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Bill Boosts Income Annuities

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Lawmakers have introduced a House bill that would provide a 50% tax exclusion, up to $10,000 a year, on the income from a non-qualified lifetime annuity.

The bill, H.R. 2748, the Retirement Security Needs Lifetime Pay Act, also would provide a 25% tax exemption on income from annuities sold with the guarantee provisions if the annuities were held in individual retirement accounts, or in qualified retirement plans other than defined benefit plans.

The bill would exclude the value of longevity insurance from amounts subject to required minimum distributions while changing the rules governing taxation of payments from partially annuitized deferred annuity contracts.

The bill was introduced by Reps. Earl Pomeroy, D-N.D, and Ginny Brown-Waite, R-Fla.