I 

109TH CONGRESS 

1ST SESSION H. R. 3478

To amend the Internal Revenue Code of 1986 to permit military death 

gratuities to be contributed to certain tax-favored accounts. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 27, 2005

Mr. JONES of North Carolina 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 permit 

military death gratuities to be contributed to certain 

tax-favored accounts.

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

3 SECTION 1. CONTRIBUTIONS OF MILITARY DEATH GRATU4 ITIES TO CERTAIN TAX-FAVORED ACCOUNTS. 

5 (a) ROTH IRAS.—Subsection (e) of section 408A of 

6 the Internal Revenue Code of 1986 (relating to qualified 

7 rollover contribution) is amended to read as follows: 

8 ‘‘(e) QUALIFIED ROLLOVER CONTRIBUTION.—For 

9 purposes of this section—
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1 ‘‘(1) IN GENERAL.—The term ‘qualified rollover 

2 contribution’ means a rollover contribution to a Roth 

3 IRA from another such account, or from an indi4 vidual retirement plan, but only if such rollover con5 tribution meets the requirements of section 

6 408(d)(3). Such term includes a rollover contribu7 tion described in section 402A(c)(3)(A). For pur8 poses of section 408(d)(3)(B), there shall be dis9 regarded any qualified rollover contribution from an 

10 individual retirement plan (other than a Roth IRA) 

11 to a Roth IRA. 

12 ‘‘(2) MILITARY DEATH GRATUITY.—

13 ‘‘(A) IN GENERAL.—The term ‘qualified 

14 rollover contribution’ includes a contribution to 

15 a Roth IRA maintained for the benefit of an in16 dividual to the extent that such contribution 

17 does not exceed the amount received by such in18 dividual under section 1477 of title 10, United 

19 States Code, or under section 1967 of title 38 

20 of such Code, if such contribution is made not 

21 later than 1 year after the day on which such 

22 individual receives such amount. 

23 ‘‘(B) ANNUAL LIMIT ON NUMBER OF

24 ROLLOVERS NOT TO APPLY.—Section 

25 408(d)(3)(B) shall not apply with respect to 
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1 amounts treated as a rollover by the subpara2 graph (A). 

3 ‘‘(C) APPLICATION OF SECTION 72.—For 

4 purposes of applying section 72 in the case of 

5 a distribution which is not a qualified distribu6 tion, the amount treated as a rollover by the 

7 subparagraph (A) shall be treated as invest8 ment in the contract.’’. 

9 (b) HEALTH SAVINGS ACCOUNTS AND ARCHER

10 MSAS.—Sections 220(f)(5) and 223(f)(5) of such Code 

11 are both amended by adding at the end the following flush 

12 sentence: ‘‘For purposes of subparagraphs (A) and (B), 

13 rules similar to the rules of section 408A(e)(2) (relating 

14 to rollover treatment for contributions of military death 

15 gratuity) shall apply.’’. 

16 (c) EDUCATION SAVINGS ACCOUNTS.—Section 

17 530(d)(5) of such Code is amended by adding at the end 

18 the following new sentence: ‘‘For purposes of this para19 graph, rules similar to the rules of section 408A(e)(2) (re20 lating to rollover treatment for contributions of military 

21 death gratuity) shall apply.’’. 

22 (d) EFFECTIVE DATES.—

23 (1) IN GENERAL.—Except as provided by para24 graph (2), the amendments made by this section 

25 shall apply with respect to deaths from injuries oc-
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1 curring on or after the date of the enactment of this 

2 Act. 

3 (2) APPLICATION OF AMENDMENTS TO DEATHS

4 FROM INJURIES OCCURRING ON OR AFTER OCTOBER

5 7, 2001, AND BEFORE ENACTMENT.—The amend6 ments made by this section shall apply to any con7 tribution made pursuant to section 408A(e)(2), 

8 220(f)(5), 223(f)(5), or 530(d)(5) of the Internal 

9 Revenue Code of 1986, as amended by this Act, with 

10 respect to amounts received under section 1477 of 

11 title 10, United States Code, or under section 1967 

12 of title 38 of such Code, for deaths from injuries oc13 curring on or after October 7, 2001, and before the 

14 date of the enactment of this Act if such contribu15 tion is made not later than 1 year after the date of 

16 the enactment of this Act.

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