,,ii  #aai? ,,congress  #b;d ,session   
,s4 #ddib  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,may #ab1 #bjbf,mr4    
,van ,holl5 7= himself1 ,mr4 ,moran1    
,ms4 ,klobu*>1 & ,mr4 ,tillis7 introduc$
 ! foll[+ bill2 :i* 0 read twice &      
ref]r$ to ! ,committee on ,f9ance  ,a   
,,bill  ,to am5d ! ,int]nal ,rev5ue     
,code ( #aihf to provide mat*+ paym5ts =
 ,,able acc\nt contributions by c]ta9   
individuals1 & = o!r purposes4  #a4     
,%ort title ,?is ,act may be cit$ z !   
,,able ,,mat* 7,mak+ ,able a ,tool to   
,combat ,h>d%ip7 ,act4  #b4 ,mat*+      
paym5ts = ,,able acc\nt contributions by
 c]ta9 individuals  7a7 ,9 g5]al        
,sub*apt] ,b ( *apt] #fe ( ! ,int]nal   
,rev5ue ,code ( #aihf is am5d$ by ins]t+
 aft] section #fdcc ! foll[+ new        
section3  #fdcc;,a4 ,mat*+ paym5ts =    
,,able acc\nt contributions by c]ta9    
individuals  7a7 ,9 g5]al  7#a7         
,all[ance ( mat* ,any individual :o is !
 designat$ b5efici>y ( an ,,able acc\nt 
z ( ! la/ day ( ! taxable ye> & :o makes

 qualifi$ ,,able acc\nt contributions = 
su* taxable ye> %all be all[$ a mat*+   
contribution = su* taxable ye> 9 an     
am\nt equal to ! applicable p]c5tage ( s
 mu* ( ! qualifi$ ,,able acc\nt         
contributions made by su* individual = !
 taxable ye> z does n exce$ #b1jjj4     
7#b7 ,paym5t ( mat*  7,a7 ,9 g5]al      
,except z provid$ 9 subp>agraph 7,b71 ! 
mat*+ contribution "u ?is section %all  
be all[$ z a cr$it :i* %all be payable  
by ! ,secret>y z a contribution 7z soon 
z practicable aft] ! individual has fil$
 a tax return mak+ a claim = su* mat*+  
contribution = ! taxable ye>7 to !      
,,able acc\nt ( ! individual4  7,b7     
,exception ,9 ! case ( an individual :o 
elects ! application ( ?is subp>agraph &
 ) respect to :om ! mat*+ contribution  
det]m9$ "u p>agraph 7#a7 is great] ?an  
z]o b less ?an #ej = ! taxable ye>1     
subp>agraph 7,a7 %all n apply & su*     
mat*+ contribution %all be treat$ z a   
cr$it all[$ by subp>t ,c ( "p ,,iv (    
sub*apt] ,a ( *apt] #a4  7b7 ,applicable

 p]c5tage ,= purposes ( ?is section--   
7#a7 ,9 g5]al ,except z provid$ 9       
p>agraph 7#b71 ! applicable p]c5tage is 
#ajj p]c5t4  7#b7 ,phase\t ,! p]c5tage  
"u p>agraph 7#a7 %all be r$uc$ 7b n bel[
 z]o7 by ! numb] ( p]c5tage po9ts :i*   
be>s ! same ratio to #ajj p]c5tage po9ts
 z-- 7,a7 ! excess (-- 7i7 ! taxpay]'s  
modifi$ adju/$ gross income = su*       
taxable ye>1 ov]  7ii7 ! applicable     
doll> am\nt1 be>s to  7,b7 #bj1jjj4  ,if
 any r$uction det]m9$ "u ?is p>agraph is
 n a :ole p]c5tage po9t1 su* r$uction   
%all be r\nd$ to ! next l[e/ :ole       
p]c5tage po9t4  7#c7 ,applicable doll>  
am\nt ,! applicable doll> am\nt is--    
7,a7 9 ! case ( a jo9t return1 #ef1jjj1 
7,b7 9 ! case ( a head ( h\sehold 7z    
def9$ 9 section #b7;b771 #c_/d ( ! am\nt
 applicable "u subp>agraph 7,a71 &  7,c7
 9 any o!r case1 #a_/b ( ! am\nt        
applicable "u subp>agraph 7,a74  7c7    
,qualifi$ ,,able acc\nt contributions ,=
 purposes ( ?is section-- 7#a7 ,9 g5]al 
,! t]m qualifi$ ,,able acc\nt           

