Section-by-Section Summary: USAccounts
Establishes the creation of USAccounts, a new individualized savings vehicle aimed at helping children
begin saving from day one for life’s expenses, such as college, while also teaching them the importance
of saving. Upon the birth of a child, an account will be opened in their name and the government will
provide an initial contribution of $500. For families who qualify for the Child Tax Credit, they will see
their Child Tax Credit increase to match the amount of their contributions into an account, up to $500.
If they also qualify for the Earned Income Tax Credit, the government will contribute up to an additional
$500 in matching funds into an account.
Section 1: USAccounts: Investing in America’s Future Act of 2015
Section 2: Findings
Section 3: Creation of the “USAccount Fund” at the Treasury Department
 The Fund will serve as the base financial vehicle for the USAccount program that consists of
individual child saving accounts.
 The Fund will provide $500 in seed money to each individual USAccount opened in the United
States.
 The Fund will also invest in Treasury securities, make distributions, fund matching
contributions, and pay administrative and insurance expenses.
 This section prohibits the use of payroll taxes to fund USAccounts.
Section 4: Establishment of USAccounts
 Individual USAccounts will be created upon the birth of a child, similar to the Social Security
program.
 Allows private contributions into USAccounts, capped at $2,000 per calendar year, per
USAccount.
 Allows people to directly contribute to a USAccount from payroll deductions or tax refunds.
 Churches, charities, private foundations, businesses or civic leagues are authorized to contribute
to a child’s USAccount.
 Provides for government matching contributions equal to 100% of private contributions up to
$500 per calendar year, per USAccount, with the match phase-out corresponding to the income
threshold phase-out’s set annually by the IRS for the Earned Income Tax Credit (EITC).
 No distributions from USAccounts before the holder is 18 years old, except to pay for higher
education expenses
 180 days after a USAccount older becomes 18 years old, the funds in a USAccount – if not
distributed for higher education – roll over into a newly created USAccount IRA.
 USAccount IRAs will function like a traditional IRA, except no distributions can be made until
the account holder attains the age of 59 ½ except for first time homebuyers, serious medical
expenses, families participating in savings plans under the ABLE Act (P.L. 113-295), opening a
small business, or to prevent foreclosure on a primary residence.
 A USAccount holder can elect, under regulations that will be drafted by the Treasury
Department, to transfer their USAccount to a privately-managed trustee.
 All dollar amounts in this bill will be adjusted annually for inflation.
Section 5: Deceased USAccount holders
 In case of the death of a USAccount holder, the USAccount will be closed and the legal guardian
of the USAccount holder will get any funds in the USAccount.
Section 6: Investments from USAccounts
 USAccounts will be invested in Treasury securities similar to the G Fund securities in the Thrift
Savings Plan.
Section 7: USAccount Management
 Creation of a USAccount Fund Board for oversight, which will act like the Federal Retirement
Thrift Investment Board.
Section 8: Fiduciary Responsibilities
 Fiduciary responsibilities will be similar to the Thrift Savings Program for federal employees.
Section 9: Exclusion from Means-Tested Benefits
 Amounts in individual USAccounts shall not be considered in determining an individual’s or
household’s financial eligibility for any means-tested benefit or service, including federal student
financial aid.
Section 10: Reports
 Requires annual reports on the status and operation of the USAccount Fund and management of
USAccounts.
 Requires annual statement to all USAccount holders that will include their account balance.
Section 11: Tax Treatment of Accounts and Increase in the Child Tax Credit (CTC)
 Private contributions into a USAccount are post-tax.
 Distributions are not taxable income.
 Increase in the Child Tax Credit:
o Any family who qualifies for the Child Tax Credit will see a corresponding increase in
their CTC equal to the amount of their private contributions into the USAccount of their
dependent, up to a maximum of $500 per calendar year, per USAccount.
o This increase in the CTC will be refundable.
Section 12: Improving Earned Income Tax Credit (EITC) Outreach
 When processing income tax returns, the IRS shall contact a taxpayer if they believe the taxpayer
should have – but didn’t – claim the EITC. If the taxpayer does not acknowledge the letter within
60 days, the IRS shall calculate the EITC tax return for the taxpayer, and deposit such funds into
the USAccount (pro rata if the taxpayer is the legal guardian of more than one USAccount
holder), or if the taxpayer is not the legal guardian of a USAccount holder, mail the tax refund
check directly to the taxpayer.
 Provides safe harbor to taxpayers if the IRS makes an error in calculating a taxpayer’s EITC tax
credit.