To amend the Internal Revenue Code of 1986 to allow taxpayers to split refunds and make deposits electronically among certain accounts.

March 2, 2005

Mr. EMANUEL (for himself and Mr. COOPER) introduced the following bill; which was referred to the Committee on Ways and Means

To amend the Internal Revenue Code of 1986 to allow taxpayers to split refunds and make deposits electronically among certain accounts.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Direct Deposit Savings Act of 2005'.

SEC. 2. SPLIT REFUNDS WITH ELECTRONIC FUNDS TRANSFER.

(a) In General- Section 6402 of the Internal Revenue Code of 1986 (relating to authority to make credits or refunds) is amended by adding at the end the following new subsection:

`(g) Split Refunds- In the case of any overpayment to be refunded to the taxpayer after the application of subsections (a), (b), (c), (d), and (e), the taxpayer may direct that the amount to be refunded--

`(1) be paid in part by check, draft, or similar paper instrument, and

`(2) be allocated in part among not more than 4 accounts and deposited by electronic fund transfer (within the meaning of section 5061(e)(2)) in the accounts to which allocated.

Amounts may be deposited under paragraph (2) in a qualified financial institution (as defined by section 165(l)(3)) or an individual retirement plan.'.

(b) Time When Contributions Deemed Made- Paragraph (3) of section 219(f) of such Code (relating to time when contributions deemed made) is amended by inserting before the period at the end the following: `or is made by direct deposit pursuant to the direction of the taxpayer under section 6402(g) on a return timely filed (not including extensions thereof)'.

(c) Effective Date- The amendment made by subsection (a) shall apply to taxable years beginning after the date of the enactment of this Act.

END