House, Senate Agree to Improve IRAs for Single-Income Couples

WASHINGTON â€”  House and Senate lawmakers agreed to improve Individual Retirement Accounts for homemakers as they opened negotiations Tuesday on a package of tax breaks in legislation raising the minimum wage.

In the opening round of the conference, House lawmakers offered to accept a provision in the Senate version of the bill that would allow nonworking spouses to contribute up to $2,000 to an IRA, the same as working spouses.

Such one-income couples are now limited to a maximum $2,250 contribution, while couples in which both spouses work can contribute up to $4,000.

“This is long overdue. It is something for which I’ve been fighting for more than a decade,� said Senate Finance Committee Chairman William Roth (R-Del.).

Taxpayers without a pension plan at work are eligible to make tax-free contributions to IRAs, as are pension-covered single taxpayers earning up to $35,000 and couples earning up to $50,000.

House lawmakers also agreed to restore the 10% excise tax on airline tickets and other aviation taxes that lapsed at the start of the year. To pay for various tax breaks, the Senate bill would restore the aviation taxes, which bring in about $5 billion a year.

House Ways and Means Committee Chairman Bill Archer (R-Texas) wants to save the revenue to help pay for possible separate legislation in September offering families a per-child tax break and investors a reduction in capital gains taxes.

Senators were meeting Tuesday night to formulate a counteroffer to the House, and lawmakers from both chambers hoped to wrap up the talks today. Congress could send the bill to the White House before lawmakers leave for their August recess.