[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7146 Introduced in House (IH)]
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117th CONGRESS
2d Session
H. R. 7146
To amend the Internal Revenue Code of 1986 to provide for penalty-free
withdrawals from retirement accounts for certain emergency expenses,
and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 17, 2022
Mr. Wenstrup (for himself and Mr. Suozzi) 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 for penalty-free
withdrawals from retirement accounts for certain emergency expenses,
and for other purposes.
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 ``Enhancing Emergency and Retirement
Savings Act of 2022''.
SEC. 2. WITHDRAWALS FOR CERTAIN EMERGENCY EXPENSES.
(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:
``(I) Distributions for certain emergency
expenses.--
``(i) In general.--Any emergency personal
expense distribution.
``(ii) Annual limitation.--Not more than 1
distribution per calendar year may be treated
as an emergency personal expense distribution
by any individual.
``(iii) Dollar limitation.--The amount
which may be treated as an emergency personal
expense distribution by any individual in any
calendar year shall not exceed the lesser of
$1,000 or an amount equal to the excess of--
``(I) the individual's total
nonforfeitable accrued benefit under
the plan (the individual's total
interest in the plan in the case of an
individual retirement plan), determined
as of the date of each such
distribution, over
``(II) $1,000.
``(iv) Emergency personal expense
distribution.--For purposes of this
subparagraph, the term `emergency personal
expense distribution' means any distribution
from an applicable eligible retirement plan (as
defined in subparagraph (H)(vi)(I)) to an
individual for purposes of meeting
unforeseeable or immediate financial needs
relating to necessary personal or family
emergency expenses. The administrator of an
applicable eligible retirement plan may rely on
an employee's certification that the employee
satisfies the conditions of the preceding
sentence in determining whether any
distribution is an emergency personal expense
distribution.
``(v) Treatment of plan distributions.--If
a distribution to an individual would (without
regard to clause (iii)) be an emergency
personal expense distribution, a plan shall not
be treated as failing to meet any requirement
of this title merely because the plan treats
the distribution as an emergency personal
expense distribution, unless the aggregate
amount of such distributions from all plans
maintained by the employer (and any member of
any controlled group which includes the
employer, determined as provided in
subparagraph (H)(iv)(II)) to such individual
exceeds the limitation determined under clause
(iii).
``(vi) Amount distributed may be repaid.--
``(I) In general.--Any individual
who receives an emergency personal
expense distribution 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
emergency personal expense
distributions 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 emergency
personal expense distribution 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 emergency
personal expense distribution 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.
``(vii) Limitation on subsequent
distributions.--If a distribution is treated as
an emergency personal expense distribution in
any calendar year with respect to a plan, no
amount may be treated as such a distribution in
any subsequent calendar year with respect to
such plan unless--
``(I) such previous distribution is
fully repaid pursuant to clause (vi) to
such plan, or
``(II) the aggregate of the
elective deferrals and employee
contributions to the plan (the total
amounts contributed to the plan in the
case of an individual retirement plan)
subsequent to such previous
distribution is at least equal to the
amount of such previous distribution
which has not been so repaid.
``(viii) Special rules.--Rules similar to
the rules of subclauses (II) and (IV) of
subparagraph (H)(vi) shall apply to any
emergency personal expense distribution.''.
(b) Effective Date.--The amendments made by this section shall
apply to distributions made after December 31, 2021.
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