Proposed legislation from our friends in the House and Senate:

HR 5318 (The Small Business Investment Penalty Relief Act of 2010) would waive the 10% penalty on early distributions from retirement plans if the funds were used for small-business investments. The bill is similar to HR 3612 and HR 3390.

S 3720 and HR 6099 (The Automatic IRA Act of 2010) would require businesses with more than 10 workers to automatically deduct a percentage of an employee’s paycheck and deposit in an IRA. Affected businesses would receive tax credits to offset the cost of setting up such accounts.

HR 4742 seeks to encourage small businesses to offer retirement savings plans to their employees by modifying rules that apply to Simple IRAs including raising contribution limits and allowing plan participants to roll over their retirement assets. The bill also would allow businesses with fewer than 100 workers to pool together to offer a retirement program to their employees.

HR 5077 would increase Alternative Minimum Tax (“AMT”) exemption amounts permanently and index them for inflation in future years. For 2010 the exemption would increase to $75,000 and $100,000 for individual and joint filers respectively.

HR 5444 (The Private Option Health Care Act) would repeal the 7.5% of Adjusted Gross Income (“AGI”) threshold for the deduction of medical expenses and replace it with a tax credit worth 100% of health care expenses.

HR 5491 (The Caregiver Tax Relief Act of 2010) aims to provide tax breaks to caregivers of ailing or elderly family members by creating a $2,500 tax credit for caregivers whose incomes don’t exceed specified amounts. The bill is similar to S 2958 which would also provide a tax deduction for Long-Term Care (“LTC”) insurance premiums.

HR 5058 (The Ponzi Scheme Victims’ Tax Relief Act of 2010) would increase the number of years the victims of Ponzi schemes could declare Net Operating Losses (“NOLs”) due to such schemes in an effort to recoup taxes already paid on non-existent earnings. The bill is similar to S 3166.

HR 5030 (The College Savings Flexibility Act of 2010) would temporarily allow distributions from §529 college savings plans to be used to repay student loans. The provision would apply to interest or principal paid from 1/1/10 – 12/31/14.

HR 4702 (The Citizens’ Choice Act of 2010) would allow taxpayers to take a credit of up to $1,000 for charitable contributions. It also would allow taxpayers to choose to take the existing itemized deduction for charitable contributions if they prefer.

HR 4421 would suspend Required Minimum Distribution (“RMD”) rules for retirement accounts through the end of this year.

S 3149 (The Wall Street Compensation Reform Act of 2010) would make compensation above $1,000,000 paid to executives at financial corporations non-deductible as a business expense unless it was performance-based. The legislation specifically targets “systemically significant” financial institutions defined by asset size and debt-to-equity ratio.