,i  #aae? ,,congress  #b;d ,session  ,h4
 ,r4 #gcdi  ,,9 ,,! ,,h\se ,,(          
,,repres5tatives  ,decemb] #ai1         
#bjah,mr4 ,sessions introduc$ ! foll[+  
bill2 :i* 0 ref]r$ to ! ,committee on   
,ways & ,means1 & 9 addition to !       
,committee on ,ov]sight & ,gov]nm5t     
,re=m1 = a p]iod to be subsequ5tly      
det]m9$ by ! ,speak]1 9 ea* case =      
consid]ation ( su* provisions z fall )9 
! jurisdiction ( ! committee conc]n$  ,a
 ,,bill  ,to provide = ea* ,am]ican !   
opportunity to provide = 8 or h]        
retirem5t ?r\gh a ,s4,a4,f4,e4 acc\nt1 &
 = o!r purposes4  #a4 ,%ort title &     
table ( cont5ts  7a7 ,%ort title ,?is   
,act may be cit$ z ! ,sav+s ,acc\nt = ,e
 ,am]ican ,act ( #bjah4  7b7 ,table (   
cont5ts ,! table ( cont5ts is z foll[s3 
,sec4 #a4 ,%ort title & table ( cont5ts4
 ,,title ,i--,p]sonal retirem5t program 
,sec4 #aja4 ,def9itions4 ,sec4 #ajb4    
,s4,a4,f4,e4 acc\nt payroll d$uction    
programs4 ,sec4 #ajc4 ,designation (    
,s4,a4,f4,e4 acc\nts4 ,sec4 #ajd4       

,self-employ$ individuals4 ,sec4 #aje4  
,elective p>ticipation4 ,sec4 #ajf4     
,p5alties4 ,sec4 #ajg4 ,f$]al civilian &
 milit>y p]sonnel4 ,,title              
,,ii--,tax-exempt ,s4,a4,f4,e4 acc\nts  
,sec4 #bja4 ,s4,a4,f4,e4 acc\nts4 ,sec4 
#bjb4 ,effective date4 ,,title          
,,iii--,con=m+ am5dm5ts to ! ,social    
,security ,act & ! ,int]nal ,rev5ue     
,code ( #aihf ,sec4 #cja4 ,r$uctions 9 &
 exemptions f ,,fica taxes & ,,seca     
taxes ) respect to eligible individuals4
 ,sec4 #cjb4 ,exclusion ( eligible      
individuals f old-age1 survivors1 &     
disability insurance cov]age4 ,sec4     
#cjc4 ,in=mation provid$ 9 social       
security acc\nt /atem5ts4  ,i ,p]sonal  
retirem5t program  #aja4 ,def9itions ,= 
purposes ( ?is title-- 7#a7 ,acc\nt     
hold] ,! t]m acc\nt hold] means1 )      
respect to any ,s4,a4,f4,e4 acc\nt1 !   
individual = ^: b5efit su* acc\nt is    
ma9ta9$4  7#b7 ,bus9ess day ,! t]m      
bus9ess day means any day o!r ?an a     
,saturday1 ,sunday1 or legal holiday 9 !

 area involv$4  7#c7 ,cov]$ employ] ,!  
t]m cov]$ employ] means1 = any cal5d>   
ye>1 a p]son = :om an eligible          
individual is engag$ 9 employm5t dur+ ! 
ye>4  7#d7 ,eligible individual ,! t]m  
eligible individual means any individual
 ) respect to :om !re is 9 effect an    
election "u section #aje7;a74  7#e7     
,employm5t ,! t]m employm5t has ! mean+ 
provid$ 9 section #baj ( ! ,social      
,security ,act4  7#f7 ,prescrib$        
employee contribution ,! t]m prescrib$  
employee contribution means1 ) respect  
to any eligible individual :o is engag$ 
9 employm5t = a cov]$ employ] dur+ any  
cal5d> ye>1 an am\nt equal to #f4b p]c5t
 ( ! wages receiv$ by su* employee )    
respect to su* employm5t4 ,!            
,commission] ( ,social ,security %all   
provide by regulation = exclusion (     
remun]ation paid to any employee dur+   
any cal5d> ye> f ! total am\nt (        
remun]ation treat$ "u ?is p>agraph z    
wages paid to su* employee dur+ su*     
cal5d> ye> to ! ext5t t su* total am\nt 

exce$s ! contribution & b5efit base =   
su* cal5d> ye> "u section #bcj ( !      
,social ,security ,act4  7#g7 ,prescrib$
 self-employm5t contribution ,! t]m     
prescrib$ self-employm5t contribution   
means1 ) respect to ! self-employm5t    
income ( an eligible individual = any   
cal5d> ye>1 ! excess 7if any7 (--  7,a7 
#f4b p]c5t ( ! am\nt ( su*              
self-employm5t income = su* cal5d> ye>1 
to ! ext5t t su* self-employm5t income  
does n exce$1 = su* cal5d> ye>1 !       
contribution & b5efit base = su* cal5d> 
ye> "u section #bcj ( ! ,social         
,security ,act1 ov]  7,b7 ! total ( all 
prescrib$ employee contributions &      
prescrib$ employ] contributions payable 
) respect to su* eligible individual =  
su* cal5d> ye>4  ,effective ) !         
comm5cem5t ( ! #af? cal5d> ye> = :i* !  
eligible individual's election "u       
section #aje is 9 effect1 #ab4d p]c5t   
%all be sub/itut$ = #f4b p]c5t 9        
subp>agraph 7,a74  7#h7 ,prescrib$      
employ] contribution ,! t]m prescrib$   

