and long-term needs1 as 
evidenced by the following3  7,a7       
,according to the ,employee ,benefit    
,research ,institute1 among full-time1  
full-year wage and salary workers ages  
#ba-fd1 only #ed4e per cent participated
 in a retirement plan in #bjaj4  7,b7   
,according to the ,federal ,deposit     
,insurance ,corporation's #bjaa ,survey 
of ,unbanked and ,underbanked           
,households1 an estimated #h4b percent  
of ,united ,states households1          
approximately #aj million households1   
are unbanked4 ,these households do not  
have a checking or savings account4 ,in 
total1 #bi4c percent of households do   
not have a savings account4  7,c7 ,more 

than #a in #d ,american households lives
 in asset poverty1 meaning they lack the
 savings or other assets to cover basic 
expenses 7equivalent to what could be   
purchased with a poverty level income7  
for three months if a layoff or other   
emergency leads to loss of income4 ,if  
assets that cannot easily be converted  
to cash1 are excluded1 such as a home or
 a business1 as many as #d in #aj       
households live in liquid asset poverty1
 meaning they lack the cash savings to  
survive three months at the poverty     
line4  7#c7 ,savings make families more 
resilient to financial shocks and more  
upwardly mobile1 as evidenced by the    
following3  7,a7 ,even small sums of    
savings1 #b1jjj or less1 have been shown
 to significantly reduce the incidence  
of negative financial or material       
outcomes1 such as foregoing adequate    
nutrition4  7,b7 ,children born to      
low-income1 high saving parents are much
 more likely 7#ga percent7 to move up   
the economic ladder than children born  

to low-income1 low-saving parents 7#ej  
percent7 over a generation4  7#d7       
,successful pilot programs have been run
 in cities as diverse as ,houston1      
,texas2 ,newark1 ,new ,jersey2 ,new     
,york ,city1 ,new ,york2 ,san ,antonio1 
,texas2 and ,tulsa1 ,oklahoma4 ,these   
programs1 run through ,volunteer ,income
 ,tax ,assistance sites serving only a  
fraction of potentially eligible tax    
filers in each city1 have shown that tax
 filers with low incomes can and will   
save when presented with the right      
incentive at the right moment4  7#e7 ,it
 is in the economic interests of the    
,united ,states to promote savings among
 all members of society1 regardless of  
income4  #c4 ,financial security credit 
7a7 ,in general ,subpart ,c of part ,,iv
 of subchapter ,a of chapter #a of the  
,internal ,revenue ,code of #aihf is    
amended by inserting after section      
#cf;,c the following new section3       
#cf;,d4 ,financial security credit  7a7 
,allowance of credit ,there shall be    

allowed as a credit against the tax     
imposed by this subtitle for a taxable  
year an amount equal to the lesser of-- 
7#a7 #ejj1 or  7#b7 #ej percent of the  
total amount deposited or contributed by
 the taxpayer in accordance with        
subsection 7b77#a7 into designated      
savings products during such taxable    
year4  7b7 ,limitations  7#a7 ,credit   
must be deposited in or contributed to  
designated savings product ,no amount   
shall be allowed as a credit under      
subsection 7a7 for a taxable year unless
 the taxpayer designates on the         
taxpayer's return of tax for the taxable
 year that the amount of the credit for 
such taxable year be deposited in or    
contributed to one or more designated   
savings products of the taxpayer and the
 ,secretary makes such deposits or      
contributions to the designated savings 
products4  7#b7 ,limitation based on    
adjusted gross income  7,a7 ,in general 
,the amount of the credit allowable     
under subsection 7a7 shall be reduced   

7but not below zero7 by an amount which 
bears the same ratio to the amount of   
such credit 7determined without regard  
to this paragraph7 as--  7i7 the amount 
by which the taxpayer's adjusted gross  
income exceeds the threshold amount1    
bears to  7ii7 #ae1jjj4  7,b7 ,threshold
 amount ,for purposes of subparagraph   
7,a71 the term threshold amount means-- 
7i7 #ee1ejj in the case of a joint      
return1  7ii7 #da1fbe in the case of an 
individual who is not married1 and      
7iii7 #ej percent of the dollar amount  
in effect under clause 7i7 in the case  
of a married individual filing a        
separate return4  ,for purposes of this 
subparagraph1 marital status shall be   
determined under section #ggjc4  7c7    
,designated savings product ,for        
purposes of this section1 the term      
designated savings product means any of 
the following3  7#a7 ,a qualified       
retirement plan 7as defined in section  
#digd7;c774  7#b7 ,a qualified tuition  
program 7as defined in section #ebi74   

