Penalty-free withdrawals from retirement plans for individuals in case of domestic abuse

(a)

In general

Section 72(t)(2) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:

(I)

Distributions from retirement plan in case of domestic abuse

(i)

In general

Any eligible distribution to a domestic abuse victim.(ii)

Limitation

The aggregate amount which may be treated as an eligible distribution to a domestic abuse victim by any individual shall not exceed an amount equal to the lesser of—(I)$10,000, or(II)50 percent of the present value of the nonforfeitable accrued benefit of the employee under the plan.(iii)

Eligible distribution to a domestic abuse victim

For purposes of this subparagraph—(I)

In general

A distribution shall be treated as an eligible distribution to a domestic abuse victim if such distribution is from an applicable eligible retirement plan to an individual and made during the 1-year period beginning on the date on which the individual is a victim of domestic abuse by a spouse or domestic partner.(II)

Domestic abuse

The term domestic abuse means physical, psychological, sexual, emotional, or economic abuse, including efforts to control, isolate, humiliate, or intimidate the victim, or to undermine the victim’s ability to reason independently, including by means of abuse of the victim’s child or another family member living in the household.(iv)

Amount distributed may be repaid

(I)

In general

Any individual who receives a distribution described in clause (i) may, at any time during the 3-year period beginning on the day after the date on which such distribution was received, make one or more contributions in an aggregate amount not to exceed the amount of such distribution to an applicable eligible retirement plan of which such individual is a beneficiary and to which a rollover contribution of such distribution could be made under section 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16), as the case may be.(II)

Limitation on contributions to applicable eligible retirement plans other than IRAs

The aggregate amount of contributions made by an individual under subclause (I) to any applicable eligible retirement plan which is not an individual retirement plan shall not exceed the aggregate amount of eligible distributions to a domestic abuse victim which are made from such plan to such individual. Subclause (I) shall not apply to contributions to any applicable eligible retirement plan which is not an individual retirement plan unless the individual is eligible to make contributions (other than those described in subclause (I)) to such applicable eligible retirement plan.(III)

Treatment of repayments of distributions from applicable eligible retirement plans other than IRAs

If a contribution is made under subclause (I) with respect to an eligible distribution to a domestic abuse victim from an applicable eligible retirement plan other than an individual retirement plan, then the taxpayer shall, to the extent of the amount of the contribution, be treated as having received such distribution in an eligible rollover distribution (as defined in section 402(c)(4)) and as having transferred the amount to the applicable eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution.(IV)

Treatment of repayments for distributions from IRAs

If a contribution is made under subclause (I) with respect to an eligible distribution to a domestic abuse victim from an individual retirement plan, then, to the extent of the amount of the contribution, such distribution shall be treated as a distribution described in section 408(d)(3) and as having been transferred to the applicable eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution.(v)

Definition and special rule

For purposes of this subparagraph:(I)

Applicable eligible retirement plan

The term applicable eligible retirement plan means an eligible retirement plan (as defined in section 402(c)(8)(B)) other than a defined benefit plan.(II)

Distributions treated as meeting plan distribution requirements; self-certification

Any distribution which the employee or participant certifies as being an eligible distribution to a domestic abuse victim shall be treated as meeting the requirements of sections 401(k)(2)(B)(i), 403(b)(7)(A)(ii), 403(b)(11), and 457(d)(1)(A).

(b)

Effective date

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