I
118THCONGRESS
1
STSESSION H. R. 312
To amend the Internal Revenue Code of 1986 to provide emergency savings
accounts for individuals.
IN THE HOUSE OF REPRESENTATIVES
JANUARY12, 2023
Mr. C
LOUDintroduced the following bill; which was referred to the Committee
on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to provide
emergency savings accounts for individuals.
Be it enacted by the Senate and House of Representa-1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE. 3
This Act may be cited as the ‘‘Emergency Savings 4
Accounts Act of 2023’’. 5
SEC. 2. DEDUCTION FOR CONTRIBUTIONS TO EMERGENCY 6
SAVINGS ACCOUNTS. 7
(a) I
NGENERAL.—Part VII of subchapter B of chap-8
ter 1 of the Internal Revenue Code of 1986 (relating to 9
additional itemized deductions for individuals) is amended 10
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by redesignating section 224 as section 225 and by insert-1
ing after section 223 the following new section: 2
‘‘SEC. 224. EMERGENCY SAVINGS ACCOUNTS. 3
‘‘(a) D
EDUCTIONALLOWED.—In the case of a eligi-4
ble individual, there shall be allowed as a deduction for 5
the taxable year an amount equal to the aggregate amount 6
paid during such taxable year by or on behalf of such indi-7
vidual to an emergency savings account of such individual. 8
‘‘(b) L
IMITATION.— 9
‘‘(1) I
N GENERAL.—The amount allowed as a 10
deduction under subsection (a) to an individual for 11
the taxable year shall not exceed $5,000. 12
‘‘(2) P
ARTIAL YEAR OF ELIGIBILITY .—In the 13
case of an individual who is an eligible individual for 14
only a portion of the taxable year, the limitation 15
under paragraph (1) shall be same proportion of 16
$5,000 as such portion bears to the entire taxable 17
year. 18
‘‘(c) E
LIGIBLEINDIVIDUAL.—For purposes of this 19
section, the term ‘eligible individual’ means any individual 20
if such individual occupied any residence in the United 21
States at any time during the taxable year. 22
‘‘(d) E
MERGENCYSAVINGSACCOUNT.—For purposes 23
of this section— 24
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‘‘(1) IN GENERAL.—The term ‘emergency sav-1
ings account’ means a trust created or organized in 2
the United States as an emergency savings account 3
exclusively for the purpose of paying the qualified 4
disaster and public health emergency expenses of the 5
account beneficiary, but only if the written governing 6
instrument creating the trust meets the following re-7
quirements: 8
‘‘(A) Except in the case of a rollover con-9
tribution described in subsection (f)(5), no con-10
tribution will be accepted— 11
‘‘(i) unless it is in cash, or 12
‘‘(ii) to the extent such contribution, 13
when added to previous contributions to 14
the trust for the calendar year, exceeds the 15
dollar limitation in effect under subsection 16
(b). 17
‘‘(B) The trustee is a bank (as defined in 18
section 408(n)), an insurance company (as de-19
fined in section 816), or another person who 20
demonstrates to the satisfaction of the Sec-21
retary that the manner in which such person 22
will administer the trust will be consistent with 23
the requirements of this section. 24
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‘‘(C) No part of the trust assets will be in-1
vested in life insurance contracts. 2
‘‘(D) The assets of the trust will not be 3
commingled with other property except in a 4
common trust fund or common investment 5
fund. 6
‘‘(E) The interest of an individual in the 7
balance in his account is nonforfeitable. 8
‘‘(2) Q
UALIFIED DISASTER AND PUBLIC 9
HEALTH EMERGENCY EXPENSES .—The term ‘quali-10
fied disaster and public health emergency expenses’ 11
means— 12
‘‘(A) disaster mitigation expenses, 13
‘‘(B) disaster recovery expenses, 14
‘‘(C) public health emergency expenses, 15
and 16
‘‘(D) unemployment related expenses. 17
‘‘(3) D
ISASTER MITIGATION EXPENSES .—The 18
term ‘disaster mitigation expenses’ means expenses 19
for any of the following with respect to the residence 20
referred to in subsection (c): 21
‘‘(A) Tornado safe rooms manufactured or 22
constructed in accordance with FEMA 320 or 23
FEMA 361 guidance or tornado shelters manu-24
factured or constructed in accordance with the 25
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National Storm Shelter/International Code 1
Council 500 standard. 2
‘‘(B) Opening protection, including impact 3