7#c7 ,a ,coverdell education savings    
account 7as defined in section #ecj74   
7#d7 ,a ,united ,states savings bond4   
7#e7 ,a certificate of deposit 7or      
similar class of deposit7 with a        
duration of at least #h months4  7#f7 ,a
 savings account4  7#g7 ,any other type 
of savings product considered to be     
appropriate by the ,secretary for the   
purposes of this section4  7d7 ,special 
rules  7#a7 ,tax refunds treated as     
deposited or contributed in current     
taxable year ,for purposes of subsection
 7a77#b71 the amount of any overpayment 
of taxes refunded to the taxpayer       
7reduced by any amount attributable to  
the credit allowed under this section by
 reason of being considered as an       
overpayment by section #fdja7;b77 and   
designated for deposit in or            
contribution to a designated savings    
product of the taxpayer shall be treated
 as an amount deposited or contributed  
in the taxable year in which so         
deposited or contributed4  7#b7         

,maintenance of deposit ,no contribution
 or deposit shall be taken into account 
under subsection 7a7 unless such        
contribution or deposit remains in the  
designated savings product for not less 
than #h continuous months4  7#c7        
,reduction in deposits in designated    
savings products  7,a7 ,in general ,the 
amount of deposits or contributions     
taken into account under subsection 7a7 
shall be reduced 7but not below zero7 by
 the aggregate amount of distributions  
7other than interest from designated    
savings products specified in paragraphs
 7#d71 7#e71 7#f71 and 7#g7 of          
subsection 7c77 from all designated     
savings products of the taxpayer during 
the testing period4 ,the preceding      
sentence shall not apply to the portion 
of any distribution which is not        
includible in gross income by reason of 
a trustee-to-trustee transfer or a      
rollover distribution4  7,b7 ,testing   
period ,for purposes of subparagraph    
7,a71 the testing period1 with respect  

to a taxable year1 is the period which  
includes--  7i7 such taxable year1  7ii7
 the #b preceding taxable years1 and    
7iii7 the period after such taxable year
 and before the due date 7including     
extensions7 for filing the return of tax
 for such taxable year4  7,c7 ,other    
rules ,rules similar to subparagraphs   
7,c7 and 7,d7 of section #be;,b7d77#b7  
shall apply for purposes of this        
paragraph4  7#d7 ,denial of double      
benefit ,no credit shall be allowed     
under section #be;,b with respect to any
 deposit for which a credit is allowed  
under this section4  7#e7 ,coordination 
with other refundable credits ,the      
credit allowed by subsection 7a7 shall  
be taken into account after taking into 
account the credits allowed by 7or      
treated as allowed by7 this subpart     
7other than this section74  7e7         
,inflation adjustments  7#a7 ,credit    
limit ,in the case of any taxable year  
beginning in a calendar year after      
#bjbc1 the dollar amount in subsection  

7a77#a7 shall be increased by an amount 
equal to--  7,a7 such dollar amount1    
multiplied by  7,b7 the cost-of-living  
adjustment determined under section     
#a7;f77#c7 for the calendar year in     
which the taxable year begins1          
determined by substituting calendar year
 #bjab for calendar year #aiib in       
subparagraph 7,b7 thereof4  7#b7 ,,agi  
thresholds ,in the case of any taxable  
year beginning in a calendar year after 
#bjac1 each of the dollar amounts in    
clauses 7i7 and 7ii7 of subsection      
7b77#b77;,b7 shall be increased by an   
amount equal to--  7,a7 such dollar     
amount1 multiplied by  7,b7 the         
cost-of-living adjustment determined    
under section #a7;f77#c7 for the        
calendar year in which the taxable year 
begins1 determined by substituting      
calendar year #bjab for calendar year   
#aiib in subparagraph 7,b7 thereof4     
7#c7 ,rounding  7,a7 ,credit limit ,if  
any increase under paragraph 7#a7 is not
 a multiple of #aj1 such increase shall 

