Amendment #658 to H4600

Aligning State and Federal IRA Contribution Rules

Representatives Jones of North Reading, Ferguson of Holden, Frost of Auburn, Gifford of Wareham, Barrows of Mansfield and Smola of Warren move to amend the bill by adding the following section:-

“SECTION X. Chapter 62 of the General Laws, as appearing in the 2022 Official Edition, is hereby amended in section 6 by adding the following subsection:-

(x) The amount allowable as a deduction under subsection (a) to any individual for any taxable year for an individual retirement account shall not exceed the lesser of--

(1) an amount equal to the compensation includible in the individual's gross income for such taxable year.

(2) Special rule for employer contributions under simplified employee pensions. This section shall not apply with respect to an employer contribution to a simplified employee pension.

(3) Plans under USC section 501(c)(18). Notwithstanding paragraph (1), the amount allowable as a deduction under subsection (a) with respect to any contributions on behalf of an employee to a plan described in section 501(c)(18) shall not exceed the lesser of--

(A) $7,000, or

(B) an amount equal to 25 percent of the compensation (as defined in section 415(c)(3)) includible in the individual's gross income for such taxable year.

(4) Special rule for simple retirement accounts. This section shall not apply with respect to any amount contributed to a simple retirement account established under section 408(p).

(5) Deduction amount. For purposes of paragraph (1)(A)--

(A) In general. The deductible amount is $5,000.

(B) Catch-up contributions for individuals 50 or older.

(i) In general. In the case of an individual who has attained the age of 50 before the close of the taxable year, the deductible amount for such taxable year shall be increased by the applicable amount.

(ii) Applicable amount. For purposes of clause (i), the applicable amount is $1,000."

Additional co-sponsor(s) added to Amendment #658 to H4600

Aligning State and Federal IRA Contribution Rules