This bill, also introduced in the Senate, would adjust the nonrefundable saver’s tax credit into a federal matching contribution for low to middle income American workers who contribute to an employer-sponsored plan or an IRA. More specifically, the saver’s tax credit would be replaced with a 50% government match for contributions to 401(k), 403(b) and 457(b) governmental plans as well as IRAs up to $2,000 per year. This would be applicable to single taxpayers earning up to $32,000 annually and couples earning up to $65,000 annually. The amount of the governmental match would phase out over the next $10,000 of income for individual taxpayers and $20,000 for couples. Additionally, a COVID-19 recovery bonus credit is included in the bill, which provides up to $5,000 in additional government matching contributions for the first $10,000 saved during a 5-year period, effective in 2022.
www.401kspecialist.com; July 26, 2021; www.benefitspro.com; August 1, 2021.