Sec. 4. USAccounts
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The Executive Director shall establish in the USAccount Fund an account (to be known as a USAccount ) for each qualifying account holder certified under subsection (b). Each such account shall be identified to its account holder by means of a unique personal identifier currently recognized by the Internal Revenue Service and shall remain in the USAccount Fund unless transferred to private management under subsection (g). The balance in an account holder’s USAccount at any time is the excess of— the sum of— all deposits made into the USAccount Fund and credited to the account under paragraph (3), and the total amount of allocations made to and reductions made in the account pursuant to paragraph (4), over the amounts paid out of the account with respect to such individual under subsection (d).
Pursuant to regulations which shall be prescribed by the Executive Director, the Executive Director shall credit to each USAccount the amounts paid into the USAccount Fund under section 3(d) which are attributable to the account holder of such account. The Executive Director shall allocate to each USAccount an amount equal to the net earnings and net losses from each investment of sums in the USAccount Fund which are attributable, on a pro rata basis, to sums credited to such account, reduced by an appropriate share of the administrative expenses paid out of the net earnings, as determined by the Executive Director.
For purposes of this Act— The term qualifying account holder means any individual who— was born after December 31, 2017, has not yet attained the age of 18 years, and has a valid, unique, Federal Government issued identification number recognized by the Internal Revenue Service. On the date on which a qualifying account holder is registered for a USAccount, the Secretary shall certify to the Executive Director the name of such qualifying account holder. The Executive Director shall accept cash contributions from any person (including churches, charities, private foundations, businesses, or civic leagues) for payment into the USAccount Fund if such contribution is identified (in such manner as the Executive Director may require) with the account holder of a USAccount to whom it is to be credited at the time the contribution is made.
Under regulations prescribed by the Executive Director and at the election of the employer, contributions under paragraph
(1)may be made through payroll deductions. Under regulations prescribed by the Secretary, contributions under paragraph
(1)may be made by an election to contribute all or a portion of the tax refund of the contributor. No contribution may be accepted under paragraph (1)— unless it is in cash, after the date on which the USAccount holder ceases to be a qualifying account holder, and except in the case of matching contributions under subsection (d), if such contribution would result in aggregate contributions for the calendar year exceeding $2,000. Upon such showing as the Executive Director may require to establish the basis for certification, the Executive Director shall, with respect to each private contribution to the account of an account holder which is made before such account holder attains age 18, certify to the Secretary the matching amount with respect to such contribution. For purposes of this subsection, the term matching amount means, an amount equal to 100 percent of contributions made by the account holder (or a legal guardian of the account holder) to the USAccount of an individual during any calendar year beginning after the calendar year in which the USAccount is established, not in excess of $500 for the calendar year. The $500 amount in subparagraph
(A)shall be zero if the adjusted gross income (or, if greater, the earned income) of the taxpayer for the taxable year as exceeds the phaseout amount. For purposes of this paragraph, terms used in the preceding sentence which are used in section 32 of the Internal Revenue Code of 1986 shall have the meanings given such terms by such section 32. No amount may be distributed from a USAccount before the date on which the account holder attains the age of 18. Paragraph
(1)shall not apply to amounts paid for qualified tuition and related expenses (as defined in section 25A(f)(1) of the Internal Revenue Code of 1986) of the account holder if the account holder is an eligible student (as defined in section 25A(b)(3) of such Code) with respect to such expenses. Not later than 180 days after the date on which the account holder attains the age of 18, the balance of such individual’s account shall be transferred to a USAccount IRA established on behalf of the individual and shall be treated as a rollover contribution which meets the requirements of section 408(d)(3) of such Code. SA ccount IRA Except as provided in clauses
(ii)and (iii), a USAccount IRA is an individual retirement account (as defined in section 7701(a)(37) of such Code) which is established by the Executive Director and designated at the time of the establishment of the account as a USAccount IRA. No amount may be distributed from a USAccount IRA to an account holder or other beneficiary earlier than the account holder attains the age of 59 1/2 , except— distributions which are made to a beneficiary (or to the estate of the account holder) upon death of the account holder, distributions described in paragraph (2), qualified first-time homebuyer distributions (as defined in section 72(t)(8) of such Code), distributions for qualified medical expenses, any distribution which would not be includible in gross income if made from a qualified ABLE program (as defined in section 529A(b) of such Code) with respect to the account holder or a member of the family (as defined in section 529A(e)(4)) of the account holder, any distribution used to prevent foreclosure on the principal residence of the account holder, and any distribution used to start a small business. Any distribution described in subclauses
(I)through
(VII)shall not be included in gross income. No amounts may be rolled over from a USAccount IRA. Until the account holder of a USAccount attains age 18, any rights or duties of the account holder under this Act with respect to such account shall be exercised or performed by the legal guardian of such account holder. The account holder of a USAccount may elect, under regulations prescribed by the Secretary, to transfer the USAccount to a trustee who meets the requirements of paragraph (2). A trustee meets the requirements of this paragraph if 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 USAccount will be consistent with the requirements of this Act or who has so demonstrated with respect to any USAccount, agrees to a reasonable cap on its fees and costs, as determined by the Treasury, for the management of USAccounts, provides an investment fund that maximizes growth over time while minimizing risk, and provides the safeguards with respect to USAccounts required by the Secretary. For purposes of this subsection, rules similar to the rules of paragraphs (3), (4), and
(5)of section 408 of the Internal Revenue Code of 1986 shall apply. For each calendar year beginning after 2015, the dollar amounts under sections 3(e)(1), 4(c)(3)(C), and 4(d)(2) shall each be increased by such dollar amount multiplied by the cost-of-living adjustment determined under section 1(f)(3) of the Internal Revenue Code of 1986 determined by substituting calendar year 2014 for calendar year 1992 in subparagraph
(B)thereof. If any amount adjusted under paragraph
(1)is not a multiple of $50, such amount shall be rounded to the next lowest multiple of $50.