be rounded to the next lowest multiple  
of #aj4  7,b7 ,,agi thresholds ,if any  
increase under paragraph 7#a7 is not a  
multiple of #ajj1 such increase shall be
 rounded to the next lowest multiple of 
#ajj4  7f7 ,regulations ,not later than 
#ab months from date of enactment of    
this section1 the ,secretary shall issue
 such regulations or other guidance as  
the ,secretary determines necessary or  
appropriate to carry out this section1  
including regulations or guidance--     
7#a7 to ensure that designated savings  
products are subject to appropriate     
reporting requirements1 including the   
reporting of contributions and other    
deposits during the calendar year1 end  
of calendar year account balances1 and  
earnings from designated savings        
products specified in paragraphs 7#d71  
7#e71 7#f71 and 7#g7 of subsection 7c71 
7#b7 to carry out the maintenance of    
deposit provisions under subsection     
7d77#b71 and  7#c7 to prevent avoidance 
of the purposes of this subsection4  4  

7b7 ,conforming amendments  7#a7        
,section #acbd7;b77#b7 of title #ca1    
,united ,states ,code1 is amended by    
inserting #cf;,d1 after #cf;,b14  7#b7  
,the table of sections for subpart ,c of
 part ,,iv of subchapter ,a of chapter  
#a of the ,internal ,revenue ,code of   
#aihf is amended by inserting after the 
item relating to section #cf;,c the     
following new item3  ,sec4 #cf;,d4      
,financial security credit4  4  7c7     
,effective date ,the amendments made by 
this section shall apply to taxable     
years beginning after ,december #ca1    
#bjac4  #d4 ,opening of accounts on     
,federal income tax returns to          
facilitate savings  7a7 ,notification of
 option  7#a7 ,in general ,the          
,commissioner of ,internal ,revenue     
shall notify individuals who may qualify
 for a credit under section #cf;,d of   
the ,internal ,revenue ,code of #aihf   
but fail to provide sufficient          
information to allow the ,secretary to  
deposit or contribute the credit amount 

to a designated savings product that    
they have the option of an electronic   
direct deposit and that they may be     
eligible for the financial security     
credit under section #cf;,d of the      
,internal ,revenue ,code of #aihf if    
they deposit a refund or a portion of   
their refund in any designated savings  
product4  7#b7 ,method of notification  
,the notification under paragraph 7#a7  
shall be made through--  7,a7 a public  
awareness program undertaken by the     
,secretary of the ,treasury1 in concert 
with the ,commissioner of the ,internal 
,revenue and others as necessary1       
beginning not later than #f months after
 the date of the enactment of this ,act2
  7,b7 tax return preparers and         
low-income taxpayer clinics2 and  7,c7  
the inclusion of such a notice in the   
instruction material for any ,federal   
income tax return4  7b7 ,establishment  
of designated account program ,the      
,secretary of the ,treasury shall       
develop1 in consultation with the       

,federal ,management ,system1 a program 
to minimize the delivery of             
non-electronic ,federal income tax      
refunds by depositing refunds           
electronically to a safe1 low-cost      
account held by a depository            
institution4 ,this program shall        
include--  7#a7 provisions for such tax 
refunds to be deposited into a          
designated account2  7#b7 establishment 
of account parameters with respect to   
minimum balance requirements1           
limitations on overdrafts1 overdraft    
fees1 other fees1 and additional        
requirements2  7#c7 establishment of    
means for the taxpayer to access the    
account electronically and to have      
timely1 direct access to the funds in   
the account2 and  7#d7 provisions to    
allow taxpayers to open an account with 
their ,federal income tax refunds       
through financial service providers1 so 
long such account is held at a          
depository institution insured under the
 ,federal ,deposit ,insurance ,act or a 

credit union insured under the ,federal 
,credit ,union ,act4  7c7 ,effective    
date ,the notification under subsection 
7a7 and the program under subsection 7b7
 shall be effective with respect to     
,federal income tax returns for taxable 
years beginning after ,december #ca1    
#bjac4