Enhancement of saver’s credit

(a) 50 percent credit rate Section 25B(a) of the Internal Revenue Code of 1986 is amended by striking the applicable percentage and inserting 50 percent. (b) Adjusted gross income phaseouts Section 25B(b) of such Code is amended to read as follows: (b) Limitation For purposes of this section— (1) In general The amount of credit allowable under subsection (a) (determined without regard to this subsection) shall be reduced (but not below zero) by an amount which bears the same ratio to the credit otherwise so allowable as— (A) the excess (if any) of— (i) adjusted gross income of the taxpayer, over (ii) the threshold amount, bears to (B) the phaseout amount. (2) Threshold amount The term threshold amount means— (A) in the case of a joint return or a surviving spouse (as defined in section 2(a)), $48,000, (B) in the case of a head of household, 75 percent of the amount in effect for the taxable year under subparagraph (A), and (C) in the case of any other individual, 50 percent of the amount in effect for the taxable year under subparagraph (A). (3) Phaseout amount The term phaseout amount means— (A) in the case of a joint return or a surviving spouse (as defined in 2(a)), $35,000, (B) in the case of a head of household (as defined in section 2(b)), 75 percent of the amount in effect for the taxable year under subparagraph (A), and (C) in the case of any other individual, 50 percent of the amount in effect for the taxable year under subparagraph (A). (4) Inflation adjustment (A) In general In the case of any taxable year beginning in a calendar year after 2028, the $48,000 dollar amount in paragraph (2) and the $35,000 in paragraph (3) shall each be increased by an amount equal to— (i) such dollar amount, multiplied by (ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting calendar year 2024 for calendar year 2016 in subparagraph (A)(ii) thereof. (B) Rounding Any increase determined under subparagraph (A) that is not a multiple of $500 shall be rounded to the nearest multiple of $500.. (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2028.