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103D CONGRESS

1ST SESSION H. R. 1094

To amend the Internal Revenue Code of 1986 to provide that distributions

to involuntarily unemployed individuals from individual retirement accounts will not be subject to the additional tax on early distributions.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 24, 1993

Mr. DIXON (for himself, Mr. RANGEL, Mrs. MALONEY, Mr. HILLIARD, Mr.

DELLUMS, Mr. FRANK of Massachusetts, Ms. WOOLSEY, Mr. JEFFERSON, Mr. MINGE, Mr. KOPETSKI, Mr. FROST, Mr. HOBSON, Mr.

BARRETT of Wisconsin, and Mr. GUNDERSON) 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 provide

that distributions to involuntarily unemployed individuals

from individual retirement accounts will not be subject

to the additional tax on early distributions.

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

3 That (a) paragraph (2) of section 72(t) of the Internal

4 Revenue Code of 1986 (relating to exceptions) is amended

5 by adding at the end thereof the following new subpara6 graph:
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1 ‘‘(D) DISTRIBUTIONS TO INVOLUNTARILY

2 UNEMPLOYED INDIVIDUALS.—Any distribution

3 from an individual retirement plan to an indi4 vidual during any period—

5 ‘‘(i) for which such individual is re6 ceiving unemployment compensation (as

7 defined in section 85(b)), or

8 ‘‘(ii) for which such individual would

9 have been entitled to receive unemployment

10 compensation (as so defined) but for—

11 ‘‘(I) the termination of the period

12 during which such compensation was

13 payable, or

14 ‘‘(II) an exhaustion of such indi15 vidual’s rights to such compensation.’’

16 (b) Subsection (t) of section 72 of such Code is

17 amended by adding at the end thereof the following new

18 paragraph:

19 ‘‘(6) RECONTRIBUTION OF CERTAIN DISTRIBU20 TIONS TO INVOLUNTARILY UNEMPLOYED.—

21 ‘‘(A) IN GENERAL.—If an individual re22 ceived a distribution described in paragraph

23 (2)(D), such individual may recontribute such

24 distribution to an individual retirement plan in

25 the manner provided in this paragraph.
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1 ‘‘(B) METHOD OF MAKING

2 RECONTRIBUTION.—Any recontribution of a

3 distribution described in paragraph (2)(D) re4 ceived by any individual—

5 ‘‘(i) may be made only during the 1-

6 year period following the first week of dis7 qualifying employment after the receipt of

8 such distribution,

9 ‘‘(ii) shall not exceed the portion of

10 such distribution which was included in

11 gross income reduced by any prior

12 recontribution under this subsection with

13 respect to such distribution, and

14 ‘‘(iii) shall be made by making a pay15 ment in cash for the benefit of such indi16 vidual to an individual retirement plan.

17 An individual making a contribution as

18 recontribution under this subsection shall des19 ignate (in the manner prescribed by the Sec20 retary) such contribution as a recontribution

21 under this paragraph and shall specify the dis22 tribution in respect of which such

23 recontribution is being made.

24 ‘‘(C) TREATMENT OF RECONTRIBUTION.—
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1 ‘‘(i) DEDUCTION ALLOWED.—There

2 shall be allowed as a deduction to an indi3 vidual making a recontribution under this

4 paragraph an amount equal to the amount

5 so recontributed. Such deduction shall be

6 allowable in computing adjusted gross in7 come and shall be allowed for the taxable

8 year in which such recontribution is made.

9 ‘‘(ii) TREATED AS ROLLOVER CON10 TRIBUTION.—For purposes of this title,

11 any recontribution under this subsection

12 shall be treated as a rollover contribution

13 described in section 403(b)(8).

14 ‘‘(D) WEEK OF DISQUALIFYING EMPLOY15 MENT.—For purposes of subparagraph (A), the

16 term ‘week of disqualifying employment’ means

17 any week during which the individual has em18 ployment which disqualifies the individual from

19 receiving unemployment compensation or would

20 so disqualify the individual but for a prior ex21 haustion of the individual’s rights to unemploy22 ment compensation or termination of the period

23 during which such compensation was payable.’’

24 (c) The amendments made by this section shall apply

25 to distributions made after December 31, 1992.
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