I 

112TH CONGRESS 

1ST SESSION H. R. 2262 

To amend the Internal Revenue Code of 1986 to exclude from gross income 

amounts distributed from tax-favored accounts during a period of unemployment. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 21, 2011 

Mr. PAUL 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 exclude 

from gross income amounts distributed from tax-favored 

accounts during a period of unemployment. 

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 ‘‘Unemployment Assist5 ance Act of 2011’’. 


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1 SEC. 2. EXCLUSION FROM GROSS INCOME OF UNEMPLOY2 MENT DISTRIBUTIONS FROM TAX-FAVORED 

3 ACCOUNTS. 

4 (a) IN GENERAL.—Part III of subchapter B of chap5 ter 1 of the Internal Revenue Code is amended by insert6 ing after section 139D the following new section: 

7 ‘‘SEC. 139E. DISTRIBUTIONS FROM TAX-FAVORED ACCOUNT 

8 DURING PERIODS OF UNEMPLOYMENT. 

9 ‘‘(a) IN GENERAL.—Gross income shall not include 

10 any qualified unemployment distribution from a tax-fa11 vored account. 

12 ‘‘(b) DEFINITIONS.—For purposes of this section— 

13 ‘‘(1) QUALIFIED UNEMPLOYMENT DISTRIBU14 TION.— 

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

16 unemployment distribution’ means, with respect 

17 to an individual, any distribution from a tax-fa18 vored account of such individual to the extent 

19 such distribution— 

20 ‘‘(i) is made during a period of unem21 ployment which does not exceed 2 years, 

22 and 

23 ‘‘(ii) is used during such period by the 

24 individual to pay qualified living expenses, 

25 qualified health care expenses, or qualified 

26 education or job training expenses. 


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1 ‘‘(B) QUALIFIED LIVING EXPENSES.—The 

2 term ‘qualified living expenses’ means any of 

3 the following expenses of the taxpayer: rent, ac4 quisition indebtedness (as defined in section 

5 164(h)(3)(B)), groceries, repairs with respect to 

6 a vehicle or principal residence (within the 

7 meaning of section 121) of the taxpayer, and 

8 any other such necessary and common expenses 

9 of the individuals. Such term shall not include 

10 any prepayment of rent or acquisition indebted11 ness. 

12 ‘‘(C) QUALIFIED HEALTH CARE EX13 PENSES.—The term ‘qualified health care ex14 penses’ means amounts paid by such individual 

15 for medical care (as defined in section 213(d) 

16 for such individual, the spouse of such indi17 vidual, and any dependent (as defined in section 

18 152, determined without regard to subsections 

19 (b)(1), (b)(2), and (d)(1)(B) thereof) of such 

20 individual, but only to the extent such amounts 

21 are not compensated for by insurance or other22 wise. 

23 ‘‘(D) QUALIFIED EDUCATION OR JOB

24 TRAINING EXPENSES.—The term ‘qualified edu25 cation or job training expenses’ means any exVerDate Mar 15 2010 23:45 Jun 23, 2011 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2262.IH H2262

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1 penses which would (but for subsection (c)) be 

2 qualified tuition and related expenses for pur3 poses of section 25A(c) (relating to Lifetime 

4 Learning Credit). 

5 ‘‘(2) TAX-FAVORED ACCOUNT.—The term ‘tax6 favored account’ means any of the following: 

7 ‘‘(A) An eligible retirement plan (as de8 fined in section 402(c)(8)(B)). 

9 ‘‘(B) A health savings account described in 

10 section 223. 

11 ‘‘(C) A Roth IRA. 

12 ‘‘(D) A qualified tuition program described 

13 in section 529. 

14 ‘‘(c) AMOUNT DISTRIBUTED MAY BE REPAID.— 

15 ‘‘(1) IN GENERAL.—Any individual who receives 

16 a qualified unemployment distribution may make 

17 one or more contributions in an aggregate amount 

18 not to exceed the amount of such distribution to a 

19 tax-favored account of which such individual is a 

20 beneficiary and to which a rollover contribution of 

21 such distribution could be made under section 

22 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 

23 457(e)(16), 223(f)(5), or 529(c)(3)(C), as the case 

24 may be. 


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1 ‘‘(2) TREATMENT OF REPAYMENTS OF DIS2 TRIBUTIONS FROM ELIGIBLE RETIREMENT PLANS

3 OTHER THAN IRAS.—For purposes of this title, if a 

4 contribution is made pursuant to paragraph (1) with 

5 respect to a qualified unemployment distribution 

6 from an eligible retirement plan other than an indi7 vidual retirement plan, then the taxpayer shall, to 

8 the extent of the amount of the contribution, be 

9 treated as having received the qualified unemploy10 ment distribution in an eligible rollover distribution 

11 (as defined in section 402(c)(4)) and as having 

12 transferred the amount to the eligible retirement 

13 plan in a direct trustee to trustee transfer within 60 

14 days of the distribution. 

15 ‘‘(3) TREATMENT OF REPAYMENTS FOR DIS16 TRIBUTIONS FROM IRAS.—For purposes of this title, 

17 if a contribution is made pursuant to paragraph (1) 

18 with respect to a qualified unemployment distribu19 tion from an individual retirement plan (as defined 

20 by section 7701(a)(37)), then, to the extent of the 

21 amount of the contribution, the qualified unemploy22 ment distribution shall be treated as a distribution 

23 described in section 408(d)(3) and as having been 

24 transferred to the eligible retirement plan in a direct 


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1 trustee to trustee transfer within 60 days of the dis2 tribution. 

3 ‘‘(4) OTHER TAX-FAVORED ACCOUNTS.—For 

4 purposes of this title, if a contribution is made pur5 suant to paragraph (a) with respect to a qualified 

6 unemployment distribution— 

7 ‘‘(A) from a health savings account de8 scribed in section 223, or 

9 ‘‘(B) from a qualified tuition program de10 scribed in section 529, 

11 then, to the extent of the amount of the contribu12 tion, the qualified unemployment distribution shall 

13 be treated as a distribution described in section 

14 529(c)(3)(C) or 223(f)(5), as the case may be, and 

15 as having been transferred to such account or pro16 gram, as the case may be, within 60 days of the dis17 tribution. 

18 ‘‘(d) DENIAL OF DOUBLE BENEFIT.—Any qualified 

19 unemployment distribution with respect to any expense de20 scribed in (b)(1)(A)(ii) which is excluded from gross in21 come under this section shall not be taken into account 

22 in determining any deduction or credit under this chapter 

23 relating to such an expense.’’. 

24 (b) CLERICAL AMENDMENT.—The table of sections 

25 for part III of subchapter B of chapter 1 of such Code 


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1 is amended by inserting after the item relating to section 

2 139D the following new section: 

‘‘Sec. 139E. Distributions from tax-favored account during periods of unemployment.’’. 

3 (c) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to distributions made after the 

5 date of the enactment of this Act. 

Æ 


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