employ] contribution means1 ) respect to
 any eligible individual :o is engag$ 9 
employm5t = a cov]$ employ] dur+ any    
cal5d> ye>1 an am\nt equal to #f4b p]c5t
 ( ! wages receiv$ by su* employee )    
respect to su* employm5t1 to ! ext5t t  
su* wages d n exce$1 = su* cal5d> ye>1 !
 contribution & b5efit base = su* cal5d>
 ye> "u section #bcj ( ! ,social        
,security ,act4  7#i7 ,s4,a4,f4,e4      
acc\nt ,! t]m ,s4,a4,f4,e4 acc\nt has ! 
mean+ provid$ 9 section #bbb7;c7 ( !    
,int]nal ,rev5ue ,code ( #aihf4  7#aj7  
,self-employm5t income ,! t]m           
self-employm5t income has ! mean+       
provid$ 9 section #baa7;b7 ( ! ,social  
,security ,act4  7#aa7 ,wages ,! t]m    
wages has ! mean+ provid$ 9 section #bji
 ( ! ,social ,security ,act4  #ajb4     
,s4,a4,f4,e4 acc\nt payroll d$uction    
programs  7a7 ,9 g5]al ,ea* p]son :o is 
a cov]$ employ] = any cal5d> ye> %all h 
9 effect ?r\gh\t su* cal5d> ye> a       
,s4,a4,f4,e4 acc\nt payroll d$uction    
program = su* p]son's employees :o are  

eligible individuals4  7b7 ,requirem5ts 
,= purposes ( ?is ,act1 ! t]m           
,s4,a4,f4,e4 acc\nt payroll d$uction    
program means a writt5 program ma9ta9$  
by a cov]$ employ] if-- 7#a7 "u su*     
program1 ! prescrib$ employee           
contribution is d$uct$ f ! wages ( ea*  
employee :o is an eligible individual & 
paid z a contribution on behalf ( !     
employee to a ,s4,a4,f4,e4 acc\nt ( su* 
employee designat$ 9 accordance )       
section #ajc1  7#b7 "u su* program1 !   
cov]$ employ]-- 7,a7 makes timely paym5t
 ( ! am\nt s d$uct$ z a contribution to 
! designat$ ,s4,a4,f4,e4 acc\nt1 &  7,b7
 effective ^u receipt f ! eligible      
individual ( c]tification 79 accordance 
) regulations :i* %all be prescrib$ by !
 ,commission] ( ,social ,security7 ( !  
comm5cem5t ( ! #af? cal5d> ye> = :i* !  
eligible employee's election "u section 
#aje has be5 9 effect1 makes timely     
paym5t1 toge!r ) ! am\nt s d$uct$1 ( !  
prescrib$ employ] contribution ) respect
 to ! eligible individual1  "u          

regulations ( ! ,commission] ( ,social  
,security apply+ ! same pr9ciples relat+
 to ! timel9ess ( paym5t z are          
applicable "u *apt] #fb ( ! ,int]nal    
,rev5ue ,code ( #aihf ) respect to taxes
 "u *apt] #ba ( su* ,code1 &  7#c7 !    
employ] receives no comp5sation = ! co/ 
( adm9i/]+ su* program4  7c7 ,am\nts    
o!rwise payable may be accumulat$ by    
employ] 9 c]ta9 cases ,if1 "u ! t]ms ( !
 gov]n+ in/rum5ts creat+ a ,s4,a4,f4,e4 
acc\nt designat$ "u section #ajc1       
contributions bel[ a specifi$ am\nt w n 
be accept$1 ! requirem5ts ( subsection  
7b77#b7 %all be treat$ z met if am\nts  
d$uct$ f ! wages ( an employee :o is an 
eligible individual1 toge!r ) prescrib$ 
employ] contributions 7if any71 are     
accumulat$ by ! cov]$ employ] & paid to 
su* acc\nt o!rwise 9 accordance )       
subsection 7b77#b7 ) ref]5ce to ! fir/  
day on :i* ! accumulat$ am\nt exce$s su*
 specifi$ am\nt4  #ajc4 ,designation (  
,s4,a4,f4,e4 acc\nts  7a7 ,9 g5]al      
,except z provid$ 9 subsection 7b71 a   

,s4,a4,f4,e4 acc\nt to :i* contributions
 ) respect to any employee :o is an     
eligible individual are requir$ to be   
paid "u section #ajb %all be su* an     
acc\nt designat$ by su* employee to su* 
employ] n lat] ?an #aj bus9ess days aft]
 ! date on :i* su* employee becomes an  
employee ( su* employ]4 ,any su*        
designation %all be made 9 su* =m &     
mann] z may be prescrib$ 9 regulations (
 ! ,commission] ( ,social ,security4    
7b7 ,designation 9 abs5ce ( timely      
designation by employee ,9 any case 9   
:i* no timely designation ( a           
,s4,a4,f4,e4 acc\nt is made1 ! cov]$    
employ] %all designate su* acc\nt 9     
accordance ) regulations ( !            
,commission] ( ,social ,security4  7c7  
,subsequ5t sub/itution ( acc\nts ,!     
,commission] ( ,social ,security %all   
provide by regulation = subsequ5t       
designation ( a ,s4,a4,f4,e4 acc\nt by  
an acc\nt hold] 9 lieu ( an acc\nt      
previ\sly designat$ by su* acc\nt hold] 
"u ?is section4  #ajd4 ,self-employ$    

individuals  7a7 ,9 g5]al ,9 ! case ( an
 eligible individual :o has             
self-employm5t income = any cal5d> ye>1 
su* individual %all make timely paym5ts 
to a ,s4,a4,f4,e4 acc\nt designat$ by   
su* individual ( ! prescrib$            
self-employm5t contribution ) respect to
 su* individual = su* cal5d> ye> 9      
accordance ) regulations ( !            
,commission] ( ,social ,security1 apply+
 ! same pr9ciples relat+ to timel9ess ( 
paym5t z are applicable "u *apt] #fb ( !
 ,int]nal ,rev5ue ,code ( #aihf )       
respect to taxes "u *apt] #b ( su*      
,code4  7b7 ,designation ( acc\nt ,!    
designation ( a ,s4,a4,f4,e4 acc\nt =   
paym5t ( prescrib$ self-employm5t       
contributions %all be made 9 su* =m &   
mann] z may be prescrib$ 9 regulations (
 ! ,commission] ( ,social ,security4    
7c7 ,p]iodic paym5t ,! ,commission] (   
,social ,security %all provide by       
regulation = p]iodic in/allm5t paym5ts  
dur+ ! cal5d> ye> ( prescrib$           
self-employm5t contributions = ea*      

