Us Congress 2025-2026 Regular Session

Us Congress House Bill HB329 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	I
2	2	119THCONGRESS
3	3	1
4	4	STSESSION H. R. 329
5	5	To amend the Internal Revenue Code of 1986 to expand the availability
6	6	of penalty-free distributions to unemployed individuals from retirement plans.
7	7	IN THE HOUSE OF REPRESENTATIVES
8	8	JANUARY9, 2025
9	9	Mrs. W
10	10	ATSONCOLEMAN(for herself, Mrs. CHERFILUS-MCCORMICK, and Ms.
11	11	N
12	12	ORTON) introduced the following bill; which was referred to the Com-
13	13	mittee on Ways and Means
14	14	A BILL
15	15	To amend the Internal Revenue Code of 1986 to expand
16	16	the availability of penalty-free distributions to unem-
17	17	ployed individuals from retirement plans.
18	18	Be it enacted by the Senate and House of Representa-1
19	19	tives of the United States of America in Congress assembled, 2
20	20	SECTION 1. SHORT TITLE. 3
21	21	This Act may be cited as the ‘‘Expanding Penalty 4
22	22	Free Withdrawal Act’’. 5
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25	25	•HR 329 IH
26	26	SEC. 2. EXPANSION OF EXCEPTION FOR PENALTY ON 1
27	27	EARLY DISTRIBUTIONS TO UNEMPLOYED IN-2
28	28	DIVIDUALS FROM RETIREMENT PLANS. 3
29	29	(a) I
30	30	NGENERAL.—Section 72(t)(2) of the Internal 4
31	31	Revenue Code of 1986 is amended by adding at the end 5
32	32	the following new subparagraph: 6
33	33	‘‘(N) L
34	34	ONG-TERM UNEMPLOYMENT DIS -7
35	35	TRIBUTIONS.— 8
36	36	‘‘(i) I
37	37	N GENERAL.—Distributions to 9
38	38	an individual after separation from em-10
39	39	ployment— 11
40	40	‘‘(I) if such individual has re-12
41	41	ceived unemployment compensation 13
42	42	for 26 consecutive weeks under any 14
43	43	Federal or State unemployment com-15
44	44	pensation law by reason of such sepa-16
45	45	ration (or, if less, for the maximum 17
46	46	period for which unemployment com-18
47	47	pensation is available under State law 19
48	48	applicable to the individual), and 20
49	49	‘‘(II) if such distributions are 21
50	50	made during any taxable year during 22
51	51	which such unemployment compensa-23
52	52	tion is paid or the succeeding taxable 24
53	53	year. 25
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56	56	•HR 329 IH
57	57	‘‘(ii) DISTRIBUTIONS AFTER REEM -1
58	58	PLOYMENT; SELF-EMPLOYED INDIVID -2
59	59	UALS.—Rules similar to the rules of 3
60	60	clauses (ii) and (iii) of subparagraph (D) 4
61	61	shall apply for purposes of this subpara-5
62	62	graph. 6
63	63	‘‘(iii) L
64	64	IMITATION.—Clause (i) shall 7
65	65	not apply to any distribution to the extent 8
66	66	that such distribution exceeds the lesser 9
67	67	of— 10
68	68	‘‘(I) $50,000, reduced by the ag-11
69	69	gregate amount of distributions which 12
70	70	are described in clause (i) from all 13
71	71	plans of the individual during the 1- 14
72	72	year period ending on the day before 15
73	73	the date on which such distribution 16
74	74	was made, or 17
75	75	‘‘(II) the greater of $10,000 or 18
76	76	one-half of the aggregate fair market 19
77	77	value (at the time of the distribution) 20
78	78	of the individual’s qualified retirement 21
79	79	plans (as defined in section 4974(c)) 22
80	80	and the nonforfeitable portion the in-23
81	81	dividual’s defined contribution plans. 24
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84	84	•HR 329 IH
85	85	‘‘(iv) COORDINATION WITH DISTRIBU -1
86	86	TIONS TO UNEMPLOYED INDIVIDUALS FOR 2
87	87	HEALTH INSURANCE PREMIUMS .—Dis-3
88	88	tributions shall not be taken into account 4
89	89	under this subparagraph if such distribu-5
90	90	tions are described in subparagraph (D).’’. 6
91	91	(b) E
92	92	FFECTIVEDATE.—The amendments made by 7
93	93	this section shall apply to distributions made after Decem-8
94	94	ber 31, 2024. 9
95	95	Æ
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