A Republican bill with 1 Democratic cosponsor · See the cosponsor
Last activity — Read twice and referred to the Committee on Finance.
In committee
Introduced and handed to a committee in the chamber it started in.
The committee holds it, and most bills are never heard from again. A hearing or a committee vote would be news; silence is the usual outcome, and it kills the bill without anyone voting against it.
Its path through Congress
- Introduced
- In Committee
What this bill would do
The Retirement Simplification and Clarity Act aims to amend the Internal Revenue Code of 1986. It introduces provisions for in-service rollovers specifically for individual retirement annuity purchases. This allows participants aged 50 or older to move portions of their employer-contributed benefits into an individual retirement annuity. The bill also establishes a safe harbor for written explanations provided to taxpayers regarding distributions. Finally, these changes are set to take effect for taxable years beginning after December 31, 2026.
Yes· 3 of 4
- Scored +5
Would people over 65 be better off under this?
The bill benefits seniors and those nearing retirement by allowing in-service rollovers to individual retirement annuities.
- Scored +5
Would retired people be better off under this?
The bill increases financial flexibility for retirees through enhanced rollover options.
- Scored +3
Would middle-income households be better off under this?
The bill provides more flexibility in managing retirement assets for those planning for their future.
The opposite
No question was scored the opposite.
Who it would affect, and how
Potential Positive Impacts for People
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In-service Rollovers: A plan may allow a participant who is 50 or older to elect a direct rollover of all or part of their employer-contributed benefits to an individual retirement annuity. (Section 2(a))
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Tax Deferral: Taxpayers can defer Federal income tax on eligible distributions by rolling them over to another qualified plan or individual retirement arrangement. (Section 2(b)(2)(A)(vi))
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Simplified Information: The bill provides a framework for written explanations that use concise, plain language to inform taxpayers of their rights and obligations. (Section 2(b)(2)(A))
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Transferring Employers: When changing employers, a taxpayer can roll over eligible amounts to a new plan or an individual retirement account, or choose to leave the amounts in their original plan. (Section 2(b)(2)(A)(ix-x))
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Direct Rollover Advantages: Direct rollovers are not subject to the mandatory 20 percent withholding and can be handled via check or electronic transfer. (Section 2(b)(2)(A)(xii))
Potential Negative Impacts for People
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Tax Consequences for Early Distributions: Taxpayers may owe an additional 10 percent tax if they take a distribution before reaching age 59 1/2. (Section 2(b)(2)(A)(iii))
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Income Tax Withholding: Distributions made directly to a taxpayer are subject to income tax withholding and added to gross income. (Section 2(b)(2)(A)(ii))
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Withholding on Ineligible Distributions: A 20 percent income tax withholding applies to distributions that are not eligible for rollover. (Section 2(b)(2)(A)(iv))
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Distribution Limitations: Certain types of payments cannot be rolled over, including required minimum distributions, hardship distributions, certain series of payments, employee stock ownership plan dividends, and corrective distributions. (Section 2(b)(2)(A)(vi))
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Mandatory Distributions: A plan may require a taxpayer to take a distribution once they reach the plan's retirement age. (Section 2(b)(2)(A)(viii))
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Tap or hover a score for the reason it gave.
- Demographic And Interest Groups
- Would retired people be better off under this? — The bill increases financial flexibility for retirees through enhanced rollover options. Would people over 65 be better off under this? — The bill benefits seniors and those nearing retirement by allowing in-service rollovers to individual retirement annuities. Would middle-income households be better off under this? — The bill provides more flexibility in managing retirement assets for those planning for their future.
- Economy And Finance
- Does this give people more protection from unfair business practices? — The bill enhances consumer protection by requiring clear, plain-language disclosures regarding retirement distributions.
- 7/29/2026
- Read twice and referred to the Committee on Finance.
- 1 Cosponsor added.
- Introduced in Senate
One bill Congress.gov lists as related to this one — companions in the other chamber, earlier versions, and bills this one absorbed or was folded into.
Kirsten GillibrandDemocrat · New York