119-hr3186

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3186 Introduced in House

    (IH) ]

<DOC>

119th CONGRESS
 1st Session
 H. R. 3186

To amend the Internal Revenue Code of 1986 to create Universal Savings 
 Accounts.

_______________________________________________________________________

 IN THE HOUSE OF REPRESENTATIVES

 May 5, 2025

 Mrs. Harshbarger introduced the following bill; which was referred to 
 the Committee on Ways and Means

_______________________________________________________________________

 A BILL

To amend the Internal Revenue Code of 1986 to create Universal Savings 
 Accounts.

 Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

 This Act may be cited as the ``Universal Savings Account Act of 
2025''.

SEC. 2. UNIVERSAL SAVINGS ACCOUNTS.

    (a) In General.--Subchapter F of Chapter 1 of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new part:

 ``PART IX--UNIVERSAL SAVINGS ACCOUNTS

``

SEC. 530A. UNIVERSAL SAVINGS ACCOUNTS.

 ``

    (a) General Rule.--A Universal Savings Account shall be exempt 
from taxation under this subtitle. Notwithstanding the preceding 
sentence, such account shall be subject to the taxes imposed by 

section 511 (relating to imposition of tax on unrelated business income of 
charitable organizations).
 ``

    (b) Universal Savings Account.--For purposes of this section, the 
term `Universal Savings Account' means a trust created or organized in 
the United States for the exclusive benefit of an individual and which 
is designated (in such manner as the Secretary shall prescribe) at the 
time of the establishment of the trust as a Universal Savings Account, 
but only if the written governing instrument creating the trust meets 
the following requirements:
 ``

    (1) Except in the case of a qualified rollover 
 contribution described in subsection
            (d) --
 ``
        (A) no contribution will be accepted unless it is 
 in cash, and
 ``
        (B) contributions will not be accepted for the 
 calendar year in excess of the contribution limit 
 specified in subsection
            (c) (1) .
 ``

    (2) The trustee is a bank (as defined in 

section 408

    (n) ) 
 or another person who demonstrates to the satisfaction of the 
 Secretary that the manner in which that person will administer 
 the trust will be consistent with the requirements of this 
 section or who has so demonstrated with respect to any 
 individual retirement plan.
 ``

    (3) The interest of an individual in the balance of his 
 account is nonforfeitable.
 ``

    (4) The assets of the trust shall not be commingled with 
 other property except in a common trust fund or common 
 investment fund.
 ``

    (5) No part of the trust funds will be invested in life 
 insurance contracts.
 ``
            (c) Treatment of Contributions and Distributions.--
 ``

    (1) Contribution limit.--
 ``
        (A) In general.--The aggregate amount of 
 contributions (other than qualified rollover 
 contributions described in subsection
            (d) ) for any 
 calendar year to all Universal Savings Accounts 
 maintained for the benefit of an individual shall not 
 exceed the sum of--
 ``
            (i) $10,000, plus
 ``
            (ii) the product of--
 ``
            (I) $500, and
 ``
            (II) the number of calendar years 
 after 2024 and before such calendar 
 year, plus
 ``
            (iii) in the case of any calendar year 
 after 2025, the product of--
 ``
            (I) the sum of the amount in 
 clauses
            (i) and
            (ii) for such calendar 
 year, multiplied by
 ``
            (II) the cost-of-living 
 adjustment determined under 

section 1

    (f)

    (3) for the calendar year, 
 determined by substituting `calendar 
 year 2024' for `calendar year 2016' in 
 subparagraph
        (A)
            (ii) thereof.
 If any increase under clause
            (iii) is not a 
 multiple of $100, such amount shall be rounded 
 to the next lower multiple of $100.
 ``
        (B) Limitation.--
 ``
            (i) In general.--The amount determined 
 under subparagraph
        (A) for any calendar year 
 shall not exceed $25,000.
 ``
            (ii) Inflation adjustment.--In the case 
 of any calendar year after 2025, the $25,000 
 amount under clause
            (i) shall be increased by 
 an amount equal to--
 ``
            (I) such dollar amount, 
 multiplied by
 ``
            (II) the cost-of-living 
 adjustment determined under 

section 1

    (f)

    (3) for the calendar year, 
 determined by substituting `calendar 
 year 2024' for `calendar year 2016' in 
 subparagraph
        (A)
            (ii) thereof.
 If any increase under this clause is not a 
 multiple of $100, such amount shall be rounded 
 to the next lower multiple of $100.
 ``

    (2) Distributions.--
 ``
        (A) In general.--Except as provided in 
 subparagraph
        (B) , any distribution from a Universal 
 Savings Account shall not be includible in gross 
 income.
 ``
        (B) Net income attributable to excess 
 contributions.--Any distribution of net income 
 described in 

section 4973
            (i) (2) shall be includible in 
 the gross income of the account holder in the taxable 
 year in which the contribution to which such net income 
 relates was made.
 ``
            (d) Qualified Rollover Contribution.--For purposes of this 
section, the term `qualified rollover contribution' means a 
contribution to a Universal Savings Account from another such account 
of the same beneficiary, but only if such amount is contributed not 
later than the 60th day after the distribution from such other account.
 ``

    (e) Treatment of Account Upon Death.--Upon death of any account 
holder of a Universal Savings Account--
 ``

    (1) Spouse.--In the case of the account holder's 
 surviving spouse acquiring such account holder's interest in 
 such account by reason of the death of the account holder, such 
 account shall be treated as if the spouse were the account 
 holder.
 ``