eligible individual1 tak+ into acc\nt1 z
 appropriate = ea* p]iod1 prescrib$     
employee contributions = su* individual4
  #aje4 ,elective p>ticipation  7a7     
,election ,any individual :o has be5    
assign$ a social security acc\nt numb]  
"u section #bje7;c77#b77;,b7 ( ! ,social
 ,security ,act & has be5 paid wages or 
has d]iv$ self-employm5t income may1 on 
or aft] ! fir/ day ( ! fir/ cal5d> ye>  
beg9n+ aft] ! date ( enactm5t ( ?is     
,act1 elect "u ?is section to be an     
eligible individual = purposes ( ?is    
,act4 ,any su* election %all be made by 
fil+ ) ! ,commission] ( ,social         
,security1 ! ,secret>y ( ! ,treasury1 & 
ea* p]son 7if any7 :o is an employ] (   
su* individual on ! date ( ! fil+1 9 su*
 =m & mann] z %all be prescrib$ 9       
regulations ( ! ,commission] 79         
consultation ) ! ,secret>y ( !          
,treasury71 a writt5 & sign$ decl>ation 
( su* individual's int5tion to be treat$
 z an eligible individual = purposes (  
?is ,act4 ,an election "u ?is section   

%all be effective ) respect to wages    
paid1 & self-employm5t income d]iv$1 on 
or aft] ,janu>y #a foll[+ ! date ( !    
fil+ ( ! election4  7b7 ,election       
ineffective if entitl$ to social        
security b5efits ,any election "u ?is   
section %all n take effect if1 z ( !    
effective date ( ! election1 !          
individual is entitl$ to an old-age     
insurance b5efit "u section #bjb7;a7 ( !
 ,social ,security ,act or to a         
disability insurance b5efit "u section  
#bbc ( su* ,act4  7c7 ,irrevocability   
subject to grace p]iod  7#a7 ,9 g5]al   
,unless revok$ 9 accordance ) p>agraph  
7#b71 an election "u ?is section %all be
 irrevocable4  7#b7 ,two-ye> grace p]iod
  7,a7 ,9 g5]al ,an individual may      
revoke an election "u ?is section by    
fil+ ) ! ,commission] ( ,social         
,security1 ! ,secret>y ( ! ,treasury1 & 
ea* p]son 7if any7 :o is an employ] (   
su* individual on ! date ( ! fil+1 9 su*
 =m & mann] z %all be prescrib$ 9       
regulations ( ! ,commission] 79         

consultation ) ! ,secret>y ( !          
,treasury71 a writt5 & sign$ revocation 
( ! election at any "t be=e ! end ( !   
two-ye> p]iod beg9n+ ) ! effective date 
( ! election4 ,a revocation "u ?is      
subsection %all take effect ,janu>y #a  
foll[+ ! date ( ! fil+ ( ! revocation1  
except t a revocation fil$ dur+ !       
#ij-;day p]iod beg9n+ ) ! date ( ! fil+ 
( ! election %all take effect z ( !     
effective date ( ! election4 ,^u !      
effective date ( a revocation "u ?is    
subsection1 entitlem5t to b5efits "u    
title ,,ii ( ! ,social ,security ,act   
%all be det]m9$ z if ! revok$ election  
_h n occurr$1 except t1 = purposes ( any
 su* entitlem5t1 wages paid1 &          
self-employm5t income d]iv$1 dur+ !     
p]iod = :i* ! election 0 9 effect %all n
 be tak5 into acc\nt4 ,no subsequ5t     
election "u ?is section may take effect 
) respect to an individual :o has fil$ a
 revocation "u ?is subsection 7except a 
revocation fil$ dur+ ! #ij-;day p]iod   
beg9n+ ) ! date ( ! fil+ ( ! election74 

7,b7 ,r$uction 9 b5efits ,! prim>y      
insurance am\nt1 z det]m9$ "u section   
#bae ( ! ,social ,security ,act1 ( any  
individual :o has fil$ a revocation "u  
?is subsection be=e ! end ( ! two-ye>   
p]iod describ$ 9 subp>agraph 7,a7 7&    
aft] ! #ij-;day p]iod ref]r$ to 9       
subp>agraph 7,a77 %all be r$uc$ 7except 
= purposes ( det]m9+ b5efits "u section 
#bbc ( su* ,act1 & be=e any application 
( section #bae7;i7 ( su* ,act7 by #bj   
p]c5t4  #ajf4 ,p5alties  7a7 ,failure   
,to e/abli% ,s4,a4,f4,e4 acc\nt payroll 
d$uction program ,any cov]$ employ] :o  
fails to meet ! requirem5ts ( section   
#ajb = any cal5d> ye> %all be subject to
 a civil p5alty ( n to exce$--  7#a7    
#bej1jjj1 9 ! case ( an employ] :o is an
 individual1 or  7#b7 #ejj1jjj1 9 any   
o!r case4  7b7 ,failure ,to make        
d$uctions requir$ "u program ,any cov]$ 
employ] :o fails to timely d$uct 9 full 
! am\nt f ! wages ( an employee :o is an
 eligible individual z requir$ "u an    
applicable ,s4,a4,f4,e4 acc\nt payroll  

d$uction program %all be subject to a   
civil p5alty = ea* su* failure ( n to   
exce$--  7#a7 #bej1jjj1 9 ! case ( an   
employ] :o is an individual1 or  7#b7   
#ejj1jjj1 9 any o!r case4  7c7 ,failure 
,to pay d$uct$ wages to ,s4,a4,f4,e4    
acc\nt ,if an am\nt d$uct$ "u a         
,s4,a4,f4,e4 acc\nt payroll d$uction    
program f ! wages ( an employee :o is an
 eligible individual is n timely paid 9 
full to ! designat$ ,s4,a4,f4,e4 acc\nt 
9 accordance ) section #ajb1 ! cov]$    
employ] fail+ to make su* paym5t--  7#a7
 %all be subject to a civil p5alty = ea*
 su* failure ( n to exce$-- 7,a7        
#bej1jjj1 9 ! case ( an employ] :o is an
 individual1 or  7,b7 #ejj1jjj1 9 any   
o!r case1 &  7#b7 %all be liable to !   
employee = int]e/ on ! unpaid am\nt at a
 rate equal to #aj p]c5tage po9ts 9     
excess ( ! ,f$]al %ort-t]m rate "u      
section #abgd7;d77#a7 ( ! ,int]nal      
,rev5ue ,code ( #aihf1 calculat$ f ! la/
 day by :i* su* am\nt 0 requir$ to be s 
paid to ! date on :i* su* am\nt is paid 

