To amend the Internal Revenue Code of 1986 to accelerate the scheduled increases in eligibility for individual retirement plans and to eliminate the marriage penalty in determining such eligibility.

February 11, 2003

Mr. GALLEGLY introduced the following bill; which was referred to the Committee on Ways and Means

To amend the Internal Revenue Code of 1986 to accelerate the scheduled increases in eligibility for individual retirement plans and to eliminate the marriage penalty in determining such eligibility.

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 `Marriage IRA Fairness Act of 2003'.

SEC. 2. ACCELERATION OF SCHEDULED INCREASES IN ELIGIBILITY FOR INDIVIDUAL RETIREMENT PLANS; ELIMINATION OF MARRIAGE PENALTY IN ELIGIBILITY.

(a) DEDUCTIBLE INDIVIDUAL RETIREMENT PLANS-

(1) INCREASE IN PHASEOUT THRESHOLDS-

(A) IN GENERAL- Subclause (II) of section 219(g)(2)(A)(i) of the Internal Revenue Code of 1986 is amended to read as follows:

`(II) $50,000 (twice such amount in the case of a joint return), bears to'.

(B) CONFORMING AMENDMENT- Subsection (g) of section 219 of such Code is amended by striking paragraphs (3) and (4) and by inserting after paragraph (2) the following new paragraphs:

`(3) ADJUSTED GROSS INCOME- For purposes of this subsection, adjusted gross income of any taxpayer shall be determined--

`(A) after application of sections 86 and 469, and

`(B) without regard to sections 135, 137, 221, 222, and 911 or the deduction allowable under this section.

`(4) COST-OF-LIVING ADJUSTMENT- In the case of any taxable year beginning in a calendar year after 2003, the $50,000 amount under paragraph (2)(A)(i)(II) shall be increased by an amount equal to--

`(A) such dollar amount, multiplied by

`(B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting `calendar year 2002' for `calendar year 1992' in subparagraph (B) thereof.

If any amount after adjustment under the preceding sentence is not a multiple of $500, such amount shall be rounded to the nearest multiple of $500.'.

(2) INCREASE ON PHASEOUT RANGE- Clause (ii) of section 219(g)(2)(A) of such Code is amended by striking `for a taxable year beginning after December 31, 2006'.

(b) ROTH IRA'S-

(1) IN GENERAL- Clause (ii) of section 408A(c)(3)(C) of such Code is amended--

(A) by striking `$150,000,' in subclause (I) and inserting `twice the amount under subclause (II), and',

(B) by striking `(other than a married individual filing a separate return), $95,000, and' in subclause (II) and inserting `, $95,000.', and

(C) by striking subclause (III).

(2) COST-OF-LIVING ADJUSTMENT- Paragraph (3) of section 408A(c) of such Code is amended by adding at the end the following new subparagraph:

`(E) COST-OF-LIVING ADJUSTMENT- In the case of any taxable year beginning in a calendar year after 2003, the $95,000 amount under subparagraph (C)(ii)(II) shall be increased by an amount equal to--

`(i) such dollar amount, multiplied by

`(ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting `calendar year 2002' for `calendar year 1992' in subparagraph (B) thereof.

If any amount after adjustment under the preceding sentence is not a multiple of $500, such amount shall be rounded to the nearest multiple of $500.'.

(c) ELIMINATION OF MARRIAGE PENALTY ON IRA DEDUCTION FOR ACTIVE PENSION PLAN PARTICIPANTS- Section 219(g) of such Code is amended--

(1) by striking `or the individual's spouse' in paragraph (1), and

(2) by striking paragraph (7).

(d) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 2002.

END