Retirement Fairness and Emergency Relief Act of 2008 - Suspends for calendar 2008 and 2009 the beginning date for required distributions from certain individual retirement (IRA) plans.
Waives the 10% additional tax (penalty) under the Internal Revenue Code for early distributions from qualified retirement plans in the case of a qualified financial hardship distribution to an individual during calendar 2008-2009 of up to $15,000 per taxable year, as determined by the Secretary of the Treasury (including a qualified foreclosure distribution).
[Congressional Bills 110th Congress]
[From the U.S. Government Printing Office]
[H.R. 7278 Introduced in House (IH)]
110th CONGRESS
2d Session
H. R. 7278
To suspend the beginning date for required distributions from defined
contribution plans based on attainment of age 70\1/2\, to waive the 10
percent penalty on withdrawals from qualified retirement plans during
2008 and 2009 for financial hardship, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
November 19, 2008
Mr. Ruppersberger introduced the following bill; which was referred to
the Committee on Ways and Means
_______________________________________________________________________
A BILL
To suspend the beginning date for required distributions from defined
contribution plans based on attainment of age 70\1/2\, to waive the 10
percent penalty on withdrawals from qualified retirement plans during
2008 and 2009 for financial hardship, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Retirement Fairness and Emergency
Relief Act of 2008''.
SEC. 2. SUSPENSION OF REQUIRED BEGINNING DATE FOR DISTRIBUTIONS FROM
DEFINED CONTRIBUTION PLANS.
(a) In General.--In the case of a defined contribution plan--
(1) section 401(a)(9) of the Internal Revenue Code of 1986
shall not apply during the suspension period,
(2) in lieu of the calendar year specified in subparagraph
(C)(i) of section 401(a)(9) of such Code, the calendar year
specified in such subparagraph shall be the later of--
(A) the calendar year described in such
subparagraph (C)(i), or
(B) calendar year 2010, and
(3) the suspension period shall not be taken into account
for purposes of applying any time limitation in such section
401(a)(9).
(b) Suspension Period.--For purposes of this section, the term
``suspension period'' means the period beginning on January 1, 2008,
and ending on December 31, 2009.
(c) Application to Certain Other Plans.--The following sections
shall be applied for the suspension period under rules similar to the
rules of subsection (a) of this section--
(1) in the case of a defined contribution plan, subsections
(a) and (b) of section 403, and sections 408 and 408A, of such
Code, and
(2) in the case of an eligible deferred compensation plan
described in section 457(b) of such Code which is maintained by
an eligible employer described in section 457(e)(1)(A) of such
Code, section 457 of such Code.
(d) Application to Certain Periodic Payments.--For purposes of this
section, in the case of a defined contribution plan, the failure to
make a payment from a qualified retirement plan during the suspension
period in an amount less than would be required under the applicable
method shall not be treated as a modification for purposes of section
72(t)(2)(A)(iv) of such Code.
(e) Provisions Relating to Plan Amendments.--
(1) In general.--If this section applies to any plan or
annuity contract, such plan or contract shall be treated as
being operated in accordance with the terms of the plan during
the period described in paragraph (2)(B)(i).
(2) Amendments to which section applies.--
(A) In general.--This section shall apply to any
amendment to any plan or annuity contract which is
made--
(i) pursuant to this section or pursuant to
any regulation issued by the Secretary of the
Treasury to carry out this section, and
(ii) on or before the last day of the first
plan year beginning on or after January 1,
2009.
(B) Conditions.--This section shall not apply to
any amendment unless--
(i) during the period--
(I) beginning on the first day of
the suspension period, and
(II) ending on the date described
in subparagraph (A)(ii) (or, if
earlier, the date the plan or contract
amendment is adopted), the plan or
contract is operated as if such plan or
contract amendment were in effect, and
(ii) such plan or contract amendment
applies retroactively for such period.
(f) Effective Date.--
(1) In general.--This section shall take effect on the date
of the enactment of this Act.
(2) Recontribution of distributions before date of
enactment.--
(A) In general.--Any individual who receives a
payment or distribution during the period beginning on
January 1, 2008, and ending on the date of the
enactment of this Act from a plan to which subsection
(a) or (c) of this section applies may, before the end
of the suspension period, make one or more
contributions in an aggregate amount not to exceed the
amount of such payments or distributions to an eligible
retirement plan of which such individual is a
beneficiary and to which a rollover contribution of
such distribution could be made under section 402(c),
403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16) of such
Code, as the case may be.
