I.R.C. § 72(a) General Rules For Annuities
I.R.C. § 72(a)(1) Income Inclusion —
Except as otherwise provided in this chapter, gross income
includes any amount received as an annuity (whether for a period certain
or during one or more lives) under an annuity, endowment, or life
insurance contract.
I.R.C. § 72(a)(2) Partial Annuitization —
If any amount is received as an annuity for a period
of 10 years or more or during one or more lives under any portion
of an annuity, endowment, or life insurance contract—
I.R.C. § 72(a)(2)(A) —
such portion shall be treated as a separate
contract for purposes of this section,
I.R.C. § 72(a)(2)(B) —
for purposes of applying subsections (b), (c), and (e), the investment in the contract
shall be allocated pro rata between each portion of the contract from
which amounts are received as an annuity and the portion of the contract
from which amounts are not received as an annuity, and
I.R.C. § 72(a)(2)(C) —
a separate annuity starting date under
subsection (c)(4) shall
be determined with respect to each portion of the contract from which
amounts are received as an annuity.
I.R.C. § 72(b) Exclusion Ratio
I.R.C. § 72(b)(1) In General —
Gross income does not include that part of any amount
received as an annuity under an annuity, endowment, or life insurance
contract which bears the same ratio to such amount as the investment
in the contract (as of the annuity starting date) bears to the expected
return under the contract (as of such date).
I.R.C. § 72(b)(2) Exclusion Limited To Investment —
The portion of any amount received as an annuity which
is excluded from gross income under paragraph (1) shall not exceed the unrecovered
investment in the contract immediately before the receipt of such
amount.
I.R.C. § 72(b)(3) Deduction Where Annuity Payments Cease Before Entire Investment
Recovered
I.R.C. § 72(b)(3)(A) In General —
If—
I.R.C. § 72(b)(3)(A)(i) —
after the annuity starting date, payments
as an annuity under the contract cease by reason of the death of
an annuitant, and
I.R.C. § 72(b)(3)(A)(ii) —
as of the date of such cessation,
there is unrecovered investment in the contract, the amount of such
unrecovered investment (in excess of any amount specified in subsection (e)(5) which was not included
in gross income) shall be allowed as a deduction to the annuitant
for his last taxable year.
I.R.C. § 72(b)(3)(B) Payments To Other Persons —
In the case of any contract which provides for payments
meeting the requirements of subparagraphs (B) and (C) of subsection (c)(2), the deduction under
subparagraph (A) shall
be allowed to the person entitled to such payments for the taxable
year in which such payments are received.
I.R.C. § 72(b)(3)(C) Net Operating Loss Deductions Provided —
For purposes of section 172,
a deduction allowed under this paragraph shall be treated as if it
were attributable to a trade or business of the taxpayer.
I.R.C. § 72(b)(4) Unrecovered Investment —
For purposes of this subsection, the unrecovered investment
in the contract as of any date is—
I.R.C. § 72(b)(4)(A) —
the investment in the contract (determined
without regard to subsection (c)(2))
as of the annuity starting date, reduced by
I.R.C. § 72(b)(4)(B) —
the aggregate amount received under
the contract on or after such annuity starting date and before the
date as of which the determination is being made, to the extent such
amount was excludable from gross income under this subtitle.
I.R.C. § 72(c) Definitions
I.R.C. § 72(c)(1) Investment In The Contract —
For purposes of subsection (b), the investment in the contract
as of the annuity starting date is—
I.R.C. § 72(c)(1)(A) —
the aggregate amount of premiums or
other consideration paid for the contract, minus
I.R.C. § 72(c)(1)(B) —
the aggregate amount received under
the contract before such date, to the extent that such amount was
excludable from gross income under this subtitle or prior income
tax laws.
I.R.C. § 72(c)(2) Adjustment In Investment Where There Is Refund Feature —
If—
I.R.C. § 72(c)(2)(A) —
the expected return under the contract
depends in whole or in part on the life expectancy of one or more
individuals;
I.R.C. § 72(c)(2)(B) —
the contract provides for payments
to be made to a beneficiary (or to the estate of an annuitant) on
or after the death of the annuitant or annuitants; and
I.R.C. § 72(c)(2)(C) —
such payments are in the nature of
a refund of the consideration paid,
then the value (computed without
discount for interest) of such payments on the annuity starting date
shall be subtracted from the amount determined under paragraph (1). Such value shall be computed
in accordance with actuarial tables prescribed by the Secretary.
For purposes of this paragraph and of subsection (e)(2)(A), the term “refund
of the consideration paid” includes amounts payable after the death
of an annuitant by reason of a provision in the contract for a life
annuity with minimum period of payments certain, but (if part of
the consideration was contributed by an employer) does not include
that part of any payment to a beneficiary (or to the estate of the
annuitant) which is not attributable to the consideration paid by
the employee for the contract as determined under paragraph (1)(A).
I.R.C. § 72(c)(3) Expected Return —
For purposes of subsection (b), the expected return under
the contract shall be determined as follows:
I.R.C. § 72(c)(3)(A) Life Expectancy —
If the expected return under the contract, for the
period on and after the annuity starting date, depends in whole or
in part on the life expectancy of one or more individuals, the expected
return shall be computed with reference to actuarial tables prescribed
by the Secretary.
I.R.C. § 72(c)(3)(B) Installment Payments —
If subparagraph (A) does
not apply, the expected return is the aggregate of the amounts receivable
under the contract as an annuity.
I.R.C. § 72(c)(4) Annuity Starting Date —
For purposes of this section, the annuity starting
date in the case of any contract is the first day of the first period
for which an amount is received as an annuity under the contract.
