SIMPLE AND SEP ROTH IRAS.

SEC. 601. SIMPLE AND SEP ROTH IRAS.(a) In General.—Section 408A is amended by striking subsection (f). (b) Rules Relating to Simplified Employee Pensions.—(1) Contributions.—Section 402(h)(1) is amended by striking “and” at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting “, and”, and by adding at the end the following new subparagraph:“(C) in the case of any contributions pursuant to a simplified employer pension which are made to an individual retirement plan designated as a Roth IRA, such contribution shall not be excludable from gross income.” . (2) Distributions.—Section 402(h)(3) is amended by inserting “(or section 408A(d) in the case of an individual retirement plan designated as a Roth IRA)” before the period at the end. (3) Election required.—Section 408(k) is amended by redesignating paragraphs (7), (8), and (9) as paragraphs (8), (9), and (10), respectively, and by inserting after paragraph (6) the following new paragraph:“(7) Roth contribution election.—An individual retirement plan which is designated as a Roth IRA shall not be treated as a simplified employee pension under this subsection unless the employee elects for such plan to be so treated (at such time and in such manner as the Secretary may provide).” . (c) Rules Relating to Simple Retirement Accounts.—(1) Election required.—Section 408(p), as amended by the preceding provisions of this Act, is further amended by adding at the end the following new paragraph:“(12) Roth contribution election.—An individual retirement plan which is designated as a Roth IRA shall not be treated as a simple retirement account under this subsection unless the employee elects for such plan to be so treated (at such time and in such manner as the Secretary may provide).” . (2) Rollovers.—Section 408A(e) is amended by adding at the end the following new paragraph:“(3) Simple retirement accounts.—In the case of any payment or distribution out of a simple retirement account (as defined in section 408(p)) with respect to which an election has been made under section 408(p)(12) and to which 72(t)(6) applies, the term ‘qualified rollover contribution’ shall not include any payment or distribution paid into an account other than another simple retirement account (as so defined).” . (d) Conforming Amendment.—Section 408A(d)(2)(B) is amended by inserting “, or employer in the case of a simple retirement account (as defined in section 408(p)) or simplified employee pension (as defined in section 408(k)),” after “individual’s spouse”. (e) Effective Date.—The amendments made by this section shall apply to taxable years beginning after December 31, 2022.136 STAT. 5391