To amend the Internal Revenue Code of 1986 to allow expanded penalty-free withdrawals from certain retirement plans during periods of unemployment.

Amends the Internal Revenue Code to exempt from the early withdrawal penalty distributions from qualified retirement plans by individuals separated from employment, as specified.

[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3489 Introduced in House (IH)]







107th CONGRESS
  1st Session
                                H. R. 3489

 To amend the Internal Revenue Code of 1986 to allow expanded penalty-
   free withdrawals from certain retirement plans during periods of 
                             unemployment.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           December 13, 2001

  Mr. Goode introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to allow expanded penalty-
   free withdrawals from certain retirement plans during periods of 
                             unemployment.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. DISTRIBUTIONS FROM CERTAIN PLANS MAY BE MADE WITHOUT PENALTY 
              DURING PERIODS OF UNEMPLOYMENT.

    (a) In General.--Paragraph (2) of section 72(t) of the Internal 
Revenue Code of 1986 (relating to exceptions to 10-percent additional 
tax on early distributions from qualified retirement plans) is amended 
by adding at the end the following new subparagraph:
                    ``(G) Additional distributions to unemployed 
                individuals.--
                            ``(i) In general.--Distributions from an 
                        individual retirement plan, or from amounts 
                        attributable to employer contributions made 
                        pursuant to elective deferrals described in 
                        subparagraph (A) or (C) of section 402(g)(3) or 
                        section 501(c)(18)(D)(iii), to an individual 
                        after separation from employment if--
                                    ``(I) such individual has received 
                                unemployment compensation for 6 
                                consecutive weeks under any Federal or 
                                State unemployment compensation law by 
                                reason of such separation, and
                                    ``(II) such distributions are made 
                                during the 1-year period beginning on 
                                the date of such separation.
                            ``(ii) Distributions after reemployment.--
                        Clause (i) shall not apply to any distribution 
                        made after the individual has been employed for 
                        at least 60 days after the separation from 
                        employment to which clause (i) applies.
                            ``(iii) Coordination with subparagraph 
                        (D).--Distributions during the period described 
                        in clause (i)(II) shall not be taken into 
                        account in applying the limitation under 
                        subparagraph (D)(i)(III).''
    (b) Conforming Amendments.--
            (1) Section 401(k)(2)(B)(i) of such Code is amended by 
        striking ``or'' at the end of subclause (III), by striking 
        ``and'' at the end of subclause (IV) and inserting ``or'', and 
        by inserting after subclause (IV) the following new subclause:
                                    ``(V) the date on which a period 
                                referred to in section 72(t)(2)(G) 
                                begins, and''.
            (2) Section 403(b)(11) of such Code is amended by striking 
        ``or'' at the end of subparagraph (A), by striking the period 
        at the end of subparagraph (B) and inserting ``, or'', and by 
        inserting after subparagraph (B) the following new 
        subparagraph:
                    ``(C) for distributions to which section 
                72(t)(2)(G) applies.''
    (c) Effective Date.--The amendments made by this section shall 
apply to distributions after the date of the enactment of this Act.
                                 <all>