into ! designat$ ,s4,a4,f4,e4 acc\nt4   
7d7 ,failure ,to pay prescrib$          
self-,employm5t contributions to        
,s4,a4,f4,e4 acc\nt ,any eligible       
individual fail+ to timely pay 9 full a 
prescrib$ self-employm5t contribution to
 a designat$ ,s4,a4,f4,e4 acc\nt z      
requir$ "u section #ajd %all be subject 
to a civil p5alty = ea* su* failure ( n 
to exce$ #bej1jjj1 plus int]e/ on !     
unpaid am\nt at a rate equal to #aj     
p]c5tage po9ts 9 excess ( ! ,f$]al      
%ort-t]m rate "u section #abgd7;d77#a7 (
 ! ,int]nal ,rev5ue ,code ( #aihf1      
calculat$ f ! la/ day by :i* su* am\nt 0
 requir$ to be s paid to ! date on :i*  
su* am\nt is paid into ! designat$      
,s4,a4,f4,e4 acc\nt4  7e7 ,rules =      
application ( section  7#a7 ,p5alties   
assess$ by ,commission] ( ,social       
,security ,any civil p5alty assess$ by  
?is section %all be impos$ by !         
,commission] ( ,social ,security &      
collect$ 9 a civil action4  7#b7        
,compromises ,! ,commission] may        

compromise ! am\nt ( any civil p5alty   
impos$ by ?is section4  7#c7 ,au?ority  
to waive p5alty 9 c]ta9 cases ,!        
,commission] may waive ! application (  
?is section ) respect to any failure if 
! ,commission] det]m9es t su* failure is
 due to reasonable cause & n to         
int5tional disreg>d ( rules &           
regulations4  #ajg4 ,f$]al civilian &   
milit>y p]sonnel  7a7 ,9 g5]al ,n lat]  
?an ! la/ day ( ! cal5d> ye> dur+ :i* ! 
date ( enactm5t ( ?is ,act occurs1 !    
,(fice ( ,p]sonnel ,managem5t1 aft]     
appropriate /udy1 %all submit to !      
,presid5t & ea* ,h\se ( ,congress a     
writt5 report conta9+ recomm5dations on 
h[ to provide = ! application ( ?is ,act
 ) respect to ,f$]al civilian & milit>y 
p]sonnel4  7b7 ,requirem5ts ,! report-- 
7#a7 %all be prep>$ 9 consultation ) !  
,social ,security ,adm9i/ration1 !      
,securities & ,ex*ange ,commission1 &   
o!r appropriate ag5cies2 &  7#b7 %all be
 accompani$ by draft legislation :i*1 if
 enact$1 w\ld c>ry out ! recomm5dations 

conta9$ 9 su* report4  7c7 ,provisions  
relat+ to ! cont9u$ op]ation ( exi/+    
retirem5t sy/ems ,to ! ext5t t ! report 
& draft legislation relate to provisions
 ( law 9 effect be=e ! date ( enactm5t (
 ?is ,act1 ea* %all address at lea/ !   
foll[+3  7#a7 ,f$]al employees retirem5t
 sy/em  7,a7 ,section #hdja7aa7 ( title 
#e1 ,unit$ ,/ates ,code 7relat+ to !    
def9ition ( an employee71 :i* includes !
 requirem5t t ! individual conc]n$ be   
someone ^: civilian s]vice is employm5t 
= ! purposes ( title ,,ii ( ! ,social   
,security ,act & *apt] #ba ( ! ,int]nal 
,rev5ue ,code ( #aihf4  7,b7 ,section   
#hdba ( su* title 7relat+ to annuity    
supplem5t71 :i* includes provisions     
incorporat+ ! notion ( ! p]iod ( "t =   
:i* ! individual is or w\ld be entitl$  
to old-age insurance b5efits "u title   
,,ii ( ! ,social ,security ,act1 &      
provisions = comput+ ! am\nt ( su*      
supplem5t bas$ on ! am\nt ( c]ta9       
b5efits to :i* ! individual w\ld be     
entitl$ "u su* ,act4  7,c7 ,section     

#hddb ( su* title 7relat+ to rights ( a 
wid[ or wid[]71 :i* includes provisions 
"u :i* a supplem5t>y annuity = a wid[ or
 wid[] is n payable to anyone :o w\ld n 
be entitl$ to c]ta9 b5efits "u ! ,social
 ,security ,act1 & provisions = !       
computation ( any su* annuity bas$ on ! 
am\nt ( c]ta9 b5efits :i* w\ld be       
payable to t individual "u ! ,social    
,security ,act4  7,d7 ,section #hddc (  
su* title 7relat+ to rights ( a *ild71  
:i* includes provisions "u :i*1 z "p ( !
 =mula = comput+ ! am\nt ( a survivor   
annuity = a *ild1 !re is incorporat$ !  
notion ( ! am\nt ( *ild's insurance     
b5efits :i* are or w\ld be payable "u   
title ,,ii ( ! ,social ,security ,act4  
7#b7 ,civil s]vice retirem5t sy/em  7,a7
 ,section #hccd7k7 ( su* title 7relat+  
to special rules = det]m9+ d$uctions &  
contributions = individuals subject to  
(fset-#hc treatm5t71 :i* incorporates ! 
notion ( ! ,,oasdi contribution made f  
,f$]al wages ( ! individual conc]n$4    
7,b7 ,section #hcdi ( su* title 7relat+ 

to (fset bas$ on c]ta9 b5efits "u !     
,social ,security ,act71 :i*            
incorporates notions relat+ to actual or
 con/ructive eligibility = b5efits "u ! 
,social ,security ,act1 & ! am\nt ( ^?  
b5efits4  7#c7 ,coord9ation provisions  
,provisions ( law involv+ a r$uction or 
o!r adju/m5t 9 retirem5t b5efits 7or    
eligibility !re=71 bas$ on any          
individual's eligibility = b5efits "u   
title ,,ii ( ! ,social ,security ,act4  
7#d7 ,o!r retirem5t sy/ems ,simil>      
provisions ( law "u o!r retirem5t sy/ems
 cov]+ ,f$]al civilian or milit>y       
p]sonnel4  7d7 ,provisions relat+ to !  
new sy/em ,to ! ext5t t ! report & draft
 legislation relate to ! implem5tation (
 any o!r title ( ?is ,act1 ea* %all     
address at lea/ ! foll[+3  7#a7 ,:at !  
specifications = ! ,s4,a4,f4,e4 acc\nt  
payroll d$uction program or programs    
cov]+ ,f$]al civilian & milit>y p]sonnel
 %all be or1 alt]natively1 h[ ^?        
specifications %all be develop$4  7#b7  
,:i* ag5cies or in/rum5talities ( !     

