A bill to amend the Internal Revenue Code of 1986 to impose limitations on high-income taxpayers with large retirement account balances.
The source supplies the latest action, but no lifecycle stage.
Latest action (21 Jul 2026): Read twice and referred to the Committee on Finance.
What this bill does
**Summary of S. 5040**
This bill would amend the Internal Revenue Code to restrict tax-advantaged retirement savings for high-income individuals who have accumulated very large retirement account balances. Starting with tax years after 2026, taxpayers with income above set thresholds (generally $400,000–$450,000 depending on filing status, adjusted annually for inflation) would be barred from making new contributions to IRAs and similar accounts once their combined retirement account balances reach $10 million (also inflation-adjusted); excess contributions would be subject to an excise tax. Starting with tax years after 2033, the bill would also require larger annual withdrawals ("minimum required distributions") from retirement accounts for these same high-income, high-balance individuals, with special rules affecting Roth accounts, employee stock ownership plans, early-withdrawal penalties, and tax withholding on such distributions.
The bill primarily affects a narrow group of higher-income taxpayers who have amassed unusually large retirement savings—well beyond amounts affecting most savers. It would not change contribution or distribution rules for the vast majority of retirement account holders.
The bill was introduced by Senator Ron Wyden on July 21, 2026, and referred to the Senate Committee on Finance. It has not yet received a committee vote, floor vote, or further action, and would need to pass both chambers of Congress and be signed by the President to become law.
Plain-English summary generated by Bill100 AI from the official record. Always verify against the source below.
Timeline
21 Jul 2026
Read twice and referred to the Committee on Finance.
Common questions
- What does S. 5040 do?
- **Summary of S. 5040** This bill would amend the Internal Revenue Code to restrict tax-advantaged retirement savings for high-income individuals who have accumulated very large retirement account balances. Starting with tax years after 2026, taxpayers with income above set thresholds (generally $400,000–$450,000 depending on filing status, adjusted annually for inflation) would be barred from making new contributions to IRAs and similar accounts once their combined retirement account balances reach $10 million (also inflation-adjusted); excess contributions would be subject to an excise tax. Starting with tax years after 2033, the bill would also require larger annual withdrawals ("minimum required distributions") from retirement accounts for these same high-income, high-balance individuals, with special rules affecting Roth accounts, employee stock ownership plans, early-withdrawal penalties, and tax withholding on such distributions. The bill primarily affects a narrow group of higher-income taxpayers who have amassed unusually large retirement savings—well beyond amounts affecting most savers. It would not change contribution or distribution rules for the vast majority of retirement account holders. The bill was introduced by Senator Ron Wyden on July 21, 2026, and referred to the Senate Committee on Finance. It has not yet received a committee vote, floor vote, or further action, and would need to pass both chambers of Congress and be signed by the President to become law.
- Has S. 5040 become law?
- The source does not supply a confirmed lifecycle stage for S. 5040. Check the latest action and official source below.
- Who sponsored S. 5040?
- S. 5040 was sponsored by Sen. Wyden, Ron [D-OR] (D-OR), with 0 cosponsors.
- What's the latest action on S. 5040?
- Read twice and referred to the Committee on Finance. (21 Jul 2026).
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