I.R.C. § 72(d) Special Rules For Qualified Employer Retirement Plans
I.R.C. § 72(d)(1) Simplified Method Of Taxing Annuity Payments
I.R.C. § 72(d)(1)(A) In General —
In the case of any amount received as an annuity under
a qualified employer retirement plan—
I.R.C. § 72(d)(1)(A)(i) —
subsection (b) shall not apply, and
I.R.C. § 72(d)(1)(A)(ii) —
the investment in the contract shall
be recovered as provided in this paragraph.
I.R.C. § 72(d)(1)(B) Method Of Recovering Investment In Contract
I.R.C. § 72(d)(1)(B)(i) In General —
Gross income shall not include so much of any monthly
annuity payment under a qualified employer retirement plan as does
not exceed the amount obtained by dividing—
I.R.C. § 72(d)(1)(B)(i)(I) —
the investment in the contract (as
of the annuity starting date), by
I.R.C. § 72(d)(1)(B)(i)(II) —
the number of anticipated payments
determined under the table contained in clause (iii) (or, in the
case of a contract to which subsection (c)(3)(B) applies, the
number of monthly annuity payments under such contract).
I.R.C. § 72(d)(1)(B)(ii) Certain Rules Made Applicable —
Rules similar to the rules of paragraphs (2) and (3) of subsection (b) shall apply for purposes
of this paragraph.
I.R.C. § 72(d)(1)(B)(iii) Number Of Anticipated Payments —
If the annuity is payable over the life of a single
individual, the number of anticipated payments shall be determined
as follows:
If the age of the annuitant The number of on the annuity starting date is: anticipated payments is: Not more than 55.............................................360 More than 55 but not more than 60............................310 More than 60 but not more than 65............................260 More than 65 but not more than 70............................210 More than 70.................................................160.
I.R.C. § 72(d)(1)(B)(iv) Number Of Anticipated Payments Where More Than One Life —
If the annuity is payable over the lives of more than
1 individual, the number of anticipated payments shall be determined
as follows:
If the combined ages of annuitants are: The number is: Not more than 110 410 More than 110 but not more than 120 360 More than 120 but not more than 130 310 More than 130 but not more than 140 260 More than 140 210.
I.R.C. § 72(d)(1)(C) Adjustment For Refund Feature Not Applicable —
For purposes of this paragraph, investment in the contract
shall be determined under subsection (c)(1) without regard to subsection (c)(2).
I.R.C. § 72(d)(1)(D) Special Rule Where Lump Sum Paid In Connection With Commencement
Of Annuity Payments —
If, in connection with the commencement of annuity
payments under any qualified employer retirement plan, the taxpayer
receives a lump sum payment—
I.R.C. § 72(d)(1)(D)(i) —
such payment shall be taxable under
subsection (e) as
if received before the annuity starting date, and
I.R.C. § 72(d)(1)(D)(ii) —
the investment in the contract for
purposes of this paragraph shall be determined as if such payment
had been so received.
I.R.C. § 72(d)(1)(E) Exception —
This paragraph shall not apply in any case where the
primary annuitant has attained age 75 on the annuity starting date
unless there are fewer than 5 years of guaranteed payments under
the annuity.
I.R.C. § 72(d)(1)(F) Adjustment Where Annuity Payments Not On Monthly Basis —
In any case where the annuity payments are not made
on a monthly basis, appropriate adjustments in the application of
this paragraph shall be made to take into account the period on the
basis of which such payments are made.
I.R.C. § 72(d)(1)(G) Qualified Employer Retirement Plan —
For purposes of this paragraph, the term “qualified
employer retirement plan” means any plan or contract described
in paragraph (1), (2), or (3) of section 4974(c).
I.R.C. § 72(d)(2) Treatment Of Employee Contributions Under Defined Contribution
Plans —
For purposes of this section, employee contributions
(and any income allocable thereto) under a defined contribution plan
may be treated as a separate contract.
I.R.C. § 72(d)(3) Treatment Of Contributions To A Pension-Linked Emergency Savings
Account —
Editor's Note: Sec. 72(d)(3), below,
after being added Pub. L. 117-328,
Div. T, Sec. 127(e)(3), is applicable to plan years beginning after
December 31, 2023.
For purposes
of this section, contributions to a pension-linked emergency savings
account to which section 402A(e) applies (and any income allocable
thereto) may be treated as a separate contract.
I.R.C. § 72(e) Amounts Not Received As Annuities
I.R.C. § 72(e)(1) Application Of Subsection
I.R.C. § 72(e)(1)(A) In General —
This subsection shall apply to any amount which—
I.R.C. § 72(e)(1)(A)(i) —
is received under an annuity, endowment,
or life insurance contract, and
I.R.C. § 72(e)(1)(A)(ii) —
is not received as an annuity, if
no provision of this subtitle (other than this subsection) applies
with respect to such amount.
I.R.C. § 72(e)(1)(B) Dividends —
For purposes of this section, any amount received which
is in the nature of a dividend or similar distribution shall be treated
as an amount not received as an annuity.
I.R.C. § 72(e)(2) General Rule —
Any amount to which this subsection applies—
I.R.C. § 72(e)(2)(A) —
if received on or after the annuity
starting date, shall be included in gross income, or
I.R.C. § 72(e)(2)(B) —
if received before the annuity starting
date—
I.R.C. § 72(e)(2)(B)(i) —
shall be included in gross income to
the extent allocable to income on the contract, and
I.R.C. § 72(e)(2)(B)(ii) —
shall not be included in gross income
to the extent allocable to the investment in the contract.
