To amend the Internal Revenue Code of 1986 to allow certain individuals who have attained age 50 and who are unemployed to receive distributions from qualified retirement plans without incurring a 10 percent additional tax.

January 25, 2005

Mr. PLATTS introduced the following bill; which was referred to the Committee on Ways and Means

To amend the Internal Revenue Code of 1986 to allow certain individuals who have attained age 50 and who are unemployed to receive distributions from qualified retirement plans without incurring a 10 percent additional tax.

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

SECTION 1. NO ADDITIONAL TAX ON DISTRIBUTIONS FROM QUALIFIED RETIREMENT PLANS TO CERTAIN INDIVIDUALS WHO HAVE ATTAINED AGE 50 AND WHO ARE UNEMPLOYED.

(a) In General- Paragraph (2) of section 72(t) of the Internal Revenue Code of 1986 (relating to subsection not to apply to certain distributions) is amended by adding at the end the following new subparagraph:

`(G) DISTRIBUTIONS TO CERTAIN INDIVIDUALS WHO HAVE ATTAINED AGE 50 AND WHO ARE UNEMPLOYED-

`(i) IN GENERAL- Distributions to an individual after separation from employment if--

`(I) as of the date of such distribution, such individual has attained age 50,

`(II) such individual has received unemployment compensation for 12 consecutive weeks under any Federal or State unemployment compensation law by reason of such separation, and

`(III) such distribution is made during any taxable year during which such unemployment compensation is paid or any succeeding taxable year.

`(ii) REEMPLOYMENT AND SELF-EMPLOYMENT- Rules similar to the rules of clauses (ii) and (iii) of subparagraph (D) shall apply for purposes of this subparagraph.'.

(b) Effective Date- The amendment made by subsection (a) shall apply to distributions made after December 31, 2004.

END