What does Preamble of Universal Savings Account Act of 2025 do?

This bill aims to amend the Internal Revenue Code of 1986 The amendment is to create Universal Savings Accounts

What does SHORT TITLE. of Universal Savings Account Act of 2025 do?

This bill is formally titled the Universal Savings Account Act of 2025

What does UNIVERSAL SAVINGS ACCOUNTS. of Universal Savings Account Act of 2025 do?

This section amends the Internal Revenue Code of 1986 to establish Universal Savings Accounts (USAs). USAs are trusts created for the exclusive benefit of an individual and are exempt from taxation under this subtitle, except for unrelated business income. Contributions to a USA are limited to $10,000, plus an adjustment based on the number of years after 2024, with a maximum limit of $25,000, subject to cost-of-living adjustments. The trustee must be a bank or another person demonstrating consistent administration, and the individual's interest in the account balance is nonforfeitable. Distributions from a USA are generally not includible in gross income, but may be if they relate to excess contributions. Upon the account holder's death, the account is treated differently depending on whether the surviving spouse acquires it. The section also imposes taxes and penalties related to excess contributions and prohibited transactions involving USAs. Trustees of USAs are required to make reports to the Secretary and the beneficiary.

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Universal Savings Account Act of 2025

Last updated: 5/5/2025 · Introduced: 5/5/2025

Author: Diana Harshbarger (R-TN)

TL;DR (AI)

This bill establishes Universal Savings Accounts (USAs), trusts exempt from taxation except for unrelated business income, allowing individuals to save up to $25,000 annually with adjustments for inflation.
Distributions from USAs are generally tax-free, though excess contributions may be subject to taxation.
The bill outlines requirements for USA trustees, including reporting obligations to the Secretary and mandates that an individual's interest in the account balance is nonforfeitable.

119th Congressin committeeS. 1581(In Committee)Official page

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Other Sections

Includes provisions on preamble, short title., and 1 more.

3 sections

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