The Senate has passed by a vote of 51-50 its version of the tax reconciliation bill. The bill substantially modified the terms to create a new early wealth building account, known as a “Trump account” from an earlier Senate draft. Like the House-passed bill and consistent with an earlier draft, the Senate bill would extend Achieving a Better Life Experience (ABLE) provisions that are set to expire—but with a slight increase to the Savers Credit. The bill also includes 529 education account proposals that were passed in the House, with modifications. Homeschooling expenses have been removed and the annual expense limitation for qualified higher education expenses has been doubled to $20,000. Select health savings account provisions were also added to the Senate passed bill. The legislation will now move to the House as the President’s self-imposed July 4 deadline quickly approaches.

For the past three years, Congress has attempted to pass major retirement reform legislation. It has finally succeeded with the year-end passage of two spending packages meant to avert a government shutdown. One of the packages, the Further Consolidated Appropriations Act, 2020 (FCAA), includes multiple bills—including the Setting Every Community Up for Retirement Enhancement (SECURE) Act, which contains several major retirement-related provisions. These provisions are nearly identical to those included in an earlier version of the SECURE Act that was passed by the U.S. House of Representatives in May 2019. At the time of this publication, the President had not yet signed these bills into law. But it is widely anticipated that he will.