I.R.C. § 72(e)(3) Allocation Of Amounts To Income And Investment —
For purposes of paragraph (2)(B)—
I.R.C. § 72(e)(3)(A) Allocation To Income —
Any amount to which this subsection applies shall be
treated as allocable to income on the contract to the extent that
such amount does not exceed the excess (if any) of—
I.R.C. § 72(e)(3)(A)(i) —
the cash value of the contract (determined
without regard to any surrender charge) immediately before the amount
is received, over
I.R.C. § 72(e)(3)(A)(ii) —
the investment in the contract at
such time.
I.R.C. § 72(e)(3)(B) Allocation To Investment —
Any amount to which this subsection applies shall be
treated as allocable to investment in the contract to the extent
that such amount is not allocated to income under subparagraph (A).
I.R.C. § 72(e)(4) Special Rules For Application Of Paragraph (2)(B) —
For purposes of paragraph (2)(B)—
I.R.C. § 72(e)(4)(A) Loans Treated As Distributions —
If, during any taxable year, an individual—
I.R.C. § 72(e)(4)(A)(i) —
receives (directly or indirectly) any
amount as a loan under any contract to which this subsection applies,
or
I.R.C. § 72(e)(4)(A)(ii) —
assigns or pledges (or agrees to assign
or pledge) any portion of the value of any such contract, such amount
or portion shall be treated as received under the contract as an
amount not received as an annuity. The preceding sentence shall not
apply for purposes of determining investment in the contract, except
that the investment in the contract shall be increased by any amount
included in gross income by reason of the amount treated as received
under the preceding sentence.
I.R.C. § 72(e)(4)(B) Treatment Of Policyholder Dividends —
Any amount described in paragraph (1)(B) shall not be included
in gross income under paragraph (2)(B)(i) to the extent
such amount is retained by the insurer as a premium or other consideration
paid for the contract.
I.R.C. § 72(e)(4)(C) Treatment Of Transfers Without Adequate Consideration
I.R.C. § 72(e)(4)(C)(i) In General —
If an individual who holds an annuity contract transfers
it without full and adequate consideration, such individual shall
be treated as receiving an amount equal to the excess of—
I.R.C. § 72(e)(4)(C)(i)(I) —
the cash surrender value of such contract
at the time of transfer, over
I.R.C. § 72(e)(4)(C)(i)(II) —
the investment in such contract at
such time, under the contract as an amount not received as an annuity.
I.R.C. § 72(e)(4)(C)(ii) Exception For Certain Transfers Between Spouses Or Former Spouses —
Clause (i) shall
not apply to any transfer to which section 1041(a) (relating to transfers
of property between spouses or incident to divorce) applies.
I.R.C. § 72(e)(4)(C)(iii) Adjustment To Investment In Contract Of Transferee —
If under clause (i) an amount is included
in the gross income of the transferor of an annuity contract, the
investment in the contract of the transferee in such contract shall
be increased by the amount so included.
I.R.C. § 72(e)(5) Retention Of Existing Rules In Certain Cases
I.R.C. § 72(e)(5)(A) In General —
In any case to which this paragraph applies—
I.R.C. § 72(e)(5)(A)(i) —
paragraphs (2)(B) and (4)(A) shall not apply,
and
I.R.C. § 72(e)(5)(A)(ii) —
if paragraph (2)(A) does not apply,
the amount shall be included in gross income, but only to the extent
it exceeds the investment in the contract.
I.R.C. § 72(e)(5)(B) Existing Contracts —
This paragraph shall apply to contracts entered into
before August 14, 1982. Any amount allocable to investment in the
contract after August 13, 1982, shall be treated as from a contract
entered into after such date.
I.R.C. § 72(e)(5)(C) Certain Life Insurance And Endowment Contracts —
Except as provided in paragraph (10) and except to the extent
prescribed by the Secretary by regulations, this paragraph shall
apply to any amount not received as an annuity which is received
under a life insurance or endowment contract.
I.R.C. § 72(e)(5)(D) Contracts Under Qualified Plans —
Except as provided in paragraph (8), this paragraph shall
apply to any amount received—
I.R.C. § 72(e)(5)(D)(i) —
from a trust described in section 401(a) which is exempt from
tax under section 501(a),
I.R.C. § 72(e)(5)(D)(ii) —
from a contract—
I.R.C. § 72(e)(5)(D)(ii)(I) —
purchased by a trust described in clause (i),
I.R.C. § 72(e)(5)(D)(ii)(II) —
purchased as part of a plan described
in section 403(a),
I.R.C. § 72(e)(5)(D)(ii)(III) —
described in section 403(b), or
I.R.C. § 72(e)(5)(D)(ii)(IV) —
provided for employees of a life insurance
company under a plan described in section 818(a)(3), or
I.R.C. § 72(e)(5)(D)(iii) —
from an individual retirement account
or an individual retirement annuity.
Any dividend described in section 404(k) which is received by
a participant or beneficiary shall, for purposes of this subparagraph,
be treated as paid under a separate contract to which clause (ii)(I) applies.
I.R.C. § 72(e)(5)(E) Full Refunds, Surrenders, Redemptions, And Maturities —
This paragraph shall apply to—
I.R.C. § 72(e)(5)(E)(i) —
any amount received, whether in a single
sum or otherwise, under a contract in full discharge of the obligation
under the contract which is in the nature of a refund of the consideration
paid for the contract, and
I.R.C. § 72(e)(5)(E)(ii) —
any amount received under a contract
on its complete surrender, redemption, or maturity.
In the case of any amount to which
the preceding sentence applies, the rule of paragraph (2)(A) shall not apply.
I.R.C. § 72(e)(6) Investment In The Contract —
For purposes of this subsection, the investment in
the contract as of any date is—
I.R.C. § 72(e)(6)(A) —
the aggregate amount of premiums or
other consideration paid for the contract before such date, minus
I.R.C. § 72(e)(6)(B) —
the aggregate amount received under
the contract before such date, to the extent that such amount was
excludable from gross income under this subtitle or prior income
tax laws.
