HR2852-119

What This Bill Does

The Expanded Student Saver's Tax Credit Act amends Internal Revenue Code sections 25B and 6433. Current saver-credit rules exclude full-time students, and the bill removes that exclusion for both the existing saver's credit and the SECURE 2.0 saver's match. The remaining exclusion is dependency status: students still do not qualify if another taxpayer can claim a section 151 dependency deduction for them. The amendments apply to contributions made after enactment for section 25B and are treated as included in SECURE 2.0 section 103 for the saver's match.

Who Benefits and How

Full-time students with earned income benefit because they can receive the saver's credit for retirement contributions if they are not dependents. Student workers contributing to retirement accounts benefit because the SECURE 2.0 saver's match would no longer exclude them solely for being full-time students. Retirement plan providers benefit from a larger eligible customer group for student contributions. College financial wellness programs benefit from a clearer tax incentive for student retirement saving.

Who Bears the Burden and How

The Internal Revenue Service must update forms, instructions, and eligibility checks for the student exclusion repeal. Treasury Department tax administrators must coordinate the section 25B and section 6433 effective-date rules. Federal taxpayers bear the revenue cost of extending the credit and match to eligible full-time students. Dependent students remain excluded and may still need tax advice to know whether another taxpayer can claim them.

Key Provisions

• Amends section 25B so full-time student status no longer bars the saver's credit.
• Amends section 6433 so full-time student status no longer bars the SECURE 2.0 saver's match.
• Limits eligibility by preserving the exclusion for individuals claimed as dependents by another taxpayer.
• Applies the saver's credit change to post-enactment contributions and aligns the match change with SECURE 2.0.