Plain English summary not yet available
The full original text is available below. Check back soon as we process this bill.
I
116TH CONGRESS
1ST SESSION H. R. 1295
To amend the Internal Revenue Code of 1986 to expand the availability
of penalty-free distributions to unemployed individuals from retirement plans.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 14, 2019
Mrs. WATSON COLEMAN 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 expand
the availability of penalty-free distributions to unem-
ployed individuals from retirement plans.
Be it enacted by the Senate and House of Representa-
1
tives of the United States of America in Congress assembled,
2
SECTION 1. SHORT TITLE.
3
This Act may be cited as the ‘‘Expanding Penalty
4
Free Withdrawal Act of 2019’’.
5
VerDate Sep 11 2014
21:37 Mar 01, 2019
Jkt 089200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H1295.IH
H1295
pamtmann on DSKBFK8HB2PROD with BILLS
2
•HR 1295 IH
SEC. 2. EXPANSION OF EXCEPTION FOR PENALTY ON
1
EARLY DISTRIBUTIONS TO UNEMPLOYED IN-
2
DIVIDUALS FROM RETIREMENT PLANS.
3
(a) IN GENERAL.—Section 72(t)(2) of the Internal
4
Revenue Code of 1986 is amended by adding at the end
5
the following new subparagraph:
6
‘‘(H) LONG-TERM
UNEMPLOYMENT
DIS-
7
TRIBUTIONS.—
8
‘‘(i) IN
GENERAL.—Distributions to
9
an individual after separation from em-
10
ployment—
11
‘‘(I) if such individual has re-
12
ceived unemployment compensation
13
for 26 consecutive weeks under any
14
Federal or State unemployment com-
15
pensation law by reason of such sepa-
16
ration (or, if less, for the maximum
17
period for which unemployment com-
18
pensation is available under State law
19
applicable to the individual), and
20
‘‘(II) if such distributions are
21
made during any taxable year during
22
which such unemployment compensa-
23
tion is paid or the succeeding taxable
24
year.
25
VerDate Sep 11 2014
21:37 Mar 01, 2019
Jkt 089200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H1295.IH
H1295
pamtmann on DSKBFK8HB2PROD with BILLS
3
•HR 1295 IH
‘‘(ii) DISTRIBUTIONS
AFTER
REEM-
1
PLOYMENT;
SELF-EMPLOYED
INDIVID-
2
UALS.—Rules similar to the rules of
3
clauses (ii) and (iii) of subparagraph (D)
4
shall apply for purposes of this subpara-
5
graph.
6
‘‘(iii) LIMITATION.—Clause (i) shall
7
not apply to any distribution to the extent
8
that such distribution exceeds the lesser
9
of—
10
‘‘(I) $50,000, reduced by the ag-
11
gregate amount of distributions which
12
are described in clause (i) from all
13
plans of the individual during the 1-
14
year period ending on the day before
15
the date on which such distribution
16
was made, or
17
‘‘(II) the greater of $10,000 or
18
one-half of the aggregate fair market
19
value (at the time of the distribution)
20
of the individual’s qualified retirement
21
plans (as defined in section 4974(c))
22
and the nonforfeitable portion the in-
23
dividual’s defined contribution plans.
24
VerDate Sep 11 2014
21:37 Mar 01, 2019
Jkt 089200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H1295.IH
H1295
pamtmann on DSKBFK8HB2PROD with BILLS
4
•HR 1295 IH
‘‘(iv) COORDINATION WITH DISTRIBU-
1
TIONS TO UNEMPLOYED INDIVIDUALS FOR
2
HEALTH
INSURANCE
PREMIUMS.—Dis-
3
tributions shall not be taken into account
4
under this subparagraph if such distribu-
5
tions are described in subparagraph (D).’’.
6
(b) EFFECTIVE DATE.—The amendments made by
7
this section shall apply to distributions made after Decem-
8
ber 31, 2019.
9
Æ
VerDate Sep 11 2014
21:37 Mar 01, 2019
Jkt 089200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6301
E:\BILLS\H1295.IH
H1295
pamtmann on DSKBFK8HB2PROD with BILLS