I.R.C. § 72(e)(7) —
[Repealed. Pub. L. 100-647, title I, 1011A(b)(9)(A),
Nov. 10, 1988, 102 Stat. 3474]
I.R.C. § 72(e)(8) Extension Of Paragraph (2)(B) To Qualified Plans
I.R.C. § 72(e)(8)(A) In General —
Notwithstanding any other provision of this subsection,
in the case of any amount received before the annuity starting date
from a trust or contract described in paragraph (5)(D), paragraph (2)(B) shall apply to such
amounts.
I.R.C. § 72(e)(8)(B) Allocation Of Amount Received —
For purposes of paragraph (2)(B), the amount allocated
to the investment in the contract shall be the portion of the amount
described in subparagraph (A) which
bears the same ratio to such amount as the investment in the contract
bears to the account balance. The determination under the preceding
sentence shall be made as of the time of the distribution or at such
other time as the Secretary may prescribe.
I.R.C. § 72(e)(8)(C) Treatment Of Forfeitable Rights —
If an employee does not have a nonforfeitable right
to any amount under any trust or contract to which subparagraph (A)
applies, such amount shall not be treated as part of the account
balance.
I.R.C. § 72(e)(8)(D) Investment In The Contract Before 1987 —
In the case of a plan which on May 5, 1986, permitted
withdrawal of any employee contributions before separation from service,
subparagraph (A) shall
apply only to the extent that amounts received before the annuity
starting date (when increased by amounts previously received under
the contract after December 31, 1986) exceed the investment in the
contract as of December 31, 1986.
I.R.C. § 72(e)(9) Extension Of Paragraph (2)(B) To Qualified Tuition Programs
And Coverdell Education Savings Accounts —
Notwithstanding any other provision of this subsection,
paragraph (2)(B) shall
apply to amounts received under a qualified tuition program (as defined
in section 529(b))
or under a Coverdell education savings account (as defined in section 530(b)). The rule of paragraph (8)(B) shall apply for
purposes of this paragraph.
I.R.C. § 72(e)(10) Treatment Of Modified Endowment Contracts
I.R.C. § 72(e)(10)(A) In General —
Notwithstanding paragraph (5)(C), in the case of
any modified endowment contract (as defined in section 7702A)—
I.R.C. § 72(e)(10)(A)(i) —
paragraphs (2)(B) and (4)(A) shall apply, and
I.R.C. § 72(e)(10)(A)(ii) —
in applying paragraph (4)(A), “any person” shall
be substituted for “an individual”.
I.R.C. § 72(e)(10)(B) Treatment Of Certain Burial Contracts —
Notwithstanding subparagraph (A), paragraph (4)(A) shall not apply
to any assignment (or pledge) of a modified endowment contract if
such assignment (or pledge) is solely to cover the payment of expenses
referred to in section 7702(e)(2)(C)(iii) and
if the maximum death benefit under such contract does not exceed
$25,000.
I.R.C. § 72(e)(11) Special Rules For Certain Combination Contracts Providing Long-Term
Care Insurance —
Notwithstanding paragraphs (2), (5)(C), and (10), in the case of any
charge against the cash value of an annuity contract or the cash
surrender value of a life insurance contract made as payment for
coverage under a qualified long-term care insurance contract which
is part of or a rider on such annuity or life insurance contract—
I.R.C. § 72(e)(11)(A) —
the investment in the contract shall
be reduced (but not below zero) by such charge, and
I.R.C. § 72(e)(11)(B) —
such charge shall not be includible
in gross income.
I.R.C. § 72(e)(12) Anti-Abuse Rules
I.R.C. § 72(e)(12)(A) In General —
For purposes of determining the amount includible in
gross income under this subsection—
I.R.C. § 72(e)(12)(A)(i) —
all modified endowment contracts issued
by the same company to the same policyholder during any calendar
year shall be treated as 1 modified endowment contract, and
I.R.C. § 72(e)(12)(A)(ii) —
all annuity contracts issued by the
same company to the same policyholder during any calendar year shall
be treated as 1 annuity contract.
The preceding sentence shall not
apply to any contract described in paragraph (5)(D).
I.R.C. § 72(e)(12)(B) Regulatory Authority —
The Secretary may by regulations
prescribe such additional rules as may be necessary or appropriate
to prevent avoidance of the purposes of this subsection through serial
purchases of contracts or otherwise.
I.R.C. § 72(f) Special Rules For Computing Employees' Contributions —
In computing, for purposes of subsection (c)(1)(A), the aggregate
amount of premiums or other consideration paid for the contract,
and for purposes of subsection (e)(6),
the aggregate premiums or other consideration paid, amounts contributed
by the employer shall be included, but only to the extent that—
I.R.C. § 72(f)(1) —
such amounts were includible in the
gross income of the employee under this subtitle or prior income
tax laws; or
I.R.C. § 72(f)(2) —
if such amounts had been paid directly
to the employee at the time they were contributed, they would not
have been includible in the gross income of the employee under the
law applicable at the time of such contribution.
Paragraph (2) shall not apply to amounts
which were contributed by the employer after December 31, 1962, and
which would not have been includible in the gross income of the employee
by reason of the application of section 911 if
such amounts had been paid directly to the employee at the time of
contribution. The preceding sentence shall not apply to amounts which
were contributed by the employer, as determined under regulations
prescribed by the Secretary, to provide pension or annuity credits,
to the extent such credits are attributable to services performed
before January 1, 1963, and are provided pursuant to pension or annuity
plan provisions in existence on March 12, 1962, and on that date
applicable to such services, or to the extent such credits are attributable
to services performed as a foreign missionary (within the meaning
of section 403(b)(2)(D)(iii),
as in effect before the enactment of the Economic Growth and Tax
Relief Reconciliation Act of 2001).
