I 

112TH CONGRESS 

1ST SESSION H. R. 2806 

To amend the Internal Revenue Code of 1986 to provide tax relief to the 

unemployed, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

AUGUST 5, 2011 

Mr. MICHAUD (for himself and Ms. RICHARDSON) 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 

tax relief to the unemployed, and for other purposes. 

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 ‘‘Workforce Fairness 

5 and Tax Relief Act of 2011’’. 

6 SEC. 2. REPEAL OF TAX ON UNEMPLOYMENT COMPENSA7 TION. 

8 (a) IN GENERAL.—Section 85 of the Internal Rev9 enue Code of 1986 is hereby repealed. 

10 (b) CONFORMING AMENDMENTS.— 


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1 (1) Subsection (p) of section 3402 of such Code 

2 is amended by striking paragraph (2) and by redes3 ignating paragraph (3) as paragraph (2). 

4 (2) Section 6050B of such Code (relating to re5 turns relating to unemployment compensation) is 

6 hereby repealed. 

7 (3) The table of sections for part II of sub8 chapter B of chapter 1 of such Code is amended by 

9 striking the item relating to section 85. 

10 (4) The table of sections for subpart B of part 

11 III of subchapter A of chapter 61 of such Code is 

12 amended by striking the item relating to section 

13 6050B. 

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

15 this section shall apply to amounts received after Decem16 ber 31, 2010. 

17 SEC. 3. INCOME EXCLUSION FOR TRADE ADJUSTMENT AS18 SISTANCE. 

19 (a) IN GENERAL.—Part III of subchapter B of chap20 ter 1 of the Internal Revenue Code of 1986 is amended 

21 by inserting after section 139D the following new section: 

22 ‘‘SEC. 139E. TRADE ADJUSTMENT ASSISTANCE. 

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

24 trade adjustment assistance. 


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1 ‘‘(b) TRADE ADJUSTMENT ASSISTANCE.—For pur2 poses of this section, the term ‘trade adjustment assist3 ance’ means assistance authorized under chapter 2 of title 

4 II of the Trade Act of 1974 (19 U.S.C. 2271 et seq.).’’. 

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

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

7 is amended by inserting after the item relating to section 

8 139D the following new item: 

‘‘Sec. 139E. Trade Adjustment Assistance.’’. 

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

10 this section shall apply to amounts received after Decem11 ber 31, 2010. 

12 SEC. 4. UNLIMITED PENALTY-FREE DISTRIBUTIONS FROM 

13 QUALIFIED RETIREMENT PLANS TO INDIVID14 UALS AFTER SEPARATION FROM EMPLOY15 MENT. 

16 (a) UNLIMITED PENALTY-FREE DISTRIBUTIONS TO

17 UNEMPLOYED INDIVIDUALS.—Clause (i) of section 

18 72(t)(2)(D) of the Internal Revenue Code of 1986 is 

19 amended to read as follows: 

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

21 a qualified retirement plan to an individual 

22 after separation from employment if— 

23 ‘‘(I) the individual has received 

24 unemployment compensation for 24 

25 consecutive weeks under any Federal 


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1 or State unemployment compensation 

2 law by reason of such separation; and 

3 ‘‘(II) such distributions are made 

4 during any taxable year during which 

5 such unemployment compensation is 

6 paid or the succeeding taxable year.’’. 

7 (b) CONFORMING AMENDMENT.—The heading of sec8 tion 72(t)(2)(D) of such Code is amended by striking 

9 ‘‘FOR HEALTH INSURANCE PREMIUMS’’. 

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

11 this section shall apply to distributions made after Decem12 ber 31, 2010. 

Æ 


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