contributions means1 ) respect to any   
taxable ye>1 ! am\nt ( contributions    
made by ! individual to ! ,,able acc\nt 
( :i* su* individual is ! designat$     
b5efici>y4 ,su* t]m %all n include any  
am\nt attributable to a paym5t "u       
subsection 7a77#b74  7#b7 ,r$uction =   
c]ta9 di/ributions  7,a7 ,9 g5]al ,!    
qualifi$ ,,able acc\nt contributions    
det]m9$ "u p>agraph 7#a7 = a taxable ye>
 %all be r$uc$ 7b n bel[ z]o7 by !      
aggregate di/ributions receiv$ by !     
individual dur+ ! te/+ p]iod f ! ,,able 
acc\nt4  7,b7 ,te/+ p]iod ,= purposes ( 
subp>agraph 7,a71 ! te/+ p]iod1 )       
respect to a taxable ye>1 is ! p]iod :i*
 includes-- 7i7 su* taxable ye>1  7ii7 !
 #b prec$+ taxable ye>s1 &  7iii7 !     
p]iod aft] su* taxable ye> & be=e ! due 
date 7includ+ ext5sions7 = fil+ ! return
 ( tax = su* taxable ye>4  7,c7 ,except$
 di/ributions ,!re %all n be tak5 into  
acc\nt "u subp>agraph 7,a7 ! am\nt (    
di/ributions "u a qualifi$ ,,able       
program 7)9 ! mean+ ( section #ebi;,a7 t

 is equal to am\nts n includ$ 9 gross   
income ) respect to su* di/ributions "u 
section #ebi;,a7c77#a77;,b7 7relat+ to  
di/ributions = qualifi$ disability      
exp5ses74  7,d7 ,treatm5t ( di/ributions
 receiv$ by sp\se ( individual ,=       
purposes ( det]m9+ di/ributions receiv$ 
by an individual "u subp>agraph 7,a7 =  
any taxable ye>1 any di/ribution receiv$
 by ! sp\se ( su* individual %all be    
treat$ z receiv$ by su* individual if   
su* individual & sp\se file a jo9t      
return = su* taxable ye> & = ! taxable  
ye> dur+ :i* ! sp\se receives !         
di/ribution4  7d7 ,,able acc\nt ,=      
purposes ( ?is section1 ! t]m ,,able    
acc\nt has ! mean+ giv5 su* t]m "u      
section #ebi;,a4  7e7 ,o!r def9itions & 
special rules  7#a7 ,modifi$ adju/$     
gross income ,= purposes ( ?is section1 
! t]m modifi$ adju/$ gross income means 
adju/$ gross income det]m9$ )\t reg>d to
 sections #iaa1 #ica1 & #icc4  7#b7     
,treatm5t ( contributions ,9 ! case (   
any contribution "u subsection 7a77#b71 

su* contribution %all n be tak5 into    
acc\nt ) respect to ! limitation "u     
section #ebi;,a7b77#b77;,b74  7#c7      
,errone\s cr$its  7,a7 ,9 g5]al ,if any 
contribution is errone\sly paid "u      
subsection 7a77#b71 includ+ a paym5t t  
is n made to an ,,able acc\nt1 ! am\nt (
 su* errone\s paym5t %all be treat$ z an
 und]paym5t ( tax 7o!r ?an = purposes ( 
"p ,,ii ( sub*apt] ,a ( *apt] #fh7 = !  
taxable ye> 9 :i* ! ,secret>y det]m9es !
 paym5t is errone\s4  7,b7 ,di/ribution 
( errone\s cr$its ,9 ! case ( a         
contribution to :i* subp>agraph 7,a7    
applies1 section #gb %all n apply to !  
di/ribution ( su* contribution 7& any   
income attributable !reto7 if su*       
di/ribution is receiv$ n lat] ?an ! day 
prescrib$ by law 7includ+ ext5sions (   
"t7 = fil+ ! individual's return = su*  
taxable ye>4  7#d7 ,exception f r$uction
 or (fset ,any paym5t made to any       
individual "u ?is section %all n be--   
7,a7 subject to r$uction or (fset       
pursuant to subsection 7c71 7d71 7e71 or

