The proposal is the second in a series of drafts that are meant to lay the groundwork for broader tax reform in 2017. A discussion draft on depreciation was released earlier in the year
The Retirement Improvements and Savings Enhancements (RISE) Act of 2016 would ease a handful of retirement account restrictions and increase the saver's credit, but would also limit large individual retirement arrangements (IRAs). Under the bill, taxpayers could not make any contribution to an IRA with an account value exceeding $5 million. IRA funds could not be used to invest in any assets acquired for less than fair market value, and the legislation would extend the statute of limitation for IRA noncompliance while tightening the rules on IRA prohibited transactions. Taxpayers would no longer be able to convert an IRA to a Roth IRA and Roth IRAs would be subject to required minimum distributions for the first time.
The bill offers more benefits to taxpayers with more modest income levels. The bill would increase the income limits on the saver's credit and make the credit refundable. It would also gradually raise the age when required minimum distributions (RMDs) begin to 73 and waive the RMD rules for those with $150,000 or less in retirement plan savings. In addition, the bill would allow taxpayers to continue to contribute to IRAs after reaching age 70½.
The bill would make a handful of other changes affecting rollover requirements, "stretch IRAs," and student loan requirements. It is in no danger of being enacted in the short-term, but could prove meaningful next year if Democrats regain control of the Senate
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