Hardship Outlays to protect Mortgagee Equity (HOME) Act - Amends the Internal Revenue Code to allow taxpayers to withdraw amounts from their tax-exempt pension and retirement plans, without incurring the 10% penalty otherwise imposed on such withdrawals, to make mortgage payments on their principal residences.
[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 1656 Introduced in Senate (IS)]
112th CONGRESS
1st Session
S. 1656
To amend the Internal Revenue Code of 1986 to provide penalty free
distributions from certain retirement plans for mortgage payments with
respect to a principal residence and to modify the rules governing
hardship distributions.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
October 5, 2011
Mr. Isakson introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide penalty free
distributions from certain retirement plans for mortgage payments with
respect to a principal residence and to modify the rules governing
hardship distributions.
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 ``Hardship Outlays to protect
Mortgagee Equity (HOME) Act''.
SEC. 2. WAIVER OF TAX ON EARLY DISTRIBUTIONS FROM CERTAIN RETIREMENT
PLANS FOR MORTGAGE PAYMENTS WITH RESPECT TO A PRINCIPAL
RESIDENCE.
(a) In General.--Paragraph (2) of section 72(t) of the Internal
Revenue Code of 1986 is amended by adding at the end the following new
subparagraph:
``(H) Distributions for principal residence
mortgage payments.--Distributions to an individual
which are qualified principal residence mortgage
payment distributions (as defined in paragraph (9)).
Distributions shall not be taken into account under the
preceding sentence if such distributions are described
in subparagraph (A), (C), (D), (E), or (F) or to the
extent paragraph (1) does not apply to such
distributions by reason of subparagraph (B).''.
(b) Qualified Principal Residence Mortgage Payment Distributions.--
Subsection (t) of section 72 of such Code is amended by redesignating
paragraphs (9) and (10) as paragraphs (10) and (11), respectively, and
by inserting after paragraph (8) the following new paragraph:
``(9) Qualified principal residence mortgage payment
distributions.--
``(A) In general.--For purposes of paragraph
(2)(H), the term `qualified principal residence
mortgage payment distribution' means any payment or
distribution received by an individual to the extent
such payment or distribution is used by the individual
before the close of the 120th day after the day on
which such payment or distribution is received to pay
qualified mortgage costs with respect to a principal
residence (within the meaning of section 121) of such
individual or the spouse of such individual.
``(B) Aggregate lifetime dollar limitation.--The
aggregate amount of payments or distributions received
by an individual which may be treated as qualified
principal residence mortgage payment distributions for
any taxable year shall not exceed the excess (if any)
of--
``(i) $50,000, over
``(ii) the aggregate amounts treated as
qualified principal residence mortgage payment
distributions with respect to such individual
for all prior taxable years.
``(C) Plan dollar limitation.--The aggregate amount
of payments or distributions received by an individual
which may be treated as qualified principal residence
mortgage payment distributions with respect to any
qualified retirement plan (as defined in section
4974(c)) for any taxable year shall not exceed one-half
the present value of the nonforfeitable accrued benefit
of the individual under the plan (determined as of the
beginning of such taxable year).
``(D) Qualified mortgage costs.--For purposes of
this paragraph, the term `qualified mortgage costs'
means amounts paid as principal or interest on
acquisition indebtedness, as defined in section
163(h)(3)(B), except that--
``(i) the dollar limitation of clause (ii)
of such section shall not apply, and
``(ii) any reference to a qualified
residence shall be treated as a reference to
the principal residence referred to in
subparagraph (A).''.
(c) Conforming Amendments.--
(1) Section 401(k)(2)(B)(i) of such Code is amended by
striking ``or'' at the end of subclause (IV), by striking
``and'' at the end of subclause (V) and inserting ``or'', and
by adding at the end the following new subclause:
``(VI) in the case of a qualified
principal residence mortgage payment
distribution (as defined in section
72(t)(9)), the date of such
distribution, and''.
(2) Paragraphs (7)(A)(ii) and (11)(C) of section 403(b) of
such Code are each amended by striking ``section 72(t)(2)(G)''
and inserting ``subparagraph (G) or (H) of section 72(t)''.
(d) Effective Date.--The amendments made by this section shall
apply to distributions made in taxable years ending after the date of
the enactment of this Act.
<all>
Introduced in Senate
Read twice and referred to the Committee on Finance.
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