and wind resistant windows, exterior doors, and 4
garage doors. 5
‘‘(C) Reinforcement of roof-to-wall and 6
floor-to-wall connections for wind or seismic ac-7
tivity. 8
‘‘(D) Roof covering for impact, fire, or 9
high wind resistance. 10
‘‘(E) Cripple and shear walls to resist seis-11
mic activity. 12
‘‘(F) Flood resistant building materials. 13
‘‘(G) Elevating structures and utilities 14
above base flood elevation. 15
‘‘(H) Fire resistant exterior wall assem-16
blies/systems. 17
‘‘(I) Lightning protection systems. 18
‘‘(J) Whole home standby generators. 19
‘‘(K) Any activity specified by the Sec-20
retary as appropriate to mitigate the risks of 21
future hazards (including earthquake, flood, 22
hail, hurricane, sinkhole, lightning, power out-23
age, tornado, and wildfire) and other natural 24
disasters. 25
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‘‘(4) DISASTER RECOVERY EXPENSES .—The 1
term ‘disaster recovery expenses’ means with respect 2
to the residence referred to in subsection (c) any ex-3
pense incurred to replace or repair disaster-related 4
uninsured personal casualty personal losses totaling 5
$1,000 or greater. 6
‘‘(5) D
ISASTER-RELATED UNINSURED PER -7
SONAL CASUALTY LOSS .—The term ‘disaster-related 8
uninsured personal casualty loss’ means a personal 9
casualty loss (as defined in section 165(h)(3)(B), de-10
termined without regard to the second sentence 11
thereof) attributable to a State or federally declared 12
disaster for which a deduction is allowable under 13
section 165 (without regard to subsection (h)(1)). 14
‘‘(6) F
EDERALLY DECLARED DISASTER .—The 15
term ‘federally declared disaster’ has the meaning 16
given such term by section 165(i)(5). 17
‘‘(7) P
UBLIC HEALTH EMERGENCY EX -18
PENSES.—The term ‘public health emergency ex-19
penses’ means expenses for any of the following with 20
respect to an individual referred to in subsection (c) 21
if paid or incurred while a public health emergency 22
declaration is in effect and while such individual is 23
unemployed or has their employment status reduced 24
from full-time status: 25
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‘‘(A) Child care expenses. 1
‘‘(B) Out-of-pocket health care costs, in-2
cluding insurance premiums. 3
‘‘(C) Housing expenses including mort-4
gage, rent, or property taxes. 5
‘‘(D) Utilities. 6
‘‘(8) P
UBLIC HEALTH EMERGENCY DECLARA -7
TION.—The term ‘public health emergency declara-8
tion’ means any declaration of a public health emer-9
gency by the Secretary of Health and Human Serv-10
ices under section 319 of the Public Health Service 11
Act (42 U.S.C. 247d). 12
‘‘(9) U
NEMPLOYMENT RELATED EXPENSES .— 13
The term ‘unemployment related expenses’ means, in 14
the case of an account beneficiary with any period 15
of unemployment during the taxable year, any ex-16
penses during such taxable year which, in the aggre-17
gate, do not exceed $500. 18
‘‘(10) A
CCOUNT BENEFICIARY .—The term ‘ac-19
count beneficiary’ means the individual on whose be-20
half the emergency savings account was established. 21
‘‘(e) T
REATMENT OFACCOUNT.— 22
‘‘(1) I
N GENERAL.—An emergency savings ac-23
count is exempt from taxation under this subtitle 24
unless such account has ceased to be an emergency 25
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savings account. Notwithstanding the preceding sen-1
tence, any such account is subject to the taxes im-2
posed by section 511 (relating to imposition of tax 3
on unrelated business income of charitable, etc. or-4
ganizations). 5
‘‘(2) A
CCOUNT TERMINATIONS .—Rules similar 6
to the rules of paragraphs (2) and (4) of section 7
408(e) shall apply to emergency savings accounts, 8
and any amount treated as distributed under such 9
rules shall be treated as not used to pay qualified 10
disaster and public health emergency expenses. 11
‘‘(f) T
AXTREATMENT OFDISTRIBUTIONS.— 12
‘‘(1) A
MOUNTS USED FOR QUALIFIED DISASTER 13
AND PUBLIC HEALTH EMERGENCY EXPENSES .—Any 14
amount paid or distributed out of an emergency sav-15
ings account which is used exclusively to pay quali-16
fied disaster and public health emergency expenses 17
of any account beneficiary shall not be includible in 18
gross income. 19
‘‘(2) I
NCLUSION OF AMOUNTS NOT USED FOR 20
QUALIFIED DISASTER AND PUBLIC HEALTH EMER -21
GENCY EXPENSES.—Any amount paid or distributed 22
