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PSCA Executive Reports

November 30, 2018

Tax Legislation

On Monday, November 26, House Ways and Means Committee Chairman Kevin Brady (R-TX) released a tax bill that would make technical corrections to last year’s Tax Cuts and Jobs Act, renew a number of expired tax provisions, provide disaster relief, and make a series of retirement changes.

On the retirement front, the legislation appears to be a compromise between provisions found in Senator Hatch’s Retirement Enhancement and Savings Act (“RESA”; S. 2526), which was approved by the Senate Finance Committee unanimously in 2016 but has been bogged down by political disagreements since then, and the Brady-backed Family Savings Act (“FSA”; H.R. 6757), which passed the House this fall. Some key provisions contained in the compromise tax bill are:

  • the lifetime income disclosure requirement from RESA; 
  • the increase in the auto-enrollment safe harbor cap from RESA; 
  • the FSA provision on penalty-free withdrawals for birth or adoption of a child; and 
  • the FSA provision providing relief from required minimum distribution rules for account balances under $50,000 (and related reporting requirements). 

Although House Republicans may vote on the bill as soon as this week, it appears unlikely it will pass and be enacted during the lame-duck session before the new Congress convenes in January. Democrats, including Senate Finance Ranking Member Ron Wyden (D-OR), have given the legislation a cool reception, saying they were excluded from discussions, and take issue with certain tax extender and technical correction provisions. Instead, the bill likely will be used by Republicans as a starter for negotiations with Congressional Democrats on a possible tax package that potentially could be included in a must-pass spending bill to fund the remaining agencies and avoid a partial government shutdown on December 7. Negotiations on such a spending bill remain contentious, however, over President Trump’s demand for additional border wall funding.

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