,f$]al ,gov]nm5t %all be responsible =  
op]at+ or ma9ta9+ :i* aspects ( !       
program or programs ref]r$ to 9 p>agraph
 7#a74  7#c7 ,:i* p5alty provisions are 
appropriate or inappropriate ) respect  
to ! ,f$]al ,gov]nm5t 9 its capacity z a
 cov]$ employ]1 subject to :at          
modifications 7if any74  ,,ii           
,tax-exempt ,s4,a4,f4,e4 acc\nts  #bja4 
,s4,a4,f4,e4 acc\nts  7a7 ,9 g5]al ,"p  
,,vii ( sub*apt] ,b ( *apt] #a ( !      
,int]nal ,rev5ue ,code ( #aihf 7relat+  
to additional itemiz$ d$uctions =       
individuals7 is am5d$ by r$esignat+     
section #bbd z section #bbe & by ins]t+ 
aft] section #bbc ! foll[+ new section3 
#bbd4 ,s4,a4,f4,e4 acc\nts  7a7         
,d$uction all[$ ,9 ! case ( an          
individual1 !re %all be all[$ z a       
d$uction ! aggregate am\nt paid 9 ca%   
dur+ ! taxable ye> by or on behalf ( su*
 individual to a ,s4,a4,f4,e4 acc\nt (  
su* individual4  7b7 ,limitation ,!     
am\nt all[able z a d$uction "u          
subsection 7a7 = any taxable ye> %all n 

exce$ #f4b p]c5t ( ! less] (--  7#a7 !  
contribution & b5efit base 7z det]m9$ "u
 section #bcj ( ! ,social ,security     
,act7 = ! cal5d> ye> :i* ends ) or )9   
su* taxable ye>1 or  7#b7 ! sum (--     
7,a7 ! am\nt ( wages 7z def9$ 9 section 
#caba7;a77 receiv$ dur+ su* cal5d> ye>1 
&  7,b7 ! am\nt ( ! self-employm5t      
income 7z def9$ 9 section #adjb7 ( su*  
individual = ! taxable ye>4  ,effective 
) ! comm5cem5t ( ! #af? cal5d> ye> = :i*
 ! individual's election "u section #aje
 ( ! ,sav+s ,acc\nt = ,e ,am]ican ,act (
 #bjah is effective1 ! limitation "u !  
prec$+ s5t5ce %all be increas$ by any   
prescrib$ employ] contribution paid to a
 p]sonal retirem5t acc\nt ( su*         
individual pursuant to section          
#ajb7;b77#b77;,b7 ( su* ,act & ! portion
 ( any prescrib$ self-employm5t         
contribution paid to su* an acc\nt :i*  
is attributable to ! increase 9 su*     
contribution requir$ by ! la/ s5t5ce (  
section #aja7g7 ( su* ,act4  7c7        
,s4,a4,f4,e4 acc\nt ,= purposes ( ?is   

section1 ! t]m ,s4,a4,f4,e4 acc\nt means
 a tru/ creat$ or organiz$ 9 ! ,unit$   
,/ates exclusively = ! b5efit ( an      
individual or 8 b5efici>ies1 b only if !
 writt5 gov]n+ in/rum5t creat+ ! tru/   
meets ! foll[+ requirem5ts3  7#a7       
,except 9 ! case ( rollov] contributions
 f ano!r ,s4,a4,f4,e4 acc\nt ( su*      
individual-- 7,a7 no contribution w be  
accept$ unless x is 9 ca%1  7,b7        
contributions w n be accept$ = ! taxable
 ye> 9 excess ( #f4b p]c5t ( !          
contribution & b5efit base 7z det]m9$ "u
 section #bcj ( ! ,social ,security     
,act7 = ! cal5d> ye> :i* ends ) or )9   
su* taxable ye>1 &  7,c7 any            
contributions ) respect to an acc\nt    
hold] :i* are n accept$ pursuant to ?is 
p>agraph are promptly refund$ directly  
to ! acc\nt hold]4  ,9 ! case ( any su* 
individual1 effective = taxable ye>s    
beg9n+ ) or aft] ! #af? cal5d> ye> = :i*
 ! individual's election "u section #aje
 ( ! ,sav+s ,acc\nt = ,e ,am]ican ,act (
 #bjah is effective1 #ab4d p]c5t %all be

 sub/itut$ = #f4b p]c5t 9 subp>agraph   
7,b74  7#b7 ,! tru/ee is a bank 7z def9$
 9 section #djh7n77 or su* o!r p]son :o 
demon/rates to ! satisfaction ( !       
,secret>y t ! mann] 9 :i* su* o!r p]son 
w adm9i/] ! tru/ w be consi/5t ) !      
requirem5ts ( ?is section4  7#c7 ,no "p 
( ! tru/ funds w be inve/$ 9 life       
insurance contracts4  7#d7 ,! int]e/ (  
an individual 9 ! balance 9 8 acc\nt is 
non=feitable4  7#e7 ,! assets ( ! tru/ w
 n be comm+l$ ) o!r prop]ty except 9 a  
common tru/ fund or common inve/m5t     
fund4  7d7 ,tax treatm5t ( di/ributions 
7#a7 ,9 g5]al ,except z o!rwise provid$ 
9 ?is subsection1 any am\nt di/ribut$   
out ( a ,s4,a4,f4,e4 acc\nt %all be     
includ$ 9 gross income ( ! di/ributee = 
! taxable ye> 9 :i* ! di/ribution is    
receiv$4 ,not)/&+ any o!r provision (   
?is title 7includ+ *apt]s #aa & #ab71 ! 
basis ( any p]son 9 su* an acc\nt is    
z]o4  7#b7 ,exceptions = di/ributions   
aft] age #eia_/b or dea? ,p>agraph 7#a7 
%all n apply to any di/ribution out ( a 