 7f7 ( section #fdjb or any simil>      
au?ority p]mitt+ (fset1 or  7,b7 r$uc$  
or (fset by o!r assess$ ,f$]al taxes t  
w\ld o!rwise be subject to levy or      
collection4  7#e7 ,election n to h      
section apply ,a taxpay] may elect n to 
h ?is section apply = any taxable ye>4  
7f7 ,inflation adju/m5ts  7#a7 ,9 g5]al 
,9 ! case ( any taxable ye> beg9n+ 9 a  
cal5d> ye> aft] #bjbg1 ! #ef1jjj am\nt 9
 subsection 7b77#c77;,a7 %all be        
increas$ by an am\nt equal to-- 7,a7 su*
 doll> am\nt1 multipli$ by  7,b7 !      
co/-(-liv+ adju/m5t det]m9$ "u section  
#a7;f77#c7 = ! cal5d> ye> 9 :i* !       
taxable ye> beg9s1 det]m9$ by sub/itut+ 
cal5d> ye> #bjbf = cal5d> ye> #bjaf 9   
subp>agraph 7,a77ii7 !re(4  7#b7 ,r\nd+ 
,any increase det]m9$ "u p>agraph 7#a7  
%all be r\nd$ to ! ne>e/ multiple (     
#a1jjj4  4  7b7 ,treatm5t ( ,c]ta9      
,possessions  7#a7 ,paym5ts to          
possessions ) mirror code tax sy/ems ,! 
,secret>y ( ! ,treasury %all pay to ea* 
possession ( ! ,unit$ ,/ates :i* has a  

mirror code tax sy/em am\nts equal to ! 
loss 7if any7 to t possession by reason 
( ! am5dm5ts made by ?is section4 ,su*  
am\nts %all be det]m9$ by ! ,secret>y ( 
! ,treasury bas$ on in=mation provid$ by
 ! gov]nm5t ( ! respective possession4  
7#b7 ,paym5ts to o!r possessions ,!     
,secret>y ( ! ,treasury %all pay to ea* 
possession ( ! ,unit$ ,/ates :i* does n 
h a mirror code tax sy/em am\nts e/imat$
 by ! ,secret>y ( ! ,treasury z be+     
equal to ! aggregate b5efits 7if any7 t 
w\ld h be5 provid$ to resid5ts ( su*    
possession by reason ( ! am5dm5ts made  
by ?is section if a mirror code tax     
sy/em _h be5 9 effect 9 su* possession4 
,! prec$+ s5t5ce %all n apply unless !  
respective possession has a plan1 :i*   
has be5 approv$ by ! ,secret>y ( !      
,treasury1 "u :i* su* possession w      
promptly di/ribute su* paym5ts to its   
resid5ts4  7#c7 ,coord9ation ) cr$it    
all[$ aga9/ ,unit$ ,/ates income taxes  
,no cr$it %all be all[$ aga9/ ,unit$    
,/ates income taxes "u section #fdcc;,a 

