H. R. 3234
IN THE HOUSE OF REPRESENTATIVES
October 14, 2011
Mr. Platts (for himself and Mr. Lynch) introduced the following bill; which was referred to the Committee on Ways and Means
To amend the Internal Revenue Code of 1986 to allow penalty-free withdrawals from pension plans for unemployed individuals who have exhausted their rights to unemployment compensation.
This Act may be cited as the
Unemployed Worker Assistance Act of
Penalty-free withdrawals for the unemployed who have exhausted their rights to unemployment compensation
Paragraph (2) of section 72(t) of the Internal Revenue Code of 1986 (relating to subsection not to apply to certain distributions) is amended by adding at the end the following new subparagraph:
Distributions to unemployed individuals who have exhausted their rights to unemployment compensation
Distributions to an individual after separation from employment if—
such individual exhausted all rights to unemployment compensation under any Federal or State unemployment compensation law with respect to such separation, and
such distribution is made while such rights are exhausted and before reemployment or self-employment.
Amount distributed may be repaid
Any individual who receives a qualified 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.
Treatment of repayments of distributions from eligible retirement plans other than iras
For purposes of this title, if a contribution is made pursuant to subclause (I) with respect to a qualified 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 distribution in an eligible rollover distribution (as defined in section 402(c)(4)) and as having transferred the amount to the eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution.
Treatment of repayments for distributions from iras
For purposes of this title, if a contribution is made pursuant to subclause (I) with respect to a qualified distribution from an individual retirement plan (as defined by section 7701(a)(37)), then, to the extent of the amount of the contribution, the qualified distribution shall be treated as a distribution described in section 408(d)(3) and as having been transferred to the eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution.
Qualified distributions treated as meeting plan distribution requirements
For purposes of this title, a qualified 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).
Exemption of distributions from trustee to trustee transfer and withholding rules
For purposes of sections 401(a)(31), 402(f), and 3405, qualified distributions shall not be treated as eligible rollover distributions.
For purposes of this subparagraph—
The term qualified distribution means any distribution meeting the requirements of clause (i).
Eligible retirement plan
The term eligible retirement plan has the meaning given such term by section 402(c)(8)(B).
Reemployment and self-employment
Rules similar to the rules of clauses (ii) and (iii) of subparagraph (D) shall apply for purposes of this subparagraph.
The amendment made by subsection (a) shall apply to distributions made after the date of the enactment of this Act.