Workers Severance Tax Reduction Act of 2009

Workers Severance Tax Reduction Act of 2009 - Amends the Internal Revenue Code to exclude from the gross income of individual taxpayers severance payments up to $150,000 for separation from employment due to a workforce reduction. Terminates such exclusion after 2010.

[Congressional Bills 111th Congress]
[From the U.S. Government Printing Office]
[H.R. 154 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 154

   To amend the Internal Revenue Code to exclude certain amounts of 
                 severance payments from gross income.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 6, 2009

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

_______________________________________________________________________

                                 A BILL


 
   To amend the Internal Revenue Code to exclude certain amounts of 
                 severance payments from gross income.

    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 ``Workers Severance Tax Reduction Act 
of 2009''.

SEC. 2. EXCLUSION FROM INCOME OF SEVERANCE PAYMENT AMOUNTS.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to items specifically excluded 
from gross income) is amended by inserting after section 139B the 
following new section:

``SEC. 139C. SEVERANCE PAYMENTS.

    ``(a) In General.--In the case of an individual, gross income shall 
not include any qualified severance payment.
    ``(b) Limitation.--The amount to which the exclusion under 
subsection (a) applies shall not exceed $40,000 with respect to each 
separation from employment described in subsection (c)(1)(B).
    ``(c) Qualified Severance Payment.--For purposes of this section--
            ``(1) In general.--The term `qualified severance payment' 
        means any payment received by an individual if--
                    ``(A) such payment was paid by such individual's 
                employer on account of such individual's separation 
                from employment, and
                    ``(B) such separation was in connection with a 
                reduction in the work force of the employer.
            ``(2) Limitation.--Such term shall not include any payment 
        received by an individual if the aggregate payments received 
        with respect to the separation from employment exceed $150,000.
    ``(d) Termination.--This section shall not apply to any payment for 
a separation from employment occurring after December 31, 2010.''.
    (b) Clerical Amendment.--The table of sections for part III of 
subchapter B of chapter 1 of such Code is amended by inserting after 
the item relating to section 139B the following new item:

``Sec. 139C. Severance payments.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to payments made for separations from employment occurring after 
December 31, 2007.
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