[Congressional Bills 103th Congress] [From the U.S. Government Publishing Office] [H.R. 3758 Introduced in House (IH)] 103d CONGRESS 2d Session H. R. 3758 To amend the Internal Revenue Code of 1986 to allow reservists called to active duty for certain purposes to make penalty-free withdrawals from certain retirement plans to the extent of lost income while on active duty. _______________________________________________________________________ IN THE HOUSE OF REPRESENTATIVES February 1, 1994 Mr. Walker 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 allow reservists called to active duty for certain purposes to make penalty-free withdrawals from certain retirement plans to the extent of lost income while on active duty. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. PENALTY-FREE DISTRIBUTIONS FROM CERTAIN RETIREMENT PLANS FOR RESERVISTS CALLED TO ACTIVE DUTY FOR CERTAIN PURPOSES. (a) In General.--Paragraph (2) of section 72(t) of the Internal Revenue Code of 1986 (relating to exceptions to 10-percent additional tax on early distributions from qualified retirement plans) is amended by adding at the end thereof the following new subparagraph: ``(D) Distributions for reservists serving on active duty for certain purposes.--Any qualified reservist distribution (as defined in paragraph (6)) from an individual retirement plan or from amounts attributable to employer contributions made pursuant to elective deferrals described in subparagraph (A) or (C) of section 402(g)(3) or section 501(c)(18)(D)(iii).'' (b) Qualified Reservist Distribution.--Subsection (t) of section 72 of such Code is amended by adding at the end thereof the following new paragraph: ``(6) Qualified reservist distribution.--For purposes of paragraph (2)(D)-- ``(A) In general.--The term `qualified reservist distribution' means any distribution or payment to a qualified reservist during the eligible distribution period. ``(B) Limitation on amount.--Paragraph (2)(D) shall not apply to the extent that the aggregate amount withdrawn during the eligible distribution period exceeds the excess (if any) of-- ``(i) the amount earned income which such individual would have received during the eligible distribution period but for serving on active duty as described in subparagraph (C), over ``(ii) the earned income received during such period. ``(C) Qualified reservist.--For purposes of this paragraph, the term `qualified reservist' means any member of a reserve component of the Armed Forces of the United States who is called or ordered to active duty in support of a contingency operation (as defined in section 101 of title 10, United States Code). ``(D) Eligible distribution period.--For purposes of this paragraph, the term `eligible distribution period' means the period the individual is serving on active duty as described in subparagraph (C).'' (c) Conforming Amendments.-- (1) Section 401(k)(2)(B)(i) of such Code is amended by striking ``or'' at the end of subclause (III), by striking ``and'' at the end of subclause (IV) and inserting ``or'', and by inserting after subclause (IV) the following new subclause: ``(V) the date on which qualified reservist distributions (as defined in section 72(t)(6)) are made, and''. (2) Section 403(b)(11) of such Code is amended by striking ``or'' at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting ``, or'', and by inserting after subparagraph (B) the following new subparagraph: ``(C) for qualified reservist distributions (as defined in section 72(t)(6)).'' (d) Effective Date.--The amendments made by this section shall apply to distributions after the date of the enactment of this Act. <all>