I 111th CONGRESS 1st Session H. R. 154 IN THE HOUSE OF REPRESENTATIVES January 6, 2009 Mr. McHugh introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code to exclude certain amounts of severance payments from gross income.
1.
Short title
This Act may be cited as the Workers Severance Tax Reduction Act of 2009.
2.
Exclusion from income of severance payment amounts
(a)
In General
Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 (relating to items specifically excluded from gross income) is amended by inserting after section 139B the following new section:
139C.
Severance payments
(a)
In General
In the case of an individual, gross income shall not include any qualified severance payment. (b)
Limitation
The amount to which the exclusion under subsection (a) applies shall not exceed $40,000 with respect to each separation from employment described in subsection (c)(1)(B). (c)
Qualified Severance Payment
For purposes of this section— (1)
In general
The term qualified severance payment means any payment received by an individual if— (A)such payment was paid by such individual’s employer on account of such individual’s separation from employment, and (B)such separation was in connection with a reduction in the work force of the employer. (2)
Limitation
Such term shall not include any payment received by an individual if the aggregate payments received with respect to the separation from employment exceed $150,000. (d)
Termination
This section shall not apply to any payment for a separation from employment occurring after December 31, 2010.
. (b)
Clerical Amendment
The table of sections for part III of subchapter B of chapter 1 of such Code is amended by inserting after the item relating to section 139B the following new item: Sec. 139C. Severance payments. . (c)
Effective Date
The amendments made by this section shall apply to payments made for separations from employment occurring after December 31, 2007.