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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Workforce Fairness 
and Tax Relief Act of 2011’’. 
SEC. 2. REPEAL OF TAX ON UNEMPLOYMENT COMPENSA-
TION. 
(a) IN GENERAL.—Section 85 of the Internal Rev-
enue Code of 1986 is hereby repealed. 
(b) CONFORMING AMENDMENTS.— 
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(1) Subsection (p) of section 3402 of such Code 
is amended by striking paragraph (2) and by redes-
ignating paragraph (3) as paragraph (2). 
(2) Section 6050B of such Code (relating to re-
turns relating to unemployment compensation) is 
hereby repealed. 
(3) The table of sections for part II of sub-
chapter B of chapter 1 of such Code is amended by 
striking the item relating to section 85. 
(4) The table of sections for subpart B of part 
III of subchapter A of chapter 61 of such Code is 
amended by striking the item relating to section 
6050B. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to amounts received after Decem-
ber 31, 2010. 
SEC. 3. INCOME EXCLUSION FOR TRADE ADJUSTMENT AS-
SISTANCE. 
(a) IN GENERAL.—Part III of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 is amended 
by inserting after section 139D the following new section: 
‘‘SEC. 139E. TRADE ADJUSTMENT ASSISTANCE. 
‘‘(a) IN GENERAL.—Gross income shall not include 
trade adjustment assistance. 
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‘‘(b) TRADE ADJUSTMENT ASSISTANCE.—For pur-
poses of this section, the term ‘trade adjustment assist-
ance’ means assistance authorized under chapter 2 of title 
II of the Trade Act of 1974 (19 U.S.C. 2271 et seq.).’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for part III of subchapter B of chapter 1 of such Code 
is amended by inserting after the item relating to section 
139D the following new item: 
‘‘Sec. 139E. Trade Adjustment Assistance.’’. 
(c) EFFECTIVE DATE.—The amendment made by 
this section shall apply to amounts received after Decem-
ber 31, 2010. 
SEC. 4. UNLIMITED PENALTY-FREE DISTRIBUTIONS FROM 
QUALIFIED RETIREMENT PLANS TO INDIVID-
UALS AFTER SEPARATION FROM EMPLOY-
MENT. 
(a) UNLIMITED PENALTY-FREE DISTRIBUTIONS TO 
UNEMPLOYED
INDIVIDUALS.—Clause (i) of section 
72(t)(2)(D) of the Internal Revenue Code of 1986 is 
amended to read as follows: 
‘‘(i) IN GENERAL.—Distributions from 
a qualified retirement plan to an individual 
after separation from employment if— 
‘‘(I) the individual has received 
unemployment compensation for 24 
consecutive weeks under any Federal 
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or State unemployment compensation 
law by reason of such separation; and 
‘‘(II) such distributions are made 
during any taxable year during which 
such unemployment compensation is 
paid or the succeeding taxable year.’’. 
(b) CONFORMING AMENDMENT.—The heading of sec-
tion 72(t)(2)(D) of such Code is amended by striking 
‘‘FOR HEALTH INSURANCE PREMIUMS’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to distributions made after Decem-
ber 31, 2010. 
Æ 
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