I found the
actual text of the proposal.
Details about the retirement changes I found interesting:
* The prohibition on contributing more once you hit $10 million in retirement accounts wouldn't apply to SEP or SIMPLE IRAs. It would apply to other employer contributions, which implies that employers that typically make these contributions will need to have some way of knowing which of their employees are above the limit.
* The $10 million limit would apply to retirement plans under 401(a), 403(a), and 403(b), plus IRAs and governmental 457 plans. Non-governmental 457 plan balances are excluded from this calculation.
* Any employer who has a retirement plan participant with more than a $2.5 million balance will have to report information about those participants and their plan balances to the IRS.
* The $400k-$450k "adjusted taxable income" used for determining who gets caught up in these rules is defined as taxable income plus any deduction for IRA contributions that brings the total above $10 million, minus any income from the new RMDs for people with high retirement account balances.
* The new RMD for people with high retirement account balances will be exempt from the 10% early withdrawal tax. No exemption from the taxation of Roth growth if withdrawn early, as far as I can tell.
* Employer plans will need to allow in-service distributions from employees who certify that they need to take out the money to satisfy their high-balance RMDs.
* For the changes to close the backdoor Roth, I didn't see anything in there that would modify the pro-rata rule for IRA distributions, meaning that people with any after-tax basis in a traditional IRA may be prohibited from doing any Roth conversions. Not super confident on this point though.
* No more purchasing investments requiring accredited investor (or similar) status in an IRA after 2021, and if you have any such investments already in your IRA you'll need to dispose of them by the end of 2023.
* No more investing through your IRA in privately-held businesses where you own at least 10% of the shares, or any businesses where you serve on the board of directors (or similar). Any such pre-existing investments will need to be sold by the end of 2023.
* The statute of limitations for enforcing IRA violations would increase to six years.
Some other interesting bits unrelated to the retirement account stuff:
* The temporary suspension of the itemized deduction for casualty losses, that began in 2018, would be repealed. This would include allowing losses to be deducted retroactively for the years where this deduction was suspended.
* There would be a new tax credit for 30% of the amount of money people spend on wildfire mitigation/prevention measures.
* The tax credits for low-income housing would be increased, and there would be a new credit for housing development/renovation costs in certain lower-income neighborhoods when the homes are sold to lower-income individuals.
* Certain tax credits for renewable energy and alternative fuels would be extended and expanded.
* New tax credit for 15% of the cost of an electric bicycle (phases out at AGI above $150k married/$112.5k HoH/$75k single).
* The new higher monthly child tax credit payments would be extended through 2025. After that the child tax credit amounts would revert to what they were before, except the credit would be fully refundable.
* The increases to the child/dependent care tax credit and dependent care FSAs would continue indefinitely instead of sunsetting at the end of this year.
* There would be a new tax credit against employer payroll taxes, subsidizing certain child care employee wages.
* There would be a new tax credit against employer payroll taxes, subsidizing certain local journalist wages.
* There would be a new tax credit of up to $4,000 for people who pay for in-home caregivers for adults that need long-term care.
* Certain temporary changes to the earned income credit for 2021 (including higher amounts for childless individuals, no upper age limit, ability to use prior year's earned income if higher) would be extended indefinitely.
* The new ACA applicable percentages, currently scheduled to sunset after 2022, would be extended indefinitely. No more cliff at 400% of the poverty level.
* Some changes to allow ACA marketplace coverage for people with low incomes. Looks like a workaround to the fact that many states haven't expanded Medicaid and therefore have a bunch of folks ineligible for Medicaid or ACA subsidies.
* New federal scholarships for certain medical students who promise to practice in an underserved area after they graduate.
* New 40% tax credit for donations toward certain research projects at public universities, to be claimed in lieu of a charitable itemized deduction.
* People with prior drug convictions would no longer be disqualified from receiving the American Opportunity education credit.
* The 39.6% bracket would be reinstated for taxable incomes over $450k (married), $425k (HoH), $400k (single), $225k (married filing separately), effective 2022. This replaces all of the current 37% bracket and part of the 35% bracket.
* A new 3% additional tax on MAGI over $5 million, effective 2022.
* The capital gains rate would go up to 25% for the same income thresholds as the 39.6% regular income bracket, effective yesterday.
* The estate tax exemption would go back down to $5 million (in 2010 dollars), effective 2022.
* The amount of property exempt from estate tax if it's used for a family business will increase from $750k (in 1997 dollars) to $11.7 million (in 2020 dollars). Seems like a new strategy in estate planning: park at least half of your net worth in an operating business (or businesses), with at least 25% of your net worth into real property used by the business (or businesses), hire a family member to run it or otherwise "materially participate" for at least five of the eight years before you die, and no estate tax on the first $11.7 million of the business value!
* Almost $79 billion appropriated to pay for additional IRS tax enforcement over the next decade.
* A new $2,000 credit for assistive technology purchased for a blind taxpayer, or blind member of the taxpayer's family.