[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 1656 Introduced in Senate (IS)]

112th CONGRESS
  1st Session
                                S. 1656

  To amend the Internal Revenue Code of 1986 to provide penalty free 
distributions from certain retirement plans for mortgage payments with 
  respect to a principal residence and to modify the rules governing 
                        hardship distributions.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            October 5, 2011

  Mr. Isakson 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 penalty free 
distributions from certain retirement plans for mortgage payments with 
  respect to a principal residence and to modify the rules governing 
                        hardship distributions.

    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 ``Hardship Outlays to protect 
Mortgagee Equity (HOME) Act''.

SEC. 2. WAIVER OF TAX ON EARLY DISTRIBUTIONS FROM CERTAIN RETIREMENT 
              PLANS FOR MORTGAGE PAYMENTS WITH RESPECT TO A PRINCIPAL 
              RESIDENCE.

    (a) In General.--Paragraph (2) of section 72(t) of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
subparagraph:
                    ``(H) Distributions for principal residence 
                mortgage payments.--Distributions to an individual 
                which are qualified principal residence mortgage 
                payment distributions (as defined in paragraph (9)). 
                Distributions shall not be taken into account under the 
                preceding sentence if such distributions are described 
                in subparagraph (A), (C), (D), (E), or (F) or to the 
                extent paragraph (1) does not apply to such 
                distributions by reason of subparagraph (B).''.
    (b) Qualified Principal Residence Mortgage Payment Distributions.--
Subsection (t) of section 72 of such Code is amended by redesignating 
paragraphs (9) and (10) as paragraphs (10) and (11), respectively, and 
by inserting after paragraph (8) the following new paragraph:
            ``(9) Qualified principal residence mortgage payment 
        distributions.--
                    ``(A) In general.--For purposes of paragraph 
                (2)(H), the term `qualified principal residence 
                mortgage payment distribution' means any payment or 
                distribution received by an individual to the extent 
                such payment or distribution is used by the individual 
                before the close of the 120th day after the day on 
                which such payment or distribution is received to pay 
                qualified mortgage costs with respect to a principal 
                residence (within the meaning of section 121) of such 
                individual or the spouse of such individual.
                    ``(B) Aggregate lifetime dollar limitation.--The 
                aggregate amount of payments or distributions received 
                by an individual which may be treated as qualified 
                principal residence mortgage payment distributions for 
                any taxable year shall not exceed the excess (if any) 
                of--
                            ``(i) $50,000, over
                            ``(ii) the aggregate amounts treated as 
                        qualified principal residence mortgage payment 
                        distributions with respect to such individual 
                        for all prior taxable years.
                    ``(C) Plan dollar limitation.--The aggregate amount 
                of payments or distributions received by an individual 
                which may be treated as qualified principal residence 
                mortgage payment distributions with respect to any 
                qualified retirement plan (as defined in section 
                4974(c)) for any taxable year shall not exceed one-half 
                the present value of the nonforfeitable accrued benefit 
                of the individual under the plan (determined as of the 
                beginning of such taxable year).
                    ``(D) Qualified mortgage costs.--For purposes of 
                this paragraph, the term `qualified mortgage costs' 
                means amounts paid as principal or interest on 
                acquisition indebtedness, as defined in section 
                163(h)(3)(B), except that--
                            ``(i) the dollar limitation of clause (ii) 
                        of such section shall not apply, and
                            ``(ii) any reference to a qualified 
                        residence shall be treated as a reference to 
                        the principal residence referred to in 
                        subparagraph (A).''.
    (c) Conforming Amendments.--
            (1) Section 401(k)(2)(B)(i) of such Code is amended by 
        striking ``or'' at the end of subclause (IV), by striking 
        ``and'' at the end of subclause (V) and inserting ``or'', and 
        by adding at the end the following new subclause:
                                    ``(VI) in the case of a qualified 
                                principal residence mortgage payment 
                                distribution (as defined in section 
                                72(t)(9)), the date of such 
                                distribution, and''.
            (2) Paragraphs (7)(A)(ii) and (11)(C) of section 403(b) of 
        such Code are each amended by striking ``section 72(t)(2)(G)'' 
        and inserting ``subparagraph (G) or (H) of section 72(t)''.
    (d) Effective Date.--The amendments made by this section shall 
apply to distributions made in taxable years ending after the date of 
the enactment of this Act.
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