Sec. 201. Tax treatment of SAVE UP Accounts
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Subpart A of part I of subchapter D of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 408A the following new section: For purposes of this title, except as otherwise provided in this section— the SAVE UP Accounts Fund shall be treated as a trust described in section 401(a) which is exempt from taxation under section 501(a) and a SAVE UP Account shall be treated as a defined contribution plan which includes such a trust, any contribution to, or distribution from, the SAVE UP Accounts Fund under a SAVE UP Account contribution program shall be treated in the same manner as contributions to or distributions from such a trust, and contributions to a SAVE UP Account under a SAVE UP Account contribution program shall not be treated as distributed or made available to the employee or as contributions made by the employee merely because the employee has, under such program, an election whether the contribution will be made to the trust or received by the employee in cash.
A SAVE UP Account contribution program is not subject to the participation and nondiscrimination requirements applicable to arrangements described in section 401(k) or to matching contributions (as described in section 401(m)). An eligible rollover distribution (as defined in section 402(c)(4)) shall not include any amount distributed from a SAVE UP Account. Section 72(p)(2)(A) shall only apply with respect to a SAVE UP Account to the extent that any loan (when added to the outstanding balance of all other loans from such plan) does not exceed the lesser of— $2,500, or the total nonforfeitable amounts credited to the individual’s SAVE UP Account.
A loan from a SAVE UP Account shall not fail to be treated as a loan described in section 72(p)(2)(B) (relating to requirement that loan be repayable in 5 years) solely because the loan terms allow additional time (not to exceed an aggregate of 1 year) for repayment to account for any periods of unemployment. For purposes of this section, the terms SAVE UP Accounts Fund , SAVE UP Account , and SAVE UP Account contribution program shall have the respective meanings as when used in title I of the SAVE UP Act . .
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(3)of section 402(g) of such Code is amended by striking and at the end of subparagraph (C), by striking the period at the end of subparagraph
(D)and inserting , and , and by adding at the end the following new subparagraph: any elective employer contribution under a SAVE UP Account contribution program (as defined in section 408B). . The table of sections for subpart A of part I of subchapter D of chapter 1 of such Code is amended by inserting after the item relating to section 409A the following new section: 408C. Tax treatment of SAVE UP Accounts. . The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.