109 HR 4193 IH: 401(k) Penalty Relief Act of 2005 U.S. House of Representatives 2005-11-01 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

I 109th CONGRESS 1st Session H. R. 4193 IN THE HOUSE OF REPRESENTATIVES November 1, 2005 Mr. Ryan of Ohio 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 waive the 10-percent additional tax on early distributions from section 401(k) plans in the case of hardship of certain employees due to facility closures, employers in bankruptcy, or plan termination proceedings.

1.

Short title

This Act may be cited as the 401(k) Penalty Relief Act of 2005.

2.

10-percent additional tax on early distributions from qualified retirement plans not to apply to certain hardship distributions from section 401(k) plans

(a)

In General

Subparagraph (A) of section 72(t)(2) of the Internal Revenue Code of 1986 is amended by striking or at the end of clause (vi), by striking the period at the end of clause (vii) and inserting , or, and by adding at the end the following new clause: (viii)made from a cash or deferred arrangement (as defined in section 401(k)) upon the hardship of the employee if the adjusted gross income of the taxpayer for the taxable year (determined without regard to such distributions) in which such distribution is received does not exceed $100,000 ($200,000 in the case of a joint return) and— (I)the employer maintaining the plan of which such arrangement is a part is a debtor in a title 11 or similar case (as defined in section 368(a)(3)), (II)proceedings have been commenced under the Employee Retirement Income Security Act of 1974 to terminate such plan, or (III)the employee separates from employment on account of the closure of a facility of the employer.. (b)

Effective Date

The amendment made by this section shall apply to distributions after the date of the enactment of this Act.