out of an emergency savings account which is not 23
used exclusively to pay the qualified disaster and 24
public health emergency expenses of the account 25
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beneficiary shall be included in the gross income of 1
such beneficiary. 2
‘‘(3) E
XCESS CONTRIBUTIONS RETURNED BE -3
FORE DUE DATE OF RETURN .— 4
‘‘(A) I
N GENERAL.—If any excess con-5
tribution is contributed for a taxable year to 6
any emergency savings account of an individual, 7
paragraph (2) shall not apply to distributions 8
from the emergency savings accounts of such 9
individual (to the extent such distributions do 10
not exceed the aggregate excess contributions to 11
all such accounts of such individual for such 12
year) if— 13
‘‘(i) such distribution is received by 14
the individual on or before the last day 15
prescribed by law (including extensions of 16
time) for filing such individual’s return for 17
such taxable year, and 18
‘‘(ii) such distribution is accompanied 19
by the amount of net income attributable 20
to such excess contribution. 21
Any net income described in clause (ii) shall be 22
included in the gross income of the individual 23
for the taxable year in which it is received. 24
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‘‘(B) EXCESS CONTRIBUTION .—For pur-1
poses of subparagraph (A), the term ‘excess 2
contribution’ means any contribution (other 3
than a rollover contribution described in para-4
graph (5)) which is not deductible under this 5
section. 6
‘‘(4) A
DDITIONAL TAX ON DISTRIBUTIONS NOT 7
USED FOR QUALIFIED DISASTER AND PUBLIC 8
HEALTH EMERGENCY EXPENSES .— 9
‘‘(A) I
N GENERAL.—The tax imposed by 10
this chapter on the account beneficiary for any 11
taxable year in which there is a payment or dis-12
tribution from an emergency savings account of 13
such beneficiary which is includible in gross in-14
come under paragraph (2) shall be increased by 15
20 percent of the amount which is so includible. 16
‘‘(B) E
XCEPTION FOR DISABILITY OR 17
DEATH.—Subparagraph (A) shall not apply if 18
the payment or distribution is made after the 19
account beneficiary becomes disabled within the 20
meaning of section 72(m)(7) or dies. 21
‘‘(5) R
OLLOVER CONTRIBUTION .—An amount is 22
described in this paragraph as a rollover contribu-23
tion if it meets the requirements of subparagraphs 24
(A) and (B). 25
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‘‘(A) IN GENERAL.—Paragraph (2) shall 1
not apply to any amount paid or distributed 2
from an emergency savings account to the ac-3
count beneficiary to the extent the amount re-4
ceived is paid into an emergency savings ac-5
count for the benefit of such beneficiary not 6
later than the 60th day after the day on which 7
the beneficiary receives the payment or distribu-8
tion. 9
‘‘(B) L
IMITATION.—This paragraph shall 10
not apply to any amount described in subpara-11
graph (A) received by an individual from an 12
emergency savings account if, at any time dur-13
ing the 1-year period ending on the day of such 14
receipt, such individual received any other 15
amount described in subparagraph (A) from an 16
emergency savings account which was not in-17
cludible in the individual’s gross income because 18
of the application of this paragraph. 19
‘‘(g) C
OST-OF-LIVINGADJUSTMENT.— 20
‘‘(1) I
N GENERAL.—In the case of any taxable 21
year beginning in a calendar year after 2023, each 22
$5,000 amount in subsection (b) and the $3,000 23
amount in subsection (d)(4) shall be increased by an 24
amount equal to— 25
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‘‘(A) such dollar amount, multiplied by 1
‘‘(B) the cost-of-living adjustment deter-2
mined under section 1(f)(3) for the calendar 3
year in which such taxable year begins deter-4
mined by substituting ‘calendar year 2022’ for 5
‘calendar year 2016’ in subparagraph (A)(ii) 6
thereof. 7
‘‘(2) R
OUNDING.—If any increase under para-8
graph (1) is not a multiple of $50, such increase 9
shall be rounded to the nearest multiple of $50. 10
‘‘(h) S
PECIALRULES.— 11
‘‘(1) D
ENIAL OF DEDUCTION TO DEPEND -12
ENTS.—No deduction shall be allowed under this 13
section to any individual with respect to whom a de-14
duction under section 151 is allowable to another 15
taxpayer for a taxable year beginning in the cal-16
endar year in which such individual’s taxable year 17
begins. 18