,s4,a4,f4,e4 acc\nt-- 7,a7 made on or   
aft] ! date on :i* ! acc\nt b5efici>y   
atta9s age #eia_/b1 or  7,b7 made to !  
acc\nt b5efici>y 7or to ! e/ate ( !     
b5efici>y7 on or aft] ! dea? ( ! acc\nt 
b5efici>y4  7#c7 ,exceptions =          
di/ributions to pur*ase c]ta9 insurance 
,p>agraph 7#a7 %all n apply to any      
di/ribution out ( a ,s4,a4,f4,e4 acc\nt 
to ! acc\nt b5efici>y to ! ext5t su*    
di/ributions d n exce$ ! sum ( ! exp5ses
 paid or incurr$ dur+ ! taxable ye> =-- 
7,a7 any qualifi$ long-t]m c>e insurance
 contract 7b only to ! ext5t ( eligible 
long-t]m c>e premiums 7z def9$ 9 section
 #bac7;d77#aj771  7,b7 disability       
insurance1 or  7,c7 t]m life insurance4 
7#d7 ,exceptions = c]ta9 o!r            
di/ributions ,rules simil> to ! rules ( 
p>agraphs 7#c71 7#d71 7#e71 & 7#f7 (    
section #djh7;d7 %all apply = purposes (
 ?is section4  7e7 ,tax treatm5t (      
acc\nts  7#a7 ,exemption f tax ,a       
,s4,a4,f4,e4 acc\nt is exempt f taxation
 "u ?is subtitle unless su* acc\nt has  

ceas$ to be a ,s4,a4,f4,e4 acc\nt by    
reason ( p>agraph 7#b74 ,not)/&+ !      
prec$+ s5t5ce1 any su* acc\nt is subject
 to ! taxes impos$ by section #eaa      
7relat+ to imposition ( tax on unrelat$ 
bus9ess income ( *>itable1 etc4         
organizations74  7#b7 ,acc\nt t]m9ations
 ,rules simil> to ! rules ( p>agraphs   
7#b7 & 7#d7 ( section #djh7;e7 %all     
apply to ,s4,a4,f4,e4 acc\nts1 & any    
am\nt treat$ z di/ribut$ "u su* rules   
%all be treat$ z n us$ to pay exp5ses   
describ$ 9 subsection 7d77#c74  7f7     
,additional tax on am\nts includ$ 9     
gross income ,if any di/ribution f a    
,s4,a4,f4,e4 acc\nt is includible 9     
gross income ( ! acc\nt b5efici>y1 ! tax
 liability ( su* b5efici>y "u ?is *apt] 
= ! taxable ye> 9 :i* ! di/ribution is  
receiv$ %all be increas$ by an am\nt    
equal to #bj p]c5t ( ! am\nt ( !        
di/ribution4  7g7 ,o!r def9ition &      
special rules  7#a7 ,acc\nt b5efici>y ,=
 purposes ( ?is section1 ! t]m acc\nt   
b5efici>y means ! individual = ^: b5efit

 ! ,s4,a4,f4,e4 acc\nt 0 e/abli%$4  7#b7
 ,c]ta9 rules to apply ,rules simil> to 
! foll[+ rules %all apply = purposes (  
?is section3  7,a7 ,section #bai7;d77#b7
 7relat+ to no d$uction = rollov]s74    
7,b7 ,section #bai7;f77#c7 7relat+ to "t
 :5 contributions deem$ made74  7,c7    
,section #bai7;f77#e7 7relat+ to employ]
 paym5ts74  7,d7 ,section #djh7;g7      
7relat+ to community prop]ty laws74     
7,e7 ,section #djh7;h7 7relat+ to       
cu/odial acc\nts74  7h7 ,reports ,!     
tru/ee ( a ,s4,a4,f4,e4 acc\nt %all make
 su* reports reg>d+ su* acc\nt to !     
,secret>y & to ! individual = ^: b5efit 
! acc\nt is ma9ta9$ ) respect to        
contributions1 di/ributions1 & su* o!r  
matt]s z ! ,secret>y may by regulation  
prescribe4 ,! reports requir$ by ?is    
subsection %all be fil$ at su* "t & 9   
su* mann]1 & furni%$ to su* individuals 
at su* "t & 9 su* mann]1 z may be       
requir$ by su* regulations4  4  7b7     
,d$uction all[$ 9 arriv+ at adju/$ gross
 income ,subsection 7a7 ( section #fb ( 

su* ,code is am5d$ by ins]t+ at ! end ! 
foll[+ new p>agraph3  7#bb7 ,s4,a4,f4,e4
 acc\nt contributions ,! d$uction all[$ 
by section #bbd4  4  7c7 ,tax on excess 
contributions  7#a7 ,subsection 7a7 (   
section #digc ( su* ,code 7relat+ to tax
 on excess contributions to individual  
retirem5t acc\nts1 etc47 is am5d$ by    
/rik+ or at ! end ( p>agraph 7#e71 by   
ins]t+ or at ! end ( p>agraph 7#f71 & by
 ins]t+ aft] p>agraph 7#f7 ! foll[+ new 
p>agraph3  7#g7 a ,s4,a4,f4,e4 acc\nt   
7)9 ! mean+ ( section #bbd7;c771  4     
7#b7 ,section #digc ( su* ,code is am5d$
 by add+ at ! end ! foll[+ new          
subsection3  7i7 ,excess contributions  
to ,s4,a4,f4,e4 acc\nts ,= purposes (   
?is section1 9 ! case ( ,s4,a4,f4,e4    
acc\nts 7)9 ! mean+ ( section #bbd7;c771
 ! t]m excess contributions means ! sum 
(--  7#a7 ! excess 7if any7 (-- 7,a7 !  
aggregate am\nt contribut$ = ! taxable  
ye> to ! acc\nts 7o!r ?an rollov]       
contributions71 ov]  7,b7 ! am\nt       
all[able z a d$uction "u section #bbd = 

