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Federal Tax

Senate Passes Funding Bill with Retirement Package, House to Follow

Jeff Carlson  

Jeff Carlson  

The Senate passed a $1.7 trillion government funding bill (Consolidated Appropriations Act, 2023 (H.R.2617)) on December 22 in a 68-29 vote, sending the package to the House for a vote today. Following House approval, President Biden is expected to sign the measure before government funding expires. Note that the Senate cleared by voice vote a bill to extend the government funding deadline to December 30 (it was originally today).

In addition to financing the federal government for its 2023 fiscal year, the bill contains the SECURE 2.0 Act (the Act), which includes dozens of retirement-related provisions intended to build on reforms passed in late 2019.

For Checkpoint’s analysis of the key retirement provisions, see here.

Key retirement provisions in the Act include:

• Expanding automatic enrollment in retirement plans

• Increasing the age for required beginning date for mandatory distributions

• A higher catch-up Limit to Apply at Age 60, 61, 62, and 63

• Elimination of Additional Tax on Corrective Distributions of Excess Contributions

The Act also includes a number of smaller non-retirement tax provisions including changes to ABLE accounts under Code Sec. 529A and modifications to the rules governing charitable conservation easements under Code Sec. 170.

For Checkpoint’s analysis of key non-retirement provisions, see here.

Senators rushed through amendments during the afternoon, limiting debate to ten minutes as they were anxious to leave town for the holidays before a major winter storm closed airports.

Senate lawmakers approved eight amendments which included expanded federal protections for pregnant workers and nursing mothers, a proposal allowing seized Russian assets to be used as Ukraine aid and a provision allowing states to use leftover federal pandemic aid for infrastructure.

“This bill, in just about every respect, represents a compromise,” said Senate Appropriations Committee Vice Chairman Richard Shelby, Republican from Alabama, who helped assemble the final package. “The legislative process, and the appropriations process in particular, rarely produces anything different. In other words, if you are seeking purity, you will not find it here and, you never will.”

 

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