1989 Save America Tax Act

1989 Save America Tax Act - Amends the Internal Revenue Code to allow individuals to establish flexible individual retirement accounts with tax treatment similar to that for individual retirement plans. Makes contributions to such accounts nondeductible. Limits contributions to $2,000 for taxable years before 1995 and $3,000 for taxable years thereafter.

Provides that qualified distributions from such accounts, other than for general retirement purposes, include special purpose distributions made for the purchase of a first home and for medical or educational purposes. Prohibits special purpose distributions from being made during the first five years of the account.

Allows a tax credit for low-income persons of 25 percent of the amount paid into a flexible individual retirement account for each taxable year.

Increases the amount a spouse with no compensation may contribute to retirement savings.