I.R.C. § 72(g) Rules For Transferee Where Transfer Was For Value —
Where any contract (or any interest therein) is transferred
(by assignment or otherwise) for a valuable consideration, to the
extent that the contract (or interest therein) does not, in the hands
of the transferee, have a basis which is determined by reference
to the basis in the hands of the transferor, then—
I.R.C. § 72(g)(1) —
for purposes of this section, only
the actual value of such consideration, plus the amount of the premiums
and other consideration paid by the transferee after the transfer,
shall be taken into account in computing the aggregate amount of
the premiums or other consideration paid for the contract;
I.R.C. § 72(g)(2) —
for purposes of subsection (c)(1)(B), there shall
be taken into account only the aggregate amount received under the
contract by the transferee before the annuity starting date, to the
extent that such amount was excludable from gross income under this
subtitle or prior income tax laws; and
I.R.C. § 72(g)(3) —
the annuity starting date is the first
day of the first period for which the transferee received an amount
under the contract as an annuity.
For purposes of this subsection, the term “transferee”
includes a beneficiary of, or the estate of, the transferee.
I.R.C. § 72(h) Option To Receive Annuity In Lieu Of Lump Sum —
If—
I.R.C. § 72(h)(1) —
a contract provides for payment of
a lump sum in full discharge of an obligation under the contract,
subject to an option to receive an annuity in lieu of such lump sum;
I.R.C. § 72(h)(2) —
the option is exercised within 60 days
after the day on which such lump sum first became payable; and
I.R.C. § 72(h)(3) —
part or all of such lump sum would
(but for this subsection) be includible in gross income by reason
of subsection (e)(1),
then, for purposes of this subtitle,
no part of such lump sum shall be considered as includible in gross
income at the time such lump sum first became payable.
I.R.C. § 72(i) —
[Repealed. Pub.
L. 94-455, title XIX, 1951(b)(1)(A), Oct. 4, 1976,
90 Stat. 1836]
I.R.C. § 72(j) Interest —
Notwithstanding any other provision of this section,
if any amount is held under an agreement to pay interest thereon,
the interest payments shall be included in gross income.
I.R.C. § 72(k) —
[Repealed. Pub.
L. 98-369, div. A, title IV, 421(b)(1), July 18,
1984, 98 Stat. 794]
I.R.C. § 72(l) Face-Amount Certificates —
For purposes of this section, the term “endowment contract"
includes a face-amount certificate, as defined in section 2(a)(15)
of the Investment Company Act of 1940 (15 U.S.C., sec. 80a-2), issued
after December 31, 1954.
I.R.C. § 72(m) Special Rules Applicable To Employee Annuities And Distributions
Under Employee Plans
I.R.C. § 72(m)(1) —
[Repealed. Pub.
L. 93-406, title II, 2001(h)(2), Sept. 2, 1974, 88
Stat. 957]
I.R.C. § 72(m)(2) Computation Of Consideration Paid By The Employee —
In computing—
I.R.C. § 72(m)(2)(A) —
the aggregate amount of premiums or
other consideration paid for the contract for purposes of subsection (c)(1)(A) (relating to
the investment in the contract), and
I.R.C. § 72(m)(2)(B) —
the aggregate premiums or other consideration
paid for purposes of subsection (e)(6) (relating
to certain amounts not received as an annuity),
any amount allowed as a deduction
with respect to the contract under section 404 which was paid while the employee
was an employee within the meaning of section 401(c)(1) shall be treated
as consideration contributed by the employer, and there shall not
be taken into account any portion of the premiums or other consideration
for the contract paid while the employee was an owner-employee which
is properly allocable (as determined under regulations prescribed
by the Secretary) to the cost of life, accident, health, or other
insurance.
I.R.C. § 72(m)(3) Life Insurance Contracts
I.R.C. § 72(m)(3)(A) —
This paragraph shall apply to any life
insurance contract—
I.R.C. § 72(m)(3)(A)(i) —
purchased as a part of a plan described
in section 403(a),
or
I.R.C. § 72(m)(3)(A)(ii) —
purchased by a trust described in
section 401(a) which
is exempt from tax under section 501(a) if
the proceeds of such contract are payable directly or indirectly
to a participant in such trust or to a beneficiary of such participant.
I.R.C. § 72(m)(3)(B) —
Any contribution to a plan described
in subparagraph (A)(i) or
a trust described in subparagraph (A)(ii) which is allowed
as a deduction under section 404,
and any income of a trust described in subparagraph (A)(ii), which is
determined in accordance with regulations prescribed by the Secretary
to have been applied to purchase the life insurance protection under
a contract described in subparagraph (A), is includible in the
gross income of the participant for the taxable year when so applied.
I.R.C. § 72(m)(3)(C) —
In the case of the death of an individual
insured under a contract described in subparagraph (A), an amount equal to
the cash surrender value of the contract immediately before the death
of the insured shall be treated as a payment under such plan or a
distribution by such trust, and the excess of the amount payable
by reason of the death of the insured over such cash surrender value
shall not be includible in gross income under this section and shall
be treated as provided in section 101.
I.R.C. § 72(m)(4) —
[Repealed. Pub.
