SAFER Act
Bill: S.3993 | Sponsor: Sen. Cortez Masto, Catherine (D-NV)
Policy area: Taxation

Summary:
Savings Access For Escaping and Rebuilding Act of 2022 or the SAFER Act
This bill allows penalty-free distributions from tax-exempt retirement plans for domestic abuse victims.

To amend the Internal Revenue Code of 1986 to allow penalty-free 
     withdrawals from retirement plans for domestic abuse victims.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Savings Access For Escaping and 
Rebuilding Act of 2022'' or the ``SAFER Act''.

SEC. 2. PENALTY-FREE WITHDRAWALS FROM RETIREMENT PLANS FOR INDIVIDUALS 
              IN CASE OF DOMESTIC ABUSE.

    (a) In General.--Section 72(t)(2) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new subparagraph:
                    ``(I) Distributions from retirement plan in case of 
                domestic abuse.--
                            ``(i) In general.--Any eligible 
                        distribution to a domestic abuse victim.
                            ``(ii) Limitation.--The aggregate amount 
                        which may be treated as an eligible 
                        distribution to a domestic abuse victim by any 
                        individual shall not exceed an amount equal to 
                        the lesser of--
                                    ``(I) $10,000, or
                                    ``(II) 50 percent of the present 
                                value of the nonforfeitable accrued 
                                benefit of the employee under the plan.
                            ``(iii) Eligible distribution to a domestic 
                        abuse victim.--For purposes of this 
                        subparagraph--
                                    ``(I) In general.--A distribution 
                                shall be treated as an eligible 
                                distribution to a domestic abuse victim 
                                if such distribution is from an 
                                applicable eligible retirement plan to 
                                an individual and made during the 1-
                                year period beginning on any date on 
                                which the individual is a victim of 
                                domestic abuse by a spouse or domestic 
                                partner.
                                    ``(II) Domestic abuse.--The term 
                                `domestic abuse' means physical, 
                                psychological, sexual, emotional, or 
                                economic abuse, including efforts to 
                                control, isolate, humiliate, or 
                                intimidate the victim, or to undermine 
                                the victim's ability to reason 
                                independently, including by means of 
                                abuse of the victim's child or another 
                                family member living in the household.
                            ``(iv) Treatment of plan distributions.--
                                    ``(I) In general.--If a 
                                distribution to an individual would 
                                (without regard to clause (ii)) be an 
                                eligible distribution to a domestic 
                                abuse victim, a plan shall not be 
                                treated as failing to meet any 
                                requirement of this title merely 
                                because the plan treats the 
                                distribution as an eligible 
                                distribution to a domestic abuse 
                                victim, unless the aggregate amount of 
                                such distributions from all plans 
                                maintained by the employer (and any 
                                member of any controlled group which 
                                includes the employer) to such 
                                individual exceeds the limitation under 
                                clause (ii).
                                    ``(II) Controlled group.--For 
                                purposes of subclause (I), the term 
                                `controlled group' means any group 
                                treated as a single employer under 
                                subsection (b), (c), (m), or (o) of 
                                section 414.
                            ``(v) Amount distributed may be repaid.--
                                    ``(I) In general.--Any individual 
                                who receives a distribution described 
                                in clause (i) may, at any time during 
                                the 3-year period beginning on the day 
                                after the date on which such 
                                distribution was received, make one or 
                                more contributions in an aggregate 
                                amount not to exceed the amount of such 
                                distribution to an applicable eligible 
                                retirement plan of which such 
                                individual is a beneficiary and to 
                                which a rollover contribution of such 
                                distribution could be made under 
                                section 402(c), 403(a)(4), 403(b)(8), 
                                408(d)(3), or 457(e)(16), as the case 
                                may be.
                                    ``(II) Limitation on contributions 
                                to applicable eligible retirement plans 
                                other than iras.--The aggregate amount 
                                of contributions made by an individual 
                                under subclause (I) to any applicable 
                                eligible retirement plan which is not 
                                an individual retirement plan shall not 
                                exceed the aggregate amount of eligible 
                                distributions to a domestic abuse 
                                victim which are made from such plan to 
                                such individual. Subclause (I) shall 
                                not apply to contributions to any 
                                applicable eligible retirement plan 
                                which is not an individual retirement 
                                plan unless the individual is eligible 
                                to make contributions (other than those 
                                described in subclause (I)) to such 
                                applicable eligible retirement plan.
                                    ``(III) Treatment of repayments of 
                                distributions from applicable eligible 
                                retirement plans other than iras.--If a 
                                contribution is made under subclause 
                                (I) with respect to an eligible 
                                distribution to a domestic abuse victim 
                                from an applicable eligible retirement 
                                plan other than an individual 
                                retirement plan, then the taxpayer 
                                shall, to the extent of the amount of 
                                the contribution, be treated as having 
                                received such distribution in an 
                                eligible rollover distribution (as 
                                defined in section 402(c)(4)) and as 
                                having transferred the amount to the 
                                applicable eligible retirement plan in 
                                a direct trustee to trustee transfer 
                                within 60 days of the distribution.
                                    ``(IV) Treatment of repayments for 
                                distributions from iras.--If a 
                                contribution is made under subclause 
                                (I) with respect to an eligible 
                                distribution to a domestic abuse victim 
                                from an individual retirement plan, 
                                then, to the extent of the amount of 
                                the contribution, such distribution 
                                shall be treated as a distribution 
                                described in section 408(d)(3) and as 
                                having been transferred to the 
                                applicable eligible retirement plan in 
                                a direct trustee to trustee transfer 
                                within 60 days of the distribution.
                            ``(vi) Definition and special rules.--For 
                        purposes of this subparagraph:
                                    ``(I) Applicable eligible 
                                retirement plan.--The term `applicable 
                                eligible retirement plan' means an 
                                eligible retirement plan (as defined in 
                                section 402(c)(8)(B)) other than a 
                                defined benefit plan.
                                    ``(II) Exemption of distributions 
                                from trustee to trustee transfer and 
                                withholding rules.--For purposes of 
                                sections 401(a)(31), 402(f), and 3405, 
                                an eligible distribution to a domestic 
                                abuse victim shall not be treated as an 
                                eligible rollover distribution.
                                    ``(III) Distributions treated as 
                                meeting plan distribution requirements; 
                                self-certification.--Any distribution 
                                which the employee or participant 
                                certifies as being an eligible 
                                distribution to a domestic abuse victim 
                                shall be treated as meeting the 
                                requirements of sections 
                                401(k)(2)(B)(i), 403(b)(7)(A)(i), 
                                403(b)(11), and 457(d)(1)(A).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to distributions made after the date of the enactment of this 
Act.
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