[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 1381 Introduced in Senate (IS)]


104th CONGRESS
  1st Session
                                S. 1381

To amend the Internal Revenue Code of 1986 to allow individuals who are 
 involuntarily unemployed to withdraw funds from individual retirement 
 accounts and other qualified retirement plans without incurring a tax 
                                penalty.


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                   IN THE SENATE OF THE UNITED STATES

                            November 2, 1995

Mr. Lautenberg introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to allow individuals who are 
 involuntarily unemployed to withdraw funds from individual retirement 
 accounts and other qualified retirement plans without incurring a tax 
                                penalty.

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

SECTION 1. WAIVER OF EARLY DISTRIBUTION PENALTY DURING PERIODS OF 
              INVOLUNTARY UNEMPLOYMENT.

    (a) In General.--Paragraph (2) of section 72(t) of the Internal 
Revenue Code of 1986 (relating to exceptions to 10-percent additional 
tax on early distributions from qualified plans) is amended by adding 
at the end thereof the following new subparagraph:
                    ``(D) Distributions for persons who are 
                involuntarily unemployed.--Any distributions which are 
                made during any applicable involuntary unemployment 
                period. For purposes of this subparagraph--
                            ``(i) the term `applicable involuntary 
                        unemployment period' means the consecutive 
                        period beginning on the 30th day after the 
                        first date on which an individual is entitled 
                        to receive unemployment compensation and ending 
                        with the date on which the individual begins 
                        employment which disqualifies the individual 
                        from receiving such compensation (or would 
                        disqualify if such compensation had not expired 
                        by reason of a limitation on the number of 
                        weeks of compensation); and
                            ``(ii) the term `unemployment compensation' 
                        has the meaning given such term by section 
                        85(b).''
    (b) Effective Date.--The amendment made by this section shall apply 
to distributions made after the date of the enactment of this Act.
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