WASHINGTON – Senate Finance Committee Chairman Chuck Grassley of Iowa today praised the passage of the SECURE Act in the House of Representatives.
“The SECURE Act, which passed today in the House of Representatives and includes my Retirement Enhancement and Savings Act, takes an important step forward to help encourage and facilitate retirement savings. It also includes an important fix to eliminate unintended effects of the tax law on children with unearned income, such as Gold Star families and students who earn scholarships and grants,” Grassley said. “This legislation is an example of bipartisan cooperation to solve issues on behalf of Americans. I appreciate the hard work of my colleagues in the House and look forward to its quick passage in the Senate.”
The SECURE Act is legislation largely based on the Retirement Enhancement and Savings (RESA) Act of 2019, legislation Grassley introduced earlier this year with Ranking Member Ron Wyden of Oregon. Both bills share reform proposals to increase retirement savings in several ways, including:
Among its additions to RESA, the SECURE Act increases the age for taking required minimum distributions from 70½ to 72. It also includes proposals to require businesses offering retirement plans to cover certain part-time workers, allow penalty-free withdrawals from retirement accounts to cover birth and adoption expenses, expansion of 529 savings plans to cover apprenticeship programs and certain student loan payments and changes to help certain home health worker increase retirement-plan contributions.
Notably, the SECURE Act also includes an amendment that addresses unintended consequences of reforms to the “Kiddie Tax,” to ensure middle-class families with children receiving unearned income are not subject to tax rates intended to prevent wealthy parents from taking advantage of their child’s lower rate. This amendment applies broadly, but in particular will benefit families who have children with income from military survivor benefits, applicable Native American tribal payments, Alaska permanent fund dividends and certain scholarships and grants.
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