L. 97-248, title II, 236(b)(1), Sept. 3, 1982, 96
Stat. 510]
I.R.C. § 72(m)(5) Penalties Applicable To Certain Amounts Received By 5-Percent
Owners
I.R.C. § 72(m)(5)(A) —
This paragraph applies to amounts which
are received from a qualified trust described in section 401(a) or under a plan described
in section 403(a) at
any time by an individual who is, or has been, a 5-percent owner,
or by a successor of such an individual, but only to the extent such
amounts are determined, under regulations prescribed by the Secretary,
to exceed the benefits provided for such individual under the plan
formula.
I.R.C. § 72(m)(5)(B) —
If a person receives an amount to which
this paragraph applies, his tax under this chapter for the taxable
year in which such amount is received shall be increased by an amount
equal to 10 percent of the portion of the amount so received which
is includible in his gross income for such taxable year.
I.R.C. § 72(m)(5)(C) —
For purposes of this paragraph, the
term “5-percent owner” means any individual who, at any time during
the 5 plan years preceding the plan year ending in the taxable year
in which the amount is received, is a 5-percent owner (as defined
in section 416(i)(1)(B)).
I.R.C. § 72(m)(6) Owner-Employee Defined —
For purposes of this subsection, the term “owner-employee"
has the meaning assigned to it by section 401(c)(3) and includes an
individual for whose benefit an individual retirement account or
annuity described in section 408(a) or (b) is maintained. For purposes
of the preceding sentence, the term “owner-employee” shall include
an employee within the meaning of section 401(c)(1).
I.R.C. § 72(m)(7) Meaning Of Disabled —
For purposes of this section, an individual shall be
considered to be disabled if he is unable to engage in any substantial
gainful activity by reason of any medically determinable physical
or mental impairment which can be expected to result in death or
to be of long-continued and indefinite duration. An individual shall
not be considered to be disabled unless he furnishes proof of the
existence thereof in such form and manner as the Secretary may require.
I.R.C. § 72(m)(8) —
[Repealed. Pub.
L. 97-248, title II, 236(b)(1), Sept. 3, 1982, 96
Stat. 510]
I.R.C. § 72(m)(9) —
[Repealed. Pub.
L. 98-369, div. A, title VII, 713(d)(1), July 18,
1984, 98 Stat. 957]
I.R.C. § 72(m)(10) Determination Of Investment In The Contract In The Case Of Qualified
Domestic Relations Orders —
Under regulations prescribed by the Secretary, in the
case of a distribution or payment made to an alternate payee who
is the spouse or former spouse of the participant pursuant to a qualified
domestic relations order (as defined in section 414(p)), the investment in the
contract as of the date prescribed in such regulations shall be allocated
on a pro rata basis between the present value of such distribution
or payment and the present value of all other benefits payable with
respect to the participant to which such order relates.
I.R.C. § 72(n) Annuities Under Retired Serviceman's Family Protection Plan
Or Survivor Benefit Plan —
Subsection (b) shall
not apply in the case of amounts received after December 31, 1965,
as an annuity under chapter 73 of title 10 of the United States Code,
but all such amounts shall be excluded from gross income until there
has been so excluded (under section 122(b)(1) or this section,
including amounts excluded before January 1, 1966) an amount equal
to the consideration for the contract (as defined by section 122(b)(2)), plus any amount
treated pursuant to section 101(b)(2)(D) (as
in effect on the day before the date of the enactment of the Small
Business Job Protection Act of 1996) as additional consideration
paid by the employee. Thereafter all amounts so received shall be
included in gross income.
I.R.C. § 72(o) Special Rules For Distributions From Qualified Plans To Which
Employee Made Deductible Contributions
I.R.C. § 72(o)(1) Treatment Of Contributions —
For purposes of this section and sections 402 and 403, notwithstanding section 414(h), any deductible employee
contribution made to a qualified employer plan or government plan
shall be treated as an amount contributed by the employer which is
not includible in the gross income of the employee.
I.R.C. § 72(o)(2) —
[Repealed. Pub. L. 100-647, title I, 1011A(c)(8),
Nov. 10, 1988, 102 Stat. 3476]
I.R.C. § 72(o)(3) Amounts Constructively Received
I.R.C. § 72(o)(3)(A) In General —
For purposes of this subsection, rules similar to the
rules provided by subsection (p) (other
than the exception contained in paragraph (2) thereof) shall apply.
I.R.C. § 72(o)(3)(B) Purchase Of Life Insurance —
To the extent any amount of accumulated deductible
employee contributions of an employee are applied to the purchase
of life insurance contracts, such amount shall be treated as distributed
to the employee in the year so applied.
I.R.C. § 72(o)(4) Special Rule For Treatment Of Rollover Amounts —
For purposes of sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3), and 457(e)(16), the Secretary
shall prescribe regulations providing for such allocations of amounts
attributable to accumulated deductible employee contributions, and
for such other rules, as may be necessary to insure that such accumulated
deductible employee contributions do not become eligible for additional
tax benefits (or freed from limitations) through the use of rollovers.
I.R.C. § 72(o)(5) Definitions And Special Rules —
For purposes of this subsection—
I.R.C. § 72(o)(5)(A) Deductible Employee Contributions —
The term “deductible employee contributions” means
any qualified voluntary employee contribution (as defined in section 219(e)(2)) made after December
31, 1981, in a taxable year beginning after such date and made for
a taxable year beginning before January 1, 1987, and allowable as
a deduction under section 219(a) for
such taxable year.
I.R.C. § 72(o)(5)(B) Accumulated Deductible Employee Contributions —
The term “accumulated deductible employee contributions"
means the deductible employee contributions—
I.R.C. § 72(o)(5)(B)(i) —
increased by the amount of income and
gain allocable to such contributions, and
I.R.C. § 72(o)(5)(B)(ii) —
reduced by the sum of the amount of
loss and expense allocable to such contributions and the amounts
distributed with respect to the employee which are attributable to
such contributions (or income or gain allocable to such contributions).
