SMART Savings Act of 2026
Latest action (30 Jul 2026): Introduced
What this bill does
S. 5204, the SMART Savings Act of 2026, would amend the Internal Revenue Code's prohibited transaction rules for retirement plans under section 4975. It narrows the definition of "plan" for those rules and removes several categories of transactions currently listed as prohibited, while preserving a general exemption provision. It also amends the self-dealing rule for individual retirement accounts (IRAs) under section 408(e), clarifying that an IRA does not lose its tax-favored status merely because the account holder receives "relationship benefits"—reduced-cost, no-cost, or enhanced products or services offered based on the account's value or the fees it generates.
The bill would primarily affect IRA owners, retirement plan administrators, and financial institutions that offer tiered services, discounts, or added benefits tied to account balances or fees. By excluding such relationship benefits from the self-dealing prohibition, the bill would allow these arrangements to continue without disqualifying the account, while keeping in place the core rule against an account holder personally dealing in the plan's assets for personal gain.
The changes would apply to transactions occurring after the bill's enactment. The bill was introduced in the Senate on July 30, 2026, by Senator John Barrasso with Senator Marsha Blackburn as a cosponsor, and was referred to the Senate Committee on Finance. It has not yet been considered or voted on by that committee or the full Senate.
Plain-English summary generated by Bill100 AI from the official record. Always verify against the source below.
Official summary
This bill is in the first stage of the legislative process. It was introduced into Congress on July 30, 2026. It will typically be considered by committee next before it is possibly sent on to the House or Senate as a whole.
Common questions
- What does S. 5204 do?
- S. 5204, the SMART Savings Act of 2026, would amend the Internal Revenue Code's prohibited transaction rules for retirement plans under section 4975. It narrows the definition of "plan" for those rules and removes several categories of transactions currently listed as prohibited, while preserving a general exemption provision. It also amends the self-dealing rule for individual retirement accounts (IRAs) under section 408(e), clarifying that an IRA does not lose its tax-favored status merely because the account holder receives "relationship benefits"—reduced-cost, no-cost, or enhanced products or services offered based on the account's value or the fees it generates. The bill would primarily affect IRA owners, retirement plan administrators, and financial institutions that offer tiered services, discounts, or added benefits tied to account balances or fees. By excluding such relationship benefits from the self-dealing prohibition, the bill would allow these arrangements to continue without disqualifying the account, while keeping in place the core rule against an account holder personally dealing in the plan's assets for personal gain. The changes would apply to transactions occurring after the bill's enactment. The bill was introduced in the Senate on July 30, 2026, by Senator John Barrasso with Senator Marsha Blackburn as a cosponsor, and was referred to the Senate Committee on Finance. It has not yet been considered or voted on by that committee or the full Senate.
- Has S. 5204 become law?
- Not yet. As of 30 Jul 2026, S. 5204 is introduced.
- Who sponsored S. 5204?
- S. 5204 was sponsored by Sen. John Barrasso [R-WY] (Republican-WY), with 2 cosponsors.
- What's the latest action on S. 5204?
- Introduced (30 Jul 2026).
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