‘‘(2) T
AXABLE YEAR MUST BE FULL TAXABLE 19
YEAR.—Except in the case of a taxable year closed 20
by reason of the death of the taxpayer, no deduction 21
shall be allowed under this section in the case of a 22
taxable year covering a period of less than 12 23
months. 24
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‘‘(3) CERTAIN RULES TO APPLY .—Rules similar 1
to the following rules shall apply for purposes of this 2
section: 3
‘‘(A) Section 219(d)(2) (relating to no de-4
duction for rollovers). 5
‘‘(B) Section 219(f)(3) (relating to time 6
when contributions deemed made). 7
‘‘(C) Section 219(f)(5) (relating to em-8
ployer payments). 9
‘‘(D) Section 408(g) (relating to commu-10
nity property laws). 11
‘‘(E) Section 408(h) (relating to custodial 12
accounts). 13
‘‘(F) Section 223(f)(7) (relating to transfer 14
of account incident to divorce). 15
‘‘(G) Section 223(f)(8) (relating to treat-16
ment after death of account beneficiary). 17
‘‘(4) C
OORDINATION WITH CASUALTY LOSS DE -18
DUCTION.—No deduction shall be allowed under sec-19
tion 165 for a loss for which a disaster recovery ex-20
pense payment is made from an emergency savings 21
account. 22
‘‘(i) R
EPORTS.—The Secretary may require the trust-23
ee of an emergency savings account to make such reports 24
regarding such account to the Secretary and to the ac-25
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count beneficiary with respect to contributions, distribu-1
tions, the return of excess contributions, and such other 2
matters as the Secretary determines appropriate.’’. 3
(b) D
EDUCTIONALLOWEDWHETHER ORNOTINDI-4
VIDUALITEMIZESOTHERDEDUCTIONS.—Section 62(a) 5
of such Code is amended by inserting after paragraph (21) 6
the following new paragraph: 7
‘‘(22) E
MERGENCY SAVINGS ACCOUNTS .—The 8
deduction allowed by section 224.’’. 9
(c) T
AX ONEXCESSCONTRIBUTIONS.—Section 4973 10
of such Code (relating to tax on excess contributions to 11
certain tax-favored accounts and annuities) is amended— 12
(1) by striking ‘‘or’’ at the end of subsection 13
(a)(5), by inserting ‘‘or’’ at the end of subsection 14
(a)(6), and by inserting after subsection (a)(6) the 15
following new paragraph: 16
‘‘(7) an emergency savings account (within the 17
meaning of section 224(d)),’’; and 18
(2) by adding at the end the following new sub-19
section: 20
‘‘(i) E
XCESSCONTRIBUTIONS TO EMERGENCYSAV-21
INGSACCOUNTS.—For purposes of this section, in the 22
case of emergency savings accounts (within the meaning 23
of section 224(d)), the term ‘excess contributions’ means 24
the sum of— 25
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‘‘(1) the aggregate amount contributed for the 1
taxable year to the accounts (other than a rollover 2
contribution described in section 224(f)(5)) which is 3
not allowable as a deduction under section 224 for 4
such year, and 5
‘‘(2) the amount determined under this sub-6
section for the preceding taxable year, reduced by 7
the sum of— 8
‘‘(A) the distributions out of the accounts 9
which were included in gross income under sec-10
tion 224(f)(2), and 11
‘‘(B) the excess (if any) of— 12
‘‘(i) the maximum amount allowable 13
as a deduction under section 224(b) for 14
the taxable year, over 15
‘‘(ii) the amount contributed to the 16
accounts for the taxable year. 17
For purposes of this subsection, any contribu-18
tion which is distributed out of the emergency 19
savings account in a distribution to which sec-20
tion 224(f)(3) applies shall be treated as an 21
amount not contributed.’’. 22
(d) F
AILURETOPROVIDEREPORTS ONEMERGENCY 23
S
AVINGSACCOUNTS.—Section 6693(a)(2) of such Code is 24
amended by redesignating subparagraphs (D), (E), and 25
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(F) as subparagraphs (E), (F), and (G), respectively, and 1
by inserting after subparagraph (C) the following new sub-2
paragraph: 3
‘‘(D) section 224(i) (relating to emergency 4
savings accounts),’’. 5
(e) C
LERICALAMENDMENT.—The table of sections 6
for part VII of subchapter B of chapter 1 of such Code 7
is amended by striking the last item and inserting the fol-8
lowing: 9
‘‘Sec. 224. Emergency savings accounts.
‘‘Sec. 225. Cross reference.’’.
(f) EFFECTIVEDATE.—The amendments made by 10
this section shall apply to taxable years beginning after 11
December 31, 2022. 12
Æ
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