Tax Policy Center

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T20-0148 - Replace Deductible Defined-Contributions with Revenue-Neutral Nonrefundable Expanded Savers' Credit, Baseline: Current Law with TCJA Permanently Extended, Distribution of Federal Tax Change by Expanded Cash Income Percentile, 2020

The proposal would repeal the deduction of elective contributions for individual retirement accounts (IRAs), Keogh plans, and employer-sponsored defined-contribution accounts, and introduce a revenue-neutral nonrefundable 23.1 percent tax credit as a percentage of the eligible contributions. Estimates assume no change in future taxes. Baseline is the law in place as of December 18, 2019, with the Tax Cuts and Jobs Act of 2017 (TCJA) permanently extended.

May 7, 2020