Might MyRA Make a Comeback?

A new bill introduced in the U.S. Senate seeks to expand the impact of the Saver’s Credit and restore the myRA program eliminated by the Trump administration.

The Encouraging Americans to Save Act, introduced by Senate Finance Committee Ranking Member Ron Wyden, D-Ore. along with Sens. Ben Cardin, D-Md., Bob Casey, D-Pa., Amy Klobuchar, D-Minn., and Michael Bennet, D-Colo., would offer matching contributions to millions of individuals not covered by an employer-sponsored retirement plan—including those who save through an IRA under a state or local government program such as OregonSaves.

The EASA would replace the current Saver’s Credit with a 50% government match on contributions of up to $1,000 per year made to 401(k)-type plans and IRAs by individuals with income up to $32,500 and couples with income up to $65,000. That would phase out over the next $10,000 of income for individuals and $20,000 for couples.

Refundable Credit

Unlike the current Savers’ Credit, EASA would provide the credit to all within the target income group who saves in an eligible account regardless of whether the taxpayer owes income taxes. Additionally, that government match would be deposited directly into the taxpayer’s account instead of being sent to the individual as a tax refund.

The income limits and the cap on the eligible contribution amount would be indexed for inflation.

The match would be claimed on the individual 1040 or 1040-EZ income tax form and deposited directly into a worker’s IRA, 401(k) or similar account using the account number provided by the worker. If the individual provides an erroneous account number or none at all, the match would be deposited into a MyRA account.

Education Mandate

This bill also requires the Secretary of the Treasury to educate taxpayers on the benefits of the refundable government matching contribution established by EASA, as well as the MyRA program. When the Trump administration closed the program in 2017, it was reported that there were approximately 20,000 myRA accounts with a median balance of $500, and an additional 10,000 accounts with no money in them. U.S. Treasurer Jovita Carranza said at the time that if the program had continued, it would have cost taxpayers approximately $10 million a year to manage the program.