I 112th CONGRESS 1st Session H. R. 2806 IN THE HOUSE OF REPRESENTATIVES August 5, 2011 Mr. Michaud (for himself and Ms. Richardson) 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 provide tax relief to the unemployed, and for other purposes.

1.

Short title

This Act may be cited as the Workforce Fairness and Tax Relief Act of 2011.

2.

Repeal of tax on unemployment compensation

(a)

In general

Section 85 of the Internal Revenue Code of 1986 is hereby repealed. (b)

Conforming amendments

(1)Subsection (p) of section 3402 of such Code is amended by striking paragraph (2) and by redesignating paragraph (3) as paragraph (2). (2)Section 6050B of such Code (relating to returns relating to unemployment compensation) is hereby repealed. (3)The table of sections for part II of subchapter B of chapter 1 of such Code is amended by striking the item relating to section 85. (4)The table of sections for subpart B of part III of subchapter A of chapter 61 of such Code is amended by striking the item relating to section 6050B. (c)

Effective date

The amendments made by this section shall apply to amounts received after December 31, 2010.

3.

Income exclusion for trade adjustment assistance

(a)

In general

Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 139D the following new section:

139E.

Trade Adjustment Assistance

(a)

In general

Gross income shall not include trade adjustment assistance. (b)

Trade adjustment assistance

For purposes of this section, the term trade adjustment assistance means assistance authorized under chapter 2 of title II of the Trade Act of 1974 (19 U.S.C. 2271 et seq.).

. (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 139D the following new item: Sec. 139E. Trade Adjustment Assistance. . (c)

Effective date

The amendment made by this section shall apply to amounts received after December 31, 2010.

4.

Unlimited penalty-free distributions from qualified retirement plans to individuals after separation from employment

(a)

Unlimited penalty-Free distributions to unemployed individuals

Clause (i) of section 72(t)(2)(D) of the Internal Revenue Code of 1986 is amended to read as follows: (i)

In general

Distributions from a qualified retirement plan to an individual after separation from employment if— (I)the individual has received unemployment compensation for 24 consecutive weeks under any Federal or State unemployment compensation law by reason of such separation; and (II)such distributions are made during any taxable year during which such unemployment compensation is paid or the succeeding taxable year. . (b)

Conforming amendment

The heading of section 72(t)(2)(D) of such Code is amended by striking for health insurance premiums. (c)

Effective date

The amendments made by this section shall apply to distributions made after December 31, 2010.