I 

109TH CONGRESS 

1ST SESSION H. R. 2968 

To amend the Internal Revenue Code of 1986 to allow penalty-free 

withdrawals from individual retirement plans for adoption expenses. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 17, 2005 

Mr. KING of New York (for himself, Mr. SHIMKUS, Mr. GRIJALVA, Mr. BURTON of Indiana, and Mr. LAHOOD) 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 allow penalty-free withdrawals from individual retirement plans 

for adoption expenses. 

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 ‘‘Dave Thomas Adop5 tion Act of 2005’’. 
2 

•HR 2968 IH 

1 SEC. 2. PENALTY-FREE WITHDRAWALS FROM INDIVIDUAL 

2 RETIREMENT PLANS FOR ADOPTION EX3 PENSES. 

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

5 the Internal Revenue Code of 1986 is amended by adding 

6 at the end the following new subparagraph: 

7 ‘‘(G) QUALIFIED ADOPTION EXPENSES.— 

8 ‘‘(i) IN GENERAL.—Distributions from 

9 an individual retirement plan to the extent 

10 that the amount of such distributions does 

11 not exceed the lesser of— 

12 ‘‘(I) $10,000 for the taxable year 

13 with respect to the adoption of a 

14 child, or 

15 ‘‘(II) the amount determined 

16 under clause (ii). 

17 ‘‘(ii) DETERMINATION OF EXPENSES

18 NOT COVERED BY CREDIT.—The amount 

19 determined under this clause is the excess 

20 (if any) of— 

21 ‘‘(I) the qualified adoption ex22 penses (as defined in section 23(d)) 

23 paid by the taxpayer during the tax24 able year with respect to the adoption 

25 of such child, over 
3 

•HR 2968 IH 

1 ‘‘(II) the amount of the credit al2 lowable under section 23 for such ex3 penses (determined as if such credit 

4 were allowed for such year without re5 gard to any limitation based on liabil6 ity for tax). 

7 ‘‘(iii) SPECIAL RULES FOR CHILD

8 WITH SPECIAL NEEDS.—In the case of an 

9 adoption of a child with special needs (as 

10 defined in section 23(d)(3))— 

11 ‘‘(I) subclauses (I) and (II) of 

12 clause (i) shall not apply, and 

13 ‘‘(II) a distribution during the 

14 applicable period from an individual 

15 retirement plan with respect to such 

16 adoption shall not be taken into ac17 count under this subparagraph to the 

18 extent that such distribution, when 

19 added to all other distributions with 

20 respect to such adoption from indi21 vidual retirement plans for the appli22 cable period, exceeds $10,000. 

23 For purposes of subclause (II), the term 

24 ‘applicable period’ means the 3-taxable 
4 

•HR 2968 IH 

1 year period beginning with the taxable year 

2 in which such adoption becomes final. 

3 ‘‘(iv) ORDERING RULE.—Distributions 

4 shall not be taken into account under 

5 clause (i) if such distributions are de6 scribed in subparagraph (A), (C), (D), (E), 

7 or (F) or to the extent paragraph (1) does 

8 not apply to such distributions by reason 

9 of subparagraph (B).’’. 

10 (b) EFFECTIVE DATE.—The amendment made by 

11 this section shall apply to distributions after the date of 

12 the enactment of this Act. 

Æ