( ! ,int]nal ,rev5ue ,code ( #aihf 7z   
add$ by ?is section7 to any p]son-- 7,a7
 to :om a cr$it is all[$ aga9/ taxes    
impos$ by ! possession by reason ( !    
am5dm5ts made by ?is section1 or  7,b7  
:o is eligible = a paym5t "u a plan     
describ$ 9 p>agraph 7#b74  7#d7 ,mirror 
code tax sy/em ,= purposes ( ?is        
subsection1 ! t]m mirror code tax sy/em 
means1 ) respect to any possession ( !  
,unit$ ,/ates1 ! income tax sy/em ( su* 
possession if ! income tax liability ( !
 resid5ts ( su* possession "u su* sy/em 
is det]m9$ by ref]5ce to ! income tax   
laws ( ! ,unit$ ,/ates z if su*         
possession 7 ! ,unit$ ,/ates4  7#e7     
,treatm5t ( paym5ts ,= purposes (       
section #acbd ( title #ca1 ,unit$ ,/ates
 ,code1 ! paym5ts "u ?is subsection %all
 be treat$ 9 ! same mann] z a refund due
 f a cr$it provision ref]r$ to 9        
subsection 7b77#b7 ( su* section4  7c7  
,coord9ation ) sav]s' cr$it ,section    
#be;,b7c77#a7 ( ! ,int]nal ,rev5ue ,code
 ( #aihf is am5d$ by ins]t+ & su*       

individual has made an election "u      
section #fdcc;,a7e77#e7 n to h section  
#fdcc;,a apply = su* taxable ye> be=e ! 
p]iod at ! end4  7d7 ,defici5cies       
,section #fbaa7;b77#d7 ( ! ,int]nal     
,rev5ue ,code ( #aihf is am5d$ by /rik+ 
& #fdcc & ins]t+ #fdcc1 & #fdcc;,a4  7e7
 ,paym5t au?ority ,section #acbd7;b77#b7
 ( title #ca1 ,unit$ ,/ates ,code1 is   
am5d$ by /rik+ or #fdcc & ins]t+ #fdcc1 
or #fdcc;,a4  7f7 ,cl]ical am5dm5t ,!   
table ( sections = sub*apt] ,b ( *apt]  
#fe ( ! ,int]nal ,rev5ue ,code ( #aihf  
is am5d$ by ins]t+ aft] ! item relat+ to
 section #fdcc ! foll[+ new item3  ,sec4
 #fdcc;,a4 ,mat*+ paym5ts = ,,able      
acc\nt contributions by c]ta9           
individuals4  4  7g7 ,effective date ,! 
am5dm5ts made by ?is section %all apply 
to taxable ye>s beg9n+ aft] ,decemb]    
#ca1 #bjbf4  #c4 ,demographic report+ ) 
respect to ,,able acc\nts  7a7 ,9 g5]al 
,section #ebi;,a7d77#a7 ( ! ,int]nal    
,rev5ue ,code ( #aihf is am5d$ by add+  
at ! end ! foll[+ new s5t5ce3 ,9        

addition to ! in=mation requir$ "u !    
prec$+ s5t5ce1 ea* (fic] or employee    
hav+ control ( ! qualifi$ ,,able program
 ( _! designee %all include 9 reports   
provid$ to ! ,secret>y demographic      
in=mation 7includ+ race1 g5d]1 &        
disability type7 relat+ to ! designat$  
b5efici>ies ( ,,able acc\nts "u !       
program44  7b7 ,effective date ,!       
am5dm5t made by ?is section %all apply  
to reports made aft] ! date ( ! enactm5t
 ( ?is section4  #d4 ,grants to promote 
use ( ,,able acc\nts & ! mat*+          
contribution cr$it  7a7 ,9 g5]al ,!     
,secret>y ( ! ,treasury 7or !           
,secret>y's delegate7 may aw>d grants to
 ,/ates to enable ,/ates to promote     
,,able acc\nts 7z def9$ 9 section       
#ebi;,a7e7 ( ! ,int]nal ,rev5ue ,code ( 
#aihf7 & mat*+ paym5ts = contributions  
to su* acc\nts 7z provid$ "u section    
#fdcc;,a ( su* ,code1 z add$ by ?is     
,act74  7b7 ,au?orization (             
appropriations ,!re is au?oriz$ to be   
appropriat$ to c>ry out ?is section     

#e1jjj1jjj = ea* ( fiscal ye>s #bjbg    
?r\gh #bjcj4