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Worker Savings Accounts Proposed

by | Aug 27, 2008 | employment, Taxation, unemployment savings account

Rep. McHugh (R-NY) introduced the Worker Savings Account Act of 2008 on August 1, 2008. H.R. 6799 would create Unemployment Savings Accounts. These accounts would be treated like IRAs for tax purposes. Workers could contribute to these accounts to protect them during periods of unemployment other than following termination for gross misconduct.

Note if passed: This legislation would not lessen the requirement for employers to pay state or federal unemployment taxes, and would not reduce an individual’s unemployment benefits.

Employees would be limited to annual contributions of $5,000 (indexed to inflation) and employers could provide matching contributions up to the full amount of the employee’s contribution. The employe could rollover WSA funds into an IRA or 401(k) plan.

This Bill was referred to the House Committee on Ways and Means. Because this is an election year, the Bill will most likely die in the Ways and Means Committee.