I.R.C. § 72(o)(5)(C) Qualified Employer Plan —
The term “qualified employer plan” has the meaning
given to such term by subsection (p)(3)(A)(i).
I.R.C. § 72(o)(5)(D) Government Plan —
The term “government plan” has the meaning given such
term by subsection (p)(3)(B).
I.R.C. § 72(o)(6) Ordering Rules —
Unless the plan specifies otherwise, any distribution
from such plan shall not be treated as being made from the accumulated
deductible employee contributions, until all other amounts to the
credit of the employee have been distributed.
I.R.C. § 72(p) Loans Treated As Distributions —
For purposes of this section—
I.R.C. § 72(p)(1) Treatment As Distributions
I.R.C. § 72(p)(1)(A) Loans —
If during any taxable year a participant or beneficiary
receives (directly or indirectly) any amount as a loan from a qualified
employer plan, such amount shall be treated as having been received
by such individual as a distribution under such plan.
I.R.C. § 72(p)(1)(B) Assignments Or Pledges —
If during any taxable year a participant or beneficiary
assigns (or agrees to assign) or pledges (or agrees to pledge) any
portion of his interest in a qualified employer plan, such portion
shall be treated as having been received by such individual as a
loan from such plan.
I.R.C. § 72(p)(2) Exception For Certain Loans
I.R.C. § 72(p)(2)(A) General Rule —
Paragraph (1) shall
not apply to any loan to the extent that such loan (when added to
the outstanding balance of all other loans from such plan whether
made on, before, or after August 13, 1982), does not exceed the lesser
of—
I.R.C. § 72(p)(2)(A)(i) —
$50,000, reduced by the excess (if
any) of—
I.R.C. § 72(p)(2)(A)(i)(I) —
the highest outstanding balance of
loans from the plan during the 1-year period ending on the day before
the date on which such loan was made, over
I.R.C. § 72(p)(2)(A)(i)(II) —
the outstanding balance of loans from
the plan on the date on which such loan was made, or
I.R.C. § 72(p)(2)(A)(ii) —
the greater of
I.R.C. § 72(p)(2)(A)(ii)(I) —
one-half of the present value of the
nonforfeitable accrued benefit of the employee under the plan, or
I.R.C. § 72(p)(2)(A)(ii)(II) —
$10,000.
For purposes of clause (ii), the present value
of the nonforfeitable accrued benefit shall be determined without
regard to any accumulated deductible employee contributions (as defined
in subsection (o)(5)(B)).
I.R.C. § 72(p)(2)(B) Requirement That Loan Be Repayable Within 5 Years
I.R.C. § 72(p)(2)(B)(i) In General —
Subparagraph (A) shall
not apply to any loan unless such loan, by its terms, is required
to be repaid within 5 years.
I.R.C. § 72(p)(2)(B)(ii) Exception For Home Loans —
Clause (i) shall
not apply to any loan used to acquire any dwelling unit which within
a reasonable time is to be used (determined at the time the loan is
made) as the principal residence of the participant.
I.R.C. § 72(p)(2)(C) Requirement Of Level Amortization —
Except as provided in regulations, this paragraph shall
not apply to any loan unless substantially level amortization of
such loan (with payments not less frequently than quarterly) is required
over the term of the loan.
I.R.C. § 72(p)(2)(D) Prohibition Of Loans Through Credit Cards And Other Similar
Arrangements —
Subparagraph (A) shall not apply to any loan which is
made through the use of any credit card or any other similar arrangement.
I.R.C. § 72(p)(2)(E) Related Employers And Related Plans —
For purposes of this paragraph—
I.R.C. § 72(p)(2)(E)(i) —
the rules of subsections (b), (c), and (m) of section 414 shall apply, and
I.R.C. § 72(p)(2)(E)(ii) —
all plans of an employer (determined
after the application of such subsections) shall be treated as 1
plan.
I.R.C. § 72(p)(3) Denial Of Interest Deductions In Certain Cases
I.R.C. § 72(p)(3)(A) In General —
No deduction otherwise allowable under this chapter
shall be allowed under this chapter for any interest paid or accrued
on any loan to which paragraph (1) does
not apply by reason of paragraph (2) during
the period described in subparagraph (B).
I.R.C. § 72(p)(3)(B) Period To Which Subparagraph (A) Applies —
For purposes of subparagraph (A), the period described
in this subparagraph is the period—
I.R.C. § 72(p)(3)(B)(i) —
on or after the 1st day on which the
individual to whom the loan is made is a key employee (as defined
in section 416(i)),
or
I.R.C. § 72(p)(3)(B)(ii) —
such loan is secured by amounts attributable
to elective deferrals described in subparagraph (A) or (C) of section 402(g)(3).
I.R.C. § 72(p)(4) Qualified Employer Plan, Etc. —
For purposes of this subsection—
I.R.C. § 72(p)(4)(A) Qualified Employer Plan
I.R.C. § 72(p)(4)(A)(i) In General —
The term “qualified employer plan” means—
I.R.C. § 72(p)(4)(A)(i)(I) —
a plan described in section 401(a) which includes a trust
exempt from tax under section 501(a),
I.R.C. § 72(p)(4)(A)(i)(II) —
an annuity plan described in section 403(a), and
I.R.C. § 72(p)(4)(A)(i)(III) —
a plan under which amounts are contributed
by an individual's employer for an annuity contract described in
section 403(b).
I.R.C. § 72(p)(4)(A)(ii) Special Rule —
The term “qualified employer plan” shall include any
plan which was (or was determined to be) a qualified employer plan
or a government plan.
