108TH CONGRESS

2D SESSION H. R. 1779

AN ACT

To amend the Internal Revenue Code of 1986 to

an extended period, and for other purposes.or national guardsman is called to active duty forplans during the period that a military reservistallow penalty-free withdrawals from retirement

108TH CONGRESS

2D SESSION H. R. 1779

AN ACT

To amend the Internal Revenue Code of 1986 to allow penalty-free withdrawals from retirement plans during the

period that a military reservist or national guardsman

is called to active duty for an extended period, and

for other purposes.
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1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Guardsmen and Re5 servists Financial Relief Act of 2004’’.

6 SEC. 2. PENALTY-FREE WITHDRAWALS FROM RETIREMENT

7 PLANS FOR INDIVIDUALS CALLED TO ACTIVE

8 DUTY FOR AT LEAST 179 DAYS.

9 (a) IN GENERAL.—Paragraph (2) of section 72(t) of

10 the Internal Revenue Code of 1986 (relating to 10-percent

11 additional tax on early distributions from qualified retire12 ment plans) is amended by adding at the end the following

13 new subparagraph:

14 ‘‘(G) DISTRIBUTIONS FROM RETIREMENT

15 PLANS TO INDIVIDUALS CALLED TO ACTIVE

16 DUTY.—

17 ‘‘(i) IN GENERAL.—Any qualified re18 servist distribution.

19 ‘‘(ii) AMOUNT DISTRIBUTED MAY BE

20 REPAID.—Any individual who receives a

21 qualified reservist distribution may, at any

22 time during the 2-year period beginning on

23 the day after the end of the active duty pe24 riod, make one or more contributions to an

25 individual retirement plan of such indi-
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1 vidual in an aggregate amount not to ex2 ceed the amount of such distribution. The

3 dollar limitations otherwise applicable to

4 contributions to individual retirement plans

5 shall not apply to any contribution made

6 pursuant to the preceding sentence. No de7 duction shall be allowed for any contribu8 tion pursuant to this clause.

9 ‘‘(iii) QUALIFIED RESERVIST DIS10 TRIBUTION.—For purposes of this sub11 paragraph, the term ‘qualified reservist

12 distribution’ means any distribution to an

13 individual if—

14 ‘‘(I) such distribution is from an

15 individual retirement plan, or from

16 amounts attributable to employer con17 tributions made pursuant to elective

18 deferrals described in subparagraph

19 (A) or (C) of section 402(g)(3) or sec20 tion 501(c)(18)(D)(iii),

21 ‘‘(II) such individual was (by rea22 son of being a member of a reserve

23 component (as defined in section 101

24 of title 37, United States Code)), or25 dered or called to active duty for a pe-
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1 riod in excess of 179 days or for an

2 indefinite period, and

3 ‘‘(III) such distribution is made

4 during the period beginning on the

5 date of such order or call and ending

6 at the close of the active duty period.

7 ‘‘(iv) APPLICATION OF SUBPARA8 GRAPH.—This subparagraph applies to in9 dividuals ordered or called to active duty

10 after September 11, 2001, and before Sep11 tember 12, 2005. In no event shall the 2-

12 year period referred to in clause (ii) end

13 before the date which is 2-years after the

14 date of the enactment of this subpara15 graph.’’.

16 (b) CONFORMING AMENDMENTS.—

17 (1) Section 401(k)(2)(B)(i) of such Code is

18 amended by striking ‘‘or’’ at the end of subclause

19 (III), by striking ‘‘and’’ at the end of subclause (IV)

20 and inserting ‘‘or’’, and by inserting after subclause

21 (IV) the following new subclause:

22 ‘‘(V) the date on which a period

23 referred to in section

24 72(t)(2)(G)(iii)(III) begins, and’’.
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1 (2) Section 403(b)(11) of such Code is amend2 ed by striking ‘‘or’’ at the end of subparagraph (A),

3 by striking the period at the end of subparagraph

4 (B) and inserting ‘‘, or’’, and by inserting after sub5 paragraph (B) the following new subparagraph:

6 ‘‘(C) for distributions to which section

7 72(t)(2)(G) applies.’’.

8 (c) EFFECTIVE DATE.—The amendment made by

9 this section shall apply to distributions after September

10 11, 2001.

Passed the House of Representatives April 21, 2004.

Attest:

Clerk.