Contributions of military death gratuities to certain tax-favored accounts

(a)

Roth IRAs

Subsection (e) of section 408A of the Internal Revenue Code of 1986 (relating to qualified rollover contribution) is amended to read as follows:

(e)

Qualified rollover contribution

For purposes of this section— (1)

In general

The term qualified rollover contribution means a rollover contribution to a Roth IRA from another such account, or from an individual retirement plan, but only if such rollover contribution meets the requirements of section 408(d)(3). Such term includes a rollover contribution described in section 402A(c)(3)(A). For purposes of section 408(d)(3)(B), there shall be disregarded any qualified rollover contribution from an individual retirement plan (other than a Roth IRA) to a Roth IRA. (2)

Military death gratuity

(A)

In general

The term qualified rollover contribution includes a contribution to a Roth IRA maintained for the benefit of an individual to the extent that such contribution does not exceed the amount received by such individual under section 1477 of title 10, United States Code, or under section 1967 of title 38 of such Code, if such contribution is made not later than 1 year after the day on which such individual receives such amount. (B)

Annual limit on number of rollovers not to apply

Section 408(d)(3)(B) shall not apply with respect to amounts treated as a rollover by subparagraph (A). (C)

Application of section 72

For purposes of applying section 72 in the case of a distribution which is not a qualified distribution, the amount treated as a rollover by the subparagraph (A) shall be treated as investment in the contract.

(b)

Health savings accounts and Archer MSAs

Sections 220(f)(5) and 223(f)(5) of such Code are both amended by adding at the end the following flush sentence: For purposes of subparagraphs (A) and (B), rules similar to the rules of section 408A(e)(2) (relating to rollover treatment for contributions of military death gratuity) shall apply.. (c)

Education savings accounts

Section 530(d)(5) of such Code is amended by adding at the end the following new sentence: For purposes of this paragraph, rules similar to the rules of section 408A(e)(2) (relating to rollover treatment for contributions of military death gratuity) shall apply.. (d)

Effective dates

(1)

In general

Except as provided by paragraph (2), the amendments made by this section shall apply with respect to deaths from injuries occurring on or after the date of the enactment of this Act. (2)

Application of amendments to deaths from injuries occurring on or after October 7, 2001, and before enactment

The amendments made by this section shall apply to any contribution made pursuant to section 408A(e)(2), 220(f)(5), 223(f)(5), or 530(d)(5) of the Internal Revenue Code of 1986, as amended by this Act, with respect to amounts received under section 1477 of title 10, United States Code, or under section 1967 of title 38 of such Code, for deaths from injuries occurring on or after October 7, 2001, and before the date of the enactment of this Act if such contribution is made not later than 1 year after the date of the enactment of this Act.