su* contributions1 &  7#b7 ! am\nt      
det]m9$ "u ?is subsection = ! prec$+    
taxable ye>1 r$uc$ by ! sum (--  7,a7 ! 
di/ributions out ( ! acc\nts :i* 7      
includ$ 9 gross income "u rules simil>  
to ! rules ( section #djh7;d77#e7 :i*   
apply to su* acc\nts by reason ( section
 #bbd7;d77#d71 &  7,b7 ! excess 7if any7
 (-- 7i7 ! maximum am\nt all[able z a   
d$uction "u section #bbd7;b7 = ! taxable
 ye>1 ov]  7ii7 ! am\nt contribut$ to ! 
acc\nts = ! taxable ye>4  ,= purposes ( 
?is subsection1 any contribution :i* is 
di/ribut$ out ( ! ,s4,a4,f4,e4 acc\nt 9 
a di/ribution to :i* ! rules simil> to !
 rules ( section #djh7;d77#d7 :i* apply 
to su* acc\nts by reason ( section      
#bbd7;d77#d7 %all be treat$ z an am\nt n
 contribut$4  4  7d7 ,tax on prohibit$  
transactions  7#a7 ,9 g5]al ,p>agraph   
7#a7 ( section #dige7;e7 ( su* ,code    
7relat+ to prohibit$ transactions7 is   
am5d$ by /rik+ or at ! end ( subp>agraph
 7,f71 by r$esignat+ subp>agraph 7,g7 z 
subp>agraph 7,h71 & by ins]t+ aft]      

subp>agraph 7,f7 ! foll[+ new           
subp>agraph3  7,g7 a ,s4,a4,f4,e4 acc\nt
 describ$ 9 section #bbd7;c71 or  4     
7#b7 ,special rule ,subsection 7c7 (    
section #dige ( su* ,code is am5d$ by   
add+ at ! end ! foll[+ new p>agraph3    
7#g7 ,special rule = ,s4,a4,f4,e4       
acc\nts ,an individual = ^: b5efit a    
,s4,a4,f4,e4 acc\nt is e/abli%$ %all be 
exempt f ! tax impos$ by ?is section )  
respect to any transaction conc]n+ su*  
acc\nt 7:i* w\ld o!rwise be taxable "u  
?is section7 if section #bbd7;e77#b7    
applies ) respect to su* transaction4  4
  7e7 ,failure ,to provide reports on   
,s4,a4,f4,e4 acc\nts ,p>agraph 7#b7 (   
section #ffic7;a7 ( su* ,code 7relat+ to
 failure to provide reports on          
individual retirem5t acc\nts or         
annuities7 is am5d$ by /rik+ & at ! end 
( subp>agraph 7,e71 by /rik+ ! p]iod at 
! end ( subp>agraph 7,f7 & ins]t+ 1 &1 &
 by add+ at ! end ! foll[+ new          
subp>agraph3  7,g7 ,section #bbd7;h7    
7relat+ to ,s4,a4,f4,e4 acc\nts74  4    

7f7 ,cl]ical am5dm5ts  7#a7 ,! table (  
sections = "p ,,vii ( sub*apt] ,b (     
*apt] #a ( su* ,code is am5d$ by /rik+ !
 item relat+ to section #bbd & ins]t+ ! 
foll[+ new items3  ,sec4 #bbd4          
,s4,a4,f4,e4 acc\nts4 ,sec4 #bbe4 ,cross
 ref]5ces4  4  7#b7 ,! table ( sections 
= *apt] #dc ( su* ,code is am5d$ by     
/rik+ ! item relat+ to section #digc &  
ins]t+ ! foll[+ new item3  ,sec4 #digc4 
,tax on excess contributions to c]ta9   
tax-favor$ acc\nts & annuities1 etc4  4 
#bjb4 ,effective date ,! am5dm5ts made  
by ?is title %all apply to contributions
 made = taxable ye>s beg9n+ on or aft] !
 fir/ day ( ! fir/ cal5d> ye> beg9n+    
aft] ! date ( enactm5t ( ?is ,act4      
,,iii ,con=m+ am5dm5ts to ! ,social     
,security ,act & ! ,int]nal ,rev5ue     
,code ( #aihf  #cja4 ,r$uctions 9 &     
exemptions f ,,fica taxes & ,,seca taxes
 ) respect to eligible individuals  7a7 
,,fica tax on employees ,section #caja (
 ! ,int]nal ,rev5ue ,code ( #aihf       
7relat+ to ,,oasdi tax on employees7 is 

am5d$-- 7#a7 9 subsection 7a71 by /rik+ 
,9 addition & ins]t+ ,subject to        
subsection 7c71 9 addition2  7#b7 by    
r$esignat+ subsection 7c7 z subsection  
7d72 &  7#c7 by ins]t+ aft] subsection  
7b7 ! foll[+ new subsection3  7c7       
,exemption f ,,oasdi tax = eligible     
individuals ,subsection 7a7 %all n apply
 ) respect to wages receiv$ by an       
eligible individual 7z def9$ 9 section  
#aja7d7 ( ! ,sav+s ,acc\nt = ,e ,am]ican
 ,act ( #bjah74  4  7b7 ,,fica tax on   
employ]s ,section #caaa ( su* ,code     
7relat+ to ,,oasdi tax on employees7 is 
am5d$-- 7#a7 9 subsection 7a71 by /rik+ 
,9 addition & ins]t+ ,subject to        
subsection 7c71 9 addition2  7#b7 by    
r$esignat+ subsection 7c7 z subsection  
7d72 &  7#c7 by ins]t+ aft] subsection  
7b7 ! foll[+ new subsection3  7c7       
,exemption f ,,oasdi tax ) respect to   
eligible individuals ,9 ! case ( an     
eligible individual 7z def9$ 9 section  
#aja7d7 ( ! ,sav+s ,acc\nt = ,e ,am]ican
 ,act ( #bjah71 effective ) ! #af?      

