SMART Savings Act of 2026

This bill amends the Internal Revenue Code of 1986 to exempt individual account plans from certain prohibited transaction rules. It changes the definition of a 'plan' for purposes of prohibited transaction rules, removes certain related provisions, and preserves self-dealing prohibitions for individual retirement accounts.

Sec. 2, Exemption from prohibited transaction rules: This section amends the definition of 'plan' in section 4975(e)(1) of the Internal Revenue Code to mean only a trust described in section 401(a) that is part of a plan, or a plan described in section 403(a), that is exempt from tax under section 501(a). It also makes conforming amendments by striking paragraphs (3), (4), (5), and (6) of section 4975(c) and redesignating paragraph (7) as paragraph (3), and by striking clause (ii) of section 4975(f)(8)(E) and redesignating clause (iii) as clause (ii). Additionally, it preserves self-dealing prohibitions by amending section 408(e)(2)(A) to specify that if an individual or beneficiary deals with plan income or assets for their own interest or account, or receives consideration from a party dealing with the plan, the account ceases to be an individual retirement account, except for the receipt of 'relationship benefits,' which are defined as reduced-cost or no-cost products or services, enhanced or improved products or services, or other benefits received based on account value or fees. The amendments apply to transactions occurring after the date of enactment.