Purpose of the Bill

The bill aims to amend taxation rules related to individual income by correcting errors concerning the taxable year designated for certain deductible contributions to retirement plans.

Main Provisions

• Designation Adjustment: The bill specifies that when an individual makes a contribution to an individual retirement plan through an annuity contract, it should be considered as a contribution for the previous taxable year if made by the legal deadline specified in the tax code.
• Notification Requirement: The annuity contract provider must receive a notification from the individual within three years after the original filing deadline that specifies the intended tax year for the contribution to adjust its designation.

Significant Changes to Existing Law

• The bill clarifies the treatment of contributions to retirement annuity contracts regarding their attribution to taxable years. It ensures the correct tax year designation if done within the stipulated notification period, potentially allowing taxpayers to optimize their retirement contributions retrospectively.

Relevant Terms: taxation, individual income, deductible contributions, retirement plans, annuity contract, Internal Revenue Code, tax year designation.