Washington, D.C. –Congresswoman Elise Stefanik (R-NY-21) voted in support of the Family Savings Act that expands the ability for individuals and families to use a variety of savings vehicles. She also voted in support of the American Innovation Act that doubles the amount of start-up and organizational costs that can be deducted in the first year of operations.
“These tax bills provide important reforms for families in the North Country who are saving for education or for retirement, and help incentivize entrepreneurship and job creation,” said Congresswoman Stefanik. “I recently had the opportunity to host a discussion on retirement security issues with policy experts and financial professionals as part of my work on the RPC Millennial Task Force, and I am pleased that many of the important reforms that we discussed are included in the Family Savings Act. By helping families and younger generations save, we can ensure they are on sound financial footing throughout their lives. And by encouraging more North Country innovators to start small businesses, we can continue to grow our local economy and provide good paying jobs right here in our community. I will continue to work in Congress on commonsense reforms that get government out of the way and allow North Country families to pursue their dreams.”
American Innovation Act
Summary: The bill doubles the amount of start-up and organizational costs that can be expensed in the first year of operations. The bill allows a taxpayer to immediately deduct up to $20,000 in combined start-up and organizational expenditures. This deduction is phased out to the extent that a taxpayer’s start-up and organizational expenditures, in the aggregate, exceed $120,000. Additionally, the bill generally provides that a corporation’s start-up losses and start-up credits are not limited in the event that the corporation undergoes an ownership change. The bill is needed to restart American business and entrepreneurial innovation. New business formation took a dramatic downturn during the recession, but the decline has been ongoing for decades:
- In 1977, start-up businesses made up 16% of all businesses
- In 2015, start-up businesses made up only 8% of all businesses
Family Savings Act
Summary: The bill expands the ability for individuals and families to use a variety of savings vehicles. The bill includes reforms to make it easier for employers, especially small employers, to provide retirement plans to their employees. In addition, the bill establishes universal savings accounts, which are individual accounts that Americans can use to save for any purpose, in order to encourage families to save earlier and in greater amounts. The bill further expands the permitted uses of 529 education savings plans. The bill also includes a provision that allows individuals to withdraw funds from their retirement accounts, penalty-free, at the birth or adoption of a child. Additional provisions include:
- Allowing small businesses to join together to create a 401(k) plan more affordable
- Giving employers more time to put new retirement plans in place
- Simplifying the rules for participation in employer plans
- Eliminating the age limit on IRA contributions
- Allowing military reservists to maximize their retirement contributions
- Allowing families to access their own retirement accounts on a penalty-free basis to use as they see fit when welcoming a new child into the family, whether by birth or adoption. And allowing families to replenish those retirement accounts in the future.