August 13, 1992
TO: BOARD OF GOVERNORS NO. 58-92
FEDERAL LEGISLATION MEMBERS NO. 7-92
PENSION MEMBERS NO. 22-92
RE: SENATE APPROVES EXPANDED IRA DEDUCTIBILITY
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Yesterday, the U.S. Senate voted to expand eligibility for
deductible individual retirement account (IRA) contributions.
Under the provision, taxpayers covered by retirement plans could
fully deduct IRA contributions if their adjusted gross incomes
were under $80,000 for individuals, or $120,000 for joint filers.
In addition, one spouse’s coverage under a retirement plan would
not affect the other spouse’s eligibility for the deduction.
The provision would also permit the establishment of
special IRAs, the contributions to which would not be deductible,
but withdrawals from which would be tax free if attributable to
contributions held for more than five years. Contributions to
special IRAs would also be subject to the income limitations.
The Senate will resume its consideration of the "Revenue
Act of 1992," of which the IRA provisions are a part, after Labor
Day. Upon the completion of Senate action, the IRA provisions
will be considered as part of the Senate’s conference with the
House of Representatives, whose version of the Act does not
include IRA provisions. If passed by Congress and signed by the
President, the IRA provisions would become effective in 1994.
The Institute will continue to seek the inclusion of
expanded IRA provisions in the tax bill.
We will keep you informed of further developments.
Matthew P. Fink
President