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119-s-5204119th CongressWALLET

SMART Savings Act of 2026

Sponsored By: Senator Barrasso, John [R-WY]

Introduced

Summary

This bill would narrow which individual account plans are subject to federal prohibited-transaction rules by redefining "plan" to cover only certain 401(a) trusts and 403(a) plans that are tax-exempt under section 501(a). It would also reshape section 4975's prohibited-transaction framework and set a clarified self-dealing rule for individual retirement accounts that defines a carve-out for certain "relationship benefits."

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  • Savers with IRAs: An IRA would cease to be an IRA for the taxable year if the owner or beneficiary engages in a transaction using plan income or assets for personal benefit or receives consideration tied to that transaction, except for defined "relationship benefits." The bill also treats separate employer-maintained accounts as separate IRAs.
  • Employer and tax-exempt plans: By linking the definition of "plan" to 401(a) trusts and 403(a) plans exempt under 501(a), the bill narrows which individual-account arrangements are treated as plans under section 4975 and thus which accounts face those prohibited-transaction rules.
  • Advisers, employers, and other parties: The bill strikes several paragraphs in section 4975(c) and redesignates subsection language, changing the structure of prohibited transactions that apply to covered plans and prompting changes to compliance and transaction treatment.

Changes apply to transactions after the date of enactment.

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Bill Overview

Analyzed Economic Effects

2 provisions identified: 0 benefits, 1 costs, 1 mixed.

IRAs could lose tax status

This bill would change IRA self-dealing rules. If, in any taxable year, you or your beneficiary use IRA income or assets for your own interest or get personal payment from a party dealing with the plan (other than defined "relationship benefits"), the account would stop being an IRA as of the first day of that year. The bill would also say the individual is the account creator, treat separate employer-held accounts as separate IRAs, and define limited "relationship benefits." These rules would apply to transactions after enactment.

New definition of covered plans

This bill would redefine which employer or association accounts count as a "plan" for prohibited-transaction rules. A plan would only be a 401(a) trust or a 403(a) plan that is tax-exempt under section 501(a). The bill would also remove several paragraphs from the prohibited-transaction rules and redesignate others, changing which transactions are barred for those covered plans. These changes would apply to transactions after enactment.

Sponsors & CoSponsors

Sponsor

Barrasso, John [R-WY]

WY • R

Cosponsors

  • Sen. Blackburn, Marsha [R-TN]

    TN • R

    Sponsored 7/30/2026

  • Sen. Daines, Steve [R-MT]

    MT • R

    Sponsored 8/6/2026

Roll Call Votes

No roll call votes available for this bill.

View on Congress.gov
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