The House Education & Labor Committee on April 5th approved the “Protecting America’s Retirement Security Act” that provides certain taxpayers the opportunity to deposit part of their tax refunds into savings accounts.
As explained by the Committee:
This section, which is based on the bipartisan H.R. 4986, the Refund to Rainy Day Savings Act (Reps. Watson Coleman and Hill), is intended to encourage more people to build emergency savings. Tax filers receiving a direct 2 deposit tax refund will be allowed to defer 20% of their refund by opting into the Rainy Day Savings Program on their 1040 tax form. These savings will accumulate interest in a Treasury-held account before being transferred to the tax filer’s direct deposit account six months later. This section also includes a five-year reauthorization of the Assets for Independence (AFI) Act, which is a grant program sponsored by the Department of Health and Human Services (HHS) to help low-income families build assets through savings accounts. This section authorizes $25 million for the AFI Act each year of its five-year reauthorization.
The Committee’s approval of this bill comes on the heels of the House approving far-reaching retirement legislation that is now in the Senate.
Next Steps:
The House is expected to pass this bill, but the timing on this vote is unclear. The chamber is expected to recess for two-weeks at the end of the week and a vote on this legislation before that break could be hard to achieve.
Upon House approval, the legislation will go to the Senate where its fate on passage is not clear.
A summary of the bill is here.
The legislative text is here.