H.R.9813

“(a) General rule.—Notwithstanding any other provision of this title, in the case of an individual who is an applicable taxpayer for any taxable year, no applicable annual contributions for such taxable year shall be made by, or on behalf of, such individual to any individual retirement plan to the extent such applicable annual contributions exceed the excess (if any) of—

“(1) the applicable dollar amount for such taxable year, over

“(2) the aggregate vested balances to the credit of the individual (whether as a participant, owner, or beneficiary) in all applicable retirement plans (determined as of the close of the calendar year preceding the calendar year in which such taxable year begins).

“(b) Definitions and special rules.—For purposes of this section—

“(1) APPLICABLE ANNUAL CONTRIBUTION.—

“(A) IN GENERAL.—Except as provided in this paragraph, the term ‘applicable annual contribution’ means any contribution to an individual retirement plan.

“(B) CONTRIBUTIONS TO SEP AND SIMPLE PLANS.—In the case of any employer or employee contributions by, or on behalf of, an individual to a simplified employee pension under section 408(k) or a simple retirement account under section 408(p)—

“(i) such contributions shall not be treated as applicable annual contributions for purposes of applying the limitation under subsection (a), but

“(ii) the excess described in subsection (a) shall be reduced by the amount of such contributions in applying such limitation to other applicable annual contributions with respect to such individual.

“(C) ROLLOVER CONTRIBUTIONS DISREGARDED.—A rollover contribution under section 402(c), 403(a)(4), 403(b)(8), 408(d)(3), 457(e)(16), or 529(c)(3)(E) shall not be treated as an applicable annual contribution.

“(D) ACCOUNTS ACQUIRED BY DEATH OR DIVORCE OR SEPARATION.—The acquisition of an individual retirement plan (or the transfer to or contribution of amounts to an individual retirement plan) by reason of—

“(i) the death of another individual, or

“(ii) divorce or separation (pursuant to section 408(d)(6)),

“(2) APPLICABLE DOLLAR AMOUNT.—The term ‘applicable dollar amount’ means $10,000,000.

“(3) APPLICABLE RETIREMENT PLAN.—The term ‘applicable retirement plan’ means—

“(A) a defined contribution plan to which section 401(a) or 403(a) applies,

“(B) an annuity contract under section 403(b),

“(C) an eligible deferred compensation plan described in section 457(b) which is maintained by an eligible employer described in section 457(e)(1)(A), or

“(D) an individual retirement plan.

“(4) APPLICABLE TAXPAYER.—

“(A) IN GENERAL.—The term ‘applicable taxpayer’ means, with respect to any taxable year, a taxpayer whose modified adjusted gross income for the preceding taxable year exceeds the amount determined under subparagraph (B).

“(B) DOLLAR LIMIT.—The amount determined under this subparagraph for any taxable year is—

“(i) $225,000 for a married individual not filing a joint return,

“(ii) $425,000 in the case of an individual who is a head of household (as defined in section 2(b)),

“(iii) $450,000 in the case of an individual who is a married individual filing a joint return or a surviving spouse (as defined in section 2(a)), and

“(iv) $400,000 in any other case.

“(C) MODIFIED ADJUSTED GROSS INCOME.—For purposes of this paragraph, the term ‘modified adjusted gross income’ means adjusted gross income determined without regard to sections 911, 931, and 933, without regard to any deduction for applicable annual contributions to individual retirement plans to which subsection (a) applies, and without regard to any increase in minimum required distributions by reason of section 4974(f).

“(5) ADJUSTMENTS FOR INFLATION.—

“(A) IN GENERAL.—In the case of any taxable year beginning after 2027, each of the dollar amounts in paragraphs (2) and (4)(B) shall be increased by an amount equal to the product of—

“(i) such dollar amount, and

“(ii) the cost-of-living adjustment under section 1(f)(3) for the calendar year in which such taxable year begins, determined by substituting ‘calendar year 2026’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.

“(B) ROUNDING.—If any amount as adjusted under subparagraph (A) is not—

“(i) in the case of the dollar amount under paragraph (2), a multiple of $250,000, such amount shall be rounded to the next lowest multiple of $250,000, and

“(ii) in the case of a dollar amount under paragraph (4)(B), a multiple of $1,000, such amount shall be rounded to the next lowest multiple of $1,000.

“(c) Regulations.—The Secretary shall prescribe such regulations and guidance as are necessary or appropriate to carry out the purposes of this section, including regulations or guidance that provide for the application of this section and section 4974(f) in the case of plans with a valuation date other than the last day of a calendar year.”.

“(3) For additional limitations on contributions to individual retirement plans with large account balances, see section 409B.”.

“(i) Special rule for individual retirement plans with excess applicable annual contributions.—For purposes of this section, in the case of individual retirement plans, the excess contributions otherwise determined under this section with respect to any taxable year shall be increased by the sum of—

“(1) the excess of the applicable annual contributions (within the meaning of section 409B(b)(1)) to such plans over the limitation under section 409B(a) for such taxable year, reduced by the amount of any excess contributions determined under subsections (b) and (f), and

“(2) the lesser of—

“(A) the amount determined under this subsection for the preceding taxable year with respect to such plans, reduced by the aggregate distributions from such plans for the taxable year (including distributions required under section 4974(f)) to the extent not contributed in a rollover contribution to another eligible retirement plan in accordance with section 402(c), 403(a)(4), 403(b)(8), 408(d)(3), and 457(e)(16), or

“(B) the amount (if any) by which the amount determined under section 409B(a)(2) for the taxable year exceeds the applicable dollar amount under section 409B(b)(2) for the taxable year.”.