    (2) Other cases.--In any other case--
 ``
        (A) all amounts in such account shall be treated 
 as distributed on the date of such individual's death, 
 and
 ``
        (B) such account shall cease to be treated as a 
 Universal Savings Account.
 ``

    (f) Custodial Accounts.--For purposes of this section, a 
custodial account shall be treated as a trust under this section if the 
assets of such account are held by a bank (as defined in 

section 408

    (n) ) or another person who demonstrates, to the satisfaction of the 
Secretary, that the manner in which he will administer the account will 
be consistent with the requirements of this section, and if the 
custodial account would, except for the fact that it is not a trust, 
constitute a trust which meets the requirements of subsection

    (b) . For 
purposes of this title, in the case of a custodial account treated as a 
trust by reason of the preceding sentence, the custodian of such 
account shall be treated as the trustee thereof.
 ``

    (g) Reports.--The trustee of a Universal Savings Account shall 
make such reports regarding such account to the Secretary and to the 
beneficiary of the account with respect to contributions, 
distributions, and such other matters as the Secretary may require. The 
reports required by this subsection shall be filed at such time and in 
such manner and furnished to such individuals at such time and in such 
manner as may be required.''.

    (b) Tax on Excess Contributions.--

    (1) In general.--

Section 4973

    (a) is amended by striking 
 ``or'' at the end of paragraph

    (5) , by inserting ``or'' at the 
 end of paragraph

    (6) , and by inserting after paragraph

    (6) the 
 following new paragraph:
 ``

    (7) a Universal Savings Account (as defined in 

section 530U),''.

    (2) Excess contribution.--

Section 4973 is amended by adding 
 at the end the following new subsection:
 ``
            (i) Excess Contributions to Universal Savings Accounts.--For 
purposes of this section--
 ``

    (1) In general.--In the case of Universal Savings 
 Accounts (within the meaning of 

section 530U), the term `excess 
 contributions' means the sum of--
 ``
        (A) the amount (if any) by which the amount 
 contributed for the taxable year to such accounts 
 (other than qualified rollover contributions (as 
 defined in 

section 530U
            (d) )) exceeds the contribution 
 limit under 

section 530U
            (c) (2) for such taxable year, 
 and
 ``
        (B) the amount determined under this subsection 
 for the preceding taxable year, reduced by the sum of--
 ``
            (i) the distributions out of the account 
 for the taxable year, and
 ``
            (ii) the amount (if any) by which the 
 maximum amount allowable as a contribution 
 under 

section 530U
            (c) (2) for the taxable year 
 exceeds the amount contributed to the accounts 
 for the taxable year.
 ``

    (2) Special rule.--A contribution shall not be taken into 
 account under paragraph

    (1) if such contribution (together with 
 the amount of net income attributable to such contribution) is 
 distributed to the account holder on or before the due date of 
 the account holder's return of tax for such taxable year.''.
            (c) Tax on Excess Contributions.--

    (1) In general.--Subsection

    (a) of 

section 4973 of the 
 Internal Revenue Code of 1986 is amended by striking ``or'' at 
 the end of paragraph

    (5) , by inserting ``or'' at the end of 
 paragraph

    (6) , and by inserting after paragraph

    (6) the 
 following new paragraph:
 ``

    (7) a Universal Savings Account (as defined in 

section 530A),''.

    (2) Excess contribution.--

Section 4973 of such Code is 
 amended by adding at the end the following new subsection:
 ``
            (i) Excess Contributions to Universal Savings Accounts.--For 
purposes of this section--
 ``

    (1) In general.--In the case of Universal Savings 
 Accounts (within the meaning of 

section 530A), the term `excess 
 contributions' means the sum of--
 ``
        (A) the amount (if any) by which the amount 
 contributed for the taxable year to such accounts 
 (other than qualified rollover contributions (as 
 defined in 

section 530A
            (d) )) exceeds the contribution 
 limit under 

section 530A
            (c) (1) for such taxable year, 
 and
 ``
        (B) the amount determined under this subsection 
 for the preceding taxable year, reduced by the sum of--
 ``
            (i) the distributions out of the account 
 for the taxable year, and
 ``
            (ii) the amount (if any) by which the 
 maximum amount allowable as a contribution 
 under 

section 530A
            (c) (1) for the taxable year 
 exceeds the amount contributed to the accounts 
 for the taxable year.
 ``

    (2) Special rule.--A contribution shall not be taken into 
 account under paragraph

    (1) if such contribution (together with 
 the amount of net income attributable to such contribution) is 
 distributed to the account holder on or before the due date of 
 the account holder's return of tax for such taxable year.''.
            (d) Tax on Prohibited Transactions.--

Section 4975

    (e)

    (1) of the 
Internal Revenue Code of 1986 is amended by striking ``or'' at the end 
of subparagraph
        (F) , by striking the period at the end of subparagraph
        (G) and inserting ``, or'', and by adding at the end the following new 
subparagraph:
 ``
        (H) a Universal Savings Account (as defined in 
 

section 530A).''.

    (e) Failure To Provide Reports on Universal Savings Accounts.--
Paragraph

    (2) of 

section 6693

    (a) of the Internal Revenue Code of 1986 
is amended by striking ``and'' at the end of subparagraph
        (E) , by 
striking the period at the end of subparagraph
        (F) and inserting ``, 
and'', and by adding at the end the following new subparagraph:
 ``
        (G) section 530A

    (g) (relating to Universal 
 Savings Accounts).''.

    (f) Conforming Amendment.--The table of parts for subchapter F of 
chapter 1 of the Internal Revenue Code of 1986 is amended by adding at 
the end the following new item:

 ``Part IX. Universal Savings Accounts''.

    (g) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2024.
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