cal5d> ye> = :i* su* individual's       
election "u section #aje ( su* ,act is  
effective1 subsection 7a7 %all n apply )
 respect to wages receiv$ by su*        
individual4  4  7c7 ,r$uction ,9 &      
exemption f self-,employm5t tax         
,subsection 7a7 ( section #adja ( su*   
,code 7relat+ to ,,oasdi tax on         
self-employm5t income7 is am5d$--  7#a7 
9 subsection 7a71 by /rik+ ,9 addition &
 ins]t+ ,subject to subsection 7c71 9   
addition2  7#b7 by r$esignat+ subsection
 7c7 z subsection 7d72 &  7#c7 by ins]t+
 aft] subsection 7b7 ! foll[+ new       
subsection3  7c7 ,adju/m5t to ,,oasdi   
tax  7#a7 ,r$uction ,9 ! case ( an      
eligible individual 7z def9$ 9 section  
#aja7d7 ( ! ,sav+s ,acc\nt = ,e ,am]ican
 ,act ( #bjah71 = taxable ye>s beg9n+ ) 
or dur+ ! #a/ #ae cal5d> ye>s = :i* su* 
individual's election is 9 effect "u    
section #aje ( su* ,act1 ! rate ( tax "u
 subsection 7a7 %all be #f4bj p]c5t4    
7#b7 ,exemption ,9 ! case ( su* an      
eligible individual1 effective = taxable

 ye>s beg9n+ ) or dur+ ! #af? cal5d> ye>
 = :i* su* individual's election "u su* 
section #aje is effective1 subsection   
7a7 %all n apply4  4  7d7 ,effective    
date ,! am5dm5ts made by ?is section    
%all apply ) respect to wages receiv$ on
 or aft] ! fir/ day ( ! fir/ cal5d> ye> 
beg9n+ aft] ! date ( enactm5t ( ?is     
,act1 & ) respect to self-employm5t     
income = taxable ye>s beg9n+ aft] su*   
fir/ day4  #cjb4 ,exclusion ( eligible  
individuals f old-age1 survivors1 &     
disability insurance cov]age  7a7       
,mon?ly insurance b5efits "u ,section   
#bjb ,section #bjb ( ! ,social ,security
 ,act 7#db ,u4,s4,c4 #djb7 is am5d$ by  
add+ at ! end ! foll[+ new subsection3  
7aa7 ,limitation on paym5t to eligible  
individuals "u ,sav+s ,acc\nt = ,e      
,am]ican ,act ( #bjah  7#a7 ,not)/&+ any
 o!r provision ( ?is title1 no mon?ly   
b5efits %all be paid "u ?is section bas$
 on ! wages & self-employm5t income ( an
 eligible individual 7z def9$ 9 section 
#aja7d7 ( ! ,sav+s ,acc\nt = ,e ,am]ican

 ,act ( #bjah74  7#b7 ,det]m9ations (   
entitlem5t to hospital insurance b5efits
 "u section #bbf or #bbf;,a %all be made
 )\t reg>d to p>agraph 7#a74  4  7b7    
,disability insurance b5efits "u        
,section #bbc ,section #bbc ( su* ,act  
7#db ,u4,s4,c4 #dbc7 is am5d$ by add+ at
 ! end ! foll[+ new subsection3  7k7    
,limitation on paym5t to eligible       
individuals "u ,sav+s ,acc\nt = e       
,am]ican ,act ( #bjjg  7#a7 ,not)/&+ any
 o!r provision ( ?is title1 no mon?ly   
b5efits %all be paid "u ?is section bas$
 on ! wages & self-employm5t income ( an
 eligible individual 7z def9$ 9 section 
#aja7d7 ( ! ,sav+s ,acc\nt = ,e ,am]ican
 ,act ( #bjah74  7#b7 ,det]m9ations (   
entitlem5t to hospital insurance b5efits
 "u section #bbf or #bbf;,a %all be made
 )\t reg>d to p>agraph 7#a74  4  #cjc4  
,in=mation provid$ 9 social security    
acc\nt /atem5ts  7a7 ,9 g5]al ,section  
#aadc ( ! ,social ,security ,act 7#db   
,u4,s4,c4 #acbj;b-#ac7 is am5d$ to read 
z foll[s3  #aadc4 ,social ,security     

,acc\nt ,/atem5t  7a7 ,provision (      
annual /atem5ts ,! ,commission] (       
,social ,security %all provide an annual
 social security acc\nt /atem5t         
7h]e9aft] 9 ?is section ref]r$ to z !   
/atem5t7 to ea* eligible individual :o  
is n receiv+ b5efits "u title ,,ii & =  
:om a mail+ address c be det]m9$ ?r\gh  
su* me?ods z ! ,commission] det]m9es to 
be appropriate4  7b7 ,cont5ts ( /atem5t 
,ea* /atem5t %all conta9-- 7#a7 ! am\nt 
( wages paid to & self-employm5t income 
d]iv$ by ! eligible individual z %[n by 
! records ( ! ,commission]2  7#b7 an    
e/imate ( ! aggregate ( ! employ]1      
employee1 & self-employm5t contributions
 ( ! eligible individual = old-age1     
survivors1 & disability insurance z %[n 
by ! records ( ! ,commission]2  7#c7 a  
sep>ate e/imate ( ! aggregate ( !       
employ]1 employee1 & self-employm5t     
contributions ( ! eligible individual = 
hospital insurance z %[n by ! records ( 
! ,commission]2 &  7#d7 an e/imate ( !  
pot5tial mon?ly retirem5t1 disability1  

survivor1 & auxili>y b5efits payable on 
! eligible individual's acc\nt toge!r ) 
a description ( ! b5efits payable "u !  
,m$ic>e program ( title ,,xviii4  7c7   
,eligible individual ,= purposes ( ?is  
section1 ! t]m eligible individual means
 an individual :o-- 7#a7 has a social   
security acc\nt numb]1 &  7#b7 has wages
 or net e>n+s f self-employm5t4  4  7b7 
,effective date ,! am5dm5t made by      
subsection 7a7 %all apply ) respect to  
/atem5ts provid$ on or aft] ! fir/ day (
 ! fir/ cal5d> ye> beg9n+ aft] ! date ( 
enactm5t ( ?is ,act4