Bill > S1581

This bill creates Universal Savings Accounts (USAs), a new type of tax-advantaged savings account under the Internal Revenue Code. The bill allows individuals to contribute up to $10,000 annually in 2025, with that limit increasing by $500 each year and being adjusted for inflation after 2025, up to a maximum of $25,000 per year. Contributions must be in cash and can be made to a trust or custodial account managed by a bank or approved financial institution. Distributions from these accounts will generally be tax-free, except for any net income related to excess contributions. Account holders can make qualified rollover contributions between Universal Savings Accounts within 60 days of a distribution. If an account holder dies, the account can be transferred to a surviving spouse without tax consequences, or the account will be treated as fully distributed upon the account holder's death. The bill also establishes penalties for excess contributions and requires trustees to report account details to the Internal Revenue Service. The provisions of this bill would take effect for taxable years beginning after December 31, 2024, providing a new savings vehicle for individuals to invest and grow money with potential tax benefits.

Budget and Finance

https://www.congress.gov/bill/119th-congress/senate-bill/1581/all-info