(B) Treatment of repayments of distributions from
eligible retirement plans other than iras.--For
purposes of the Internal Revenue Code of 1986, if a
contribution is made pursuant to subparagraph (A) to an
eligible retirement plan other than an individual
retirement plan, then the taxpayer shall, to the extent
of the amount of the contribution, be treated as having
received such payments or distributions in an eligible
rollover distribution (as defined in section 402(c)(4)
of such Code) and as having transferred the amount to
the eligible retirement plan in a direct trustee to
trustee transfer within 60 days of the distribution.
(C) Treatment of repayments for distributions from
iras.--For purposes of the Internal Revenue Code of
1986, if a contribution is made pursuant to
subparagraph (A) to an individual retirement plan (as
defined by section 7701(a)(37) of such Code), then, to
the extent of the amount of the contribution, such
payments or distributions shall be treated as a
distribution described in section 408(d)(3) of such
Code and as having been transferred to the individual
retirement plan in a direct trustee to trustee transfer
within 60 days of the distribution.
SEC. 3. WAIVER OF 10 PERCENT PENALTY ON WITHDRAWALS FROM QUALIFIED
RETIREMENT PLANS DURING 2008 AND 2009 FOR FINANCIAL
HARDSHIP.
(a) In General.--Paragraph (1) of section 72(t) of the Internal
Revenue Code of 1986 (relating to imposition of additional tax) shall
not apply to qualified financial hardship distributions from a
qualified retirement plan (as defined in section 4974(c) of such Code),
to an individual. Distributions shall not be taken into account under
the preceding sentence if such distributions are described in
subparagraph (A), (C), (D), (E), (F), or (G) of section 72(t)(2) of
such Code or to the extent section 72(t)(1) of such Code does not apply
to such distributions by reason of section 72(t)(2)(B).
(b) Qualified Foreclosure Distributions.--For purposes of
subsection (a)--
(1) In general.--The term ``qualified financial hardship
distribution'' means any payment or distribution received after
December 31, 2007, and before January 1, 2010, by an individual
on account of financial hardship (as determined by the
Secretary of the Treasury).
(2) Limitation.--The amount of payments or distributions
received by an individual which may be treated as qualified
financial hardship distributions for any taxable year shall not
exceed $15,000.
(3) Amount distributed may be repaid.--
(A) In general.--Any individual who receives a
qualified financial hardship distribution may, at any
time during the 5-year period beginning on the day
after the date on which such distribution was received,
make one or more contributions in an aggregate amount
not to exceed the amount of such distribution to an
eligible retirement plan of which such individual is a
beneficiary and to which a rollover contribution of
such distribution could be made under section 402(c),
403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16), as the
case may be, of the Internal Revenue Code of 1986.
(B) Treatment of repayments of distributions from
eligible retirement plans other than iras.--For
purposes of the Internal Revenue Code of 1986, if a
contribution is made pursuant to subparagraph (A) with
respect to a qualified financial hardship distribution
from an eligible retirement plan other than an
individual retirement plan, then the taxpayer shall, to
the extent of the amount of the contribution, be
treated as having received the qualified financial
hardship distribution in an eligible rollover
distribution (as defined in section 402(c)(4) of such
Code) and as having transferred the amount to the
eligible retirement plan in a direct trustee to trustee
transfer within 60 days of the distribution.
(C) Treatment of repayments for distributions from
iras.--For purposes of the Internal Revenue Code of
1986, if a contribution is made pursuant to
subparagraph (A) with respect to a qualified financial
hardship distribution from an individual retirement
plan (as defined by section 7701(a)(37) of such Code),
then, to the extent of the amount of the contribution,
the qualified financial hardship distribution shall be
treated as a distribution described in section
408(d)(3) of such Code and as having been transferred
to the eligible retirement plan in a direct trustee to
trustee transfer within 60 days of the distribution.
(4) Special rules.--
(A) Exemption of distributions from trustee to
trustee transfer and withholding rules.--For purposes
of sections 401(a)(31), 402(f), and 3405 of the
Internal Revenue Code of 1986, qualified financial
hardship distributions shall not be treated as eligible
rollover distributions.
(B) Qualified financial hardship distributions
treated as meeting plan distribution requirements.--For
purposes this title, a qualified financial hardship
distribution shall be treated as meeting the
requirements of sections 401(k)(2)(B)(i),
403(b)(7)(A)(ii), 403(b)(11), and 457(d)(1)(A) of such
Code.
(c) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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