A “House GOP Listening Session Framework” document, released by the Ways and Means Committee, hints at retirement savings provisions to be included in another round of tax reform legislation, referred to as “Tax Reform 2.0.” The document contains only broad, general descriptions, but many expect significantly more retirement savings provisions to be in the full legislative package when released.
Included in the document is a provision to create a “universal savings account,” a new tax-favored savings account that could be used for general purposes. Another provision would create a “new baby” early distribution exception. Amounts withdrawn from retirement savings arrangements when a new child is born to or adopted by parents with such accounts would not be subject to the 10 percent early distribution penalty tax. In addition, withdrawn amounts could be repaid under the legislation’s terms.
More details on this second round of tax cut legislation are expected to be released soon. Many feel, however, that passage in the Senate is less likely than in the House.