Core Provisions: H.R. 6799 would amend the Internal Revenue code to provide for unemployment savings accounts that would be treated like IRAs for tax purposes. Although workers could contribute to these accounts to protect them during periods of unemployment other than following termination for gross misconduct, this legislation would not diminish an employer’s obligation to pay state or federal unemployment taxes or reduce an individual’s entitlement to 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. Once an account-holder begins receiving Social Security retirement benefits, the individual would be prohibited from making any more contributions to the Worker Savings Account (WSA), but would be able to rollover WSA funds into an IRA or 401(k) plan.

Status: Rep. McHugh (R-NY) introduced the Worker Savings Account Act of 2008 on August 1, 2008, and it was referred to the House Committee on Ways and Means.