[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1531 Introduced in Senate (IS)]
107th CONGRESS
1st Session
S. 1531
To amend the Internal Revenue Code of 1986 to provide a waiver of the
early withdrawal penalty for distributions from qualified retirement
plans to individuals called to active duty during the national
emergency declared by the President on September 14, 2001, and for
other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
October 11, 2001
Mr. Smith of New Hampshire 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 provide a waiver of the
early withdrawal penalty for distributions from qualified retirement
plans to individuals called to active duty during the national
emergency declared by the President on September 14, 2001, and for
other purposes.
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 ``Military Call-Up Relief Act''.
SEC. 2. WAIVER OF EARLY WITHDRAWAL PENALTY FOR DISTRIBUTIONS FROM
QUALIFIED RETIREMENT PLANS TO INDIVIDUALS CALLED TO
ACTIVE DUTY DURING THE NATIONAL EMERGENCY DECLARED BY THE
PRESIDENT ON SEPTEMBER 14, 2001.
(a) Waiver For Certain Distributions.--
(1) In general.--Section 72(t)(2) of the Internal Revenue
Code of 1986 (relating to 10-percent additional tax on early
distributions from qualified retirement plans) is amended by
adding at the end the following:
``(G) Distributions to individuals performing
national emergency active duty.--Any distribution to an
individual who, at the time of the distribution, is a
member of a reserve component called or ordered to
active duty pursuant to a provision of law referred to
in section 101(a)(13)(B) of title 10, United States
Code, during the period of the national emergency
declared by the President on September 14, 2001.''.
(2) Waiver of underpayment penalty.--Section 6654(e)(3) of
such Code (relating to waiver in certain cases) is amended by
adding at the end the following:
``(C) Certain early withdrawals from retirement
plans.--No addition to tax shall be imposed under
subsection (a) with respect to any underpayment to the
extent such underpayment was created or increased by
any distribution described in section 72(t)(2)(G).''.
(3) Effective date.--The amendments made by this subsection
shall apply to distributions made to an individual after
September 13, 2001.
(b) Catch-up Contributions Allowed.--
(1) Individual retirement accounts.--Section 219(b)(5) of
the Internal Revenue Code of 1986 (relating to deductible
amount) is amended by adding at the end the following:
``(D) Catch-up contributions for certain
distributions.--In the case of an individual who has
received a distribution described in section
72(t)(2)(G), the deductible amount for any taxable year
shall be increased by an amount equal to--
``(i) the aggregate amount of such
distributions (not attributable to earnings)
made with respect to such individual, over
``(ii) the aggregate amount of such
distributions (not attributable to earnings)
previously taken into account under this
subparagraph or section 414(w).''.
(2) Roth iras.--Section 408A(c) of such Code (relating to
treatment of contributions) is amended by redesignating
paragraph (7) as paragraph (8) and by inserting after paragraph
(6) the following:
``(7) Catch-up contributions for certain distributions.--
Any contribution described in section 219(b)(5)(D) shall not be
taken into account for purposes of paragraph (2).''.
(3) Employer plans.--Section 414 of such Code (relating to
definitions and special rules) is amended by adding at the end
the following:
``(w) Catch-up contributions for certain distributions.--
``(1) In general.--An applicable employer plan shall not be
treated as failing to meet any requirement of this title solely
because the plan permits an applicable participant to make
additional elective deferrals in any plan year.
``(2) Limitation on amount of additional deferrals.--
``(A) In general.--A plan shall not permit
additional elective deferrals under paragraph (1) for
any year in an amount greater than the lesser of--
``(i) the applicable dollar amount, or
``(ii) the excess (if any) of--
``(I) the participant's
compensation (as defined in section
415(c)(3)) for the year, over
``(II) any other elective deferrals
of the participant for such year which
are made without regard to this
subsection.
``(B) Applicable dollar amount.--For purposes of
this paragraph, the applicable dollar amount with
respect to a participant shall be an amount equal to--
``(i) the aggregate amount of distributions
described in section 72(t)(2)(G) (not
attributable to earnings) made with respect to
such participant, over
``(ii) the aggregate amount of such
distributions (not attributable to earnings)
previously taken into account under this
subsection or section 219(b)(5)(B).
``(3) Treatment of contributions.--Rules similar to the
rules of paragraphs (3) and (4) of subsection (v) shall apply
with respect to contributions made under this subsection.
``(4) Definitions.--For purposes of this subsection, the
terms `applicable employer plan' and `elective deferral' have
the same meanings given such terms in subsection (v)(6).''.
(4) Conforming amendment.--Section 414(v)(2)(A)(ii)(II) of
such Code (relating to limitation on amount of additional
deferrals) is amended by inserting ``(other than deferrals
under subsection (w))'' after ``deferrals''.
(5) Effective date.--The amendments made by this subsection
shall apply to contributions in taxable years ending after
December 31, 2001.
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