I.R.C. § 72(p)(4)(B) Government Plan —
The term “government plan” means any plan, whether
or not qualified, established and maintained for its employees by
the United States, by a State or political subdivision thereof, or
by an agency or instrumentality of any of the foregoing.
I.R.C. § 72(p)(5) Special Rules For Loans, Etc., From Certain Contracts —
For purposes of this subsection, any amount received
as a loan under a contract purchased under a qualified employer plan
(and any assignment or pledge with respect to such a contract) shall
be treated as a loan under such employer plan.
I.R.C. § 72(p)(6) Increase In Limit On Loans Not Treated As Distributions —
Editor's Note: Sec. 72(p)(6), below,
after being added Pub. L. 117-328,
Div. T, Sec. 331(c)(1), is applicable to plan loans made with respect
to disasters the incident period (as defined in section 72(t)(11)(F)(ii)
of the Internal Revenue Code of 1986, as added by this subsection)
for which begins on or after the date which is 30 days after the date
of the enactment of the Taxpayer Certainty and Disaster Tax Relief
Act of 2020 [Enacted: Dec. 27, 2020].
I.R.C. § 72(p)(6)(A) In General —
In the case of any loan from a qualified employer plan
to a qualified individual made during the applicable period—
I.R.C. § 72(p)(6)(A)(i) —
clause (i) of paragraph (2)(A) shall
be applied by substituting ‘$100,000’ for ‘$50,000’,
and
I.R.C. § 72(p)(6)(A)(ii) —
clause (ii) of such paragraph shall
be applied by substituting “the present value of the nonforfeitable
accrued benefit of the employee under the plan” for “one-half
of the present value of the nonforfeitable accrued benefit of the
employee under the plan”.
I.R.C. § 72(p)(6)(B) Delay Of Repayment —
In the case of a qualified individual with respect to
any qualified disaster with an outstanding loan from a qualified employer
plan on or after the applicable date with respect to the qualified
disaster—
I.R.C. § 72(p)(6)(B)(i) —
if the due date pursuant to subparagraph
(B) or (C) of paragraph (2) for any repayment with respect to such
loan occurs during the period beginning on the first day of the incident
period of such qualified disaster and ending on the date which is
180 days after the last day of such incident period, such due date
may be delayed for 1 year,
I.R.C. § 72(p)(6)(B)(ii) —
any subsequent repayments with respect
to any such loan may be appropriately adjusted to reflect the delay
in the due date under clause (i) and any interest accruing during
such delay, and
I.R.C. § 72(p)(6)(B)(iii) —
in determining the 5-year period and
the term of a loan under subparagraph (B) or (C) of paragraph (2),
the period described in clause (i) may be disregarded.
I.R.C. § 72(p)(6)(C) Definitions —
For purposes of this paragraph—
I.R.C. § 72(p)(6)(C)(i) Qualified Individual —
The term “qualified individual” means any
individual—
I.R.C. § 72(p)(6)(C)(i)(I) —
whose principal place of abode at any
time during the incident period of any qualified disaster is located
in the qualified disaster area with respect to such qualified disaster,
and
I.R.C. § 72(p)(6)(C)(i)(II) —
who has sustained an economic loss by
reason of such qualified disaster.
I.R.C. § 72(p)(6)(C)(ii) Applicable Period —
The applicable period with respect to any disaster is
the period—
I.R.C. § 72(p)(6)(C)(ii)(I) —
beginning on the applicable date with
respect to such disaster, and
I.R.C. § 72(p)(6)(C)(ii)(II) —
ending on the date that is 180 days
after such applicable date.
I.R.C. § 72(p)(6)(C)(iii) Other Terms —
purposes of this paragraph—
I.R.C. § 72(p)(6)(C)(iii)(I) —
the terms “applicable date”, “qualified
disaster”, “qualified disaster area”, and “incident
period” have the meaning given such terms under subsection (t)(11),
and
I.R.C. § 72(p)(6)(C)(iii)(II) —
the term “applicable period”
has the meaning given such term under subsection (t)(8).
I.R.C. § 72(q) 10-Percent Penalty For Premature Distributions From Annuity
Contracts
I.R.C. § 72(q)(1) Imposition Of Penalty —
If any taxpayer receives any amount under an annuity
contract, the taxpayer's tax under this chapter for the taxable year
in which such amount is received shall be increased by an amount
equal to 10 percent of the portion of such amount which is includible
in gross income.
I.R.C. § 72(q)(2) Subsection Not To Apply To Certain Distributions —
Paragraph 1 shall not apply to any distribution—
I.R.C. § 72(q)(2)(A) —
made on or after the date on which
the taxpayer attains age 591/2,
I.R.C. § 72(q)(2)(B) —
made on or after the death of the holder
(or, where the holder is not an individual, the death of the primary
annuitant (as defined in subsection (s)(6)(B))),
I.R.C. § 72(q)(2)(C) —
attributable to the taxpayer's becoming
disabled within the meaning of subsection (m)(7),
I.R.C. § 72(q)(2)(D) —
which is a part of a series of substantially
equal periodic payments (not less frequently than annually) made
for the life (or life expectancy) of the taxpayer or the joint lives
(or joint life expectancies) of such taxpayer and his designated
beneficiary,
I.R.C. § 72(q)(2)(E) —
from a plan, contract, account, trust,
or annuity described in subsection (e)(5)(D),
I.R.C. § 72(q)(2)(F) —
allocable to investment in the contract
before August 14, 1982, or
I.R.C. § 72(q)(2)(G) —
under a qualified funding asset (within
the meaning of section 130(d),
but without regard to whether there is a qualified assignment),
I.R.C. § 72(q)(2)(H) —
to which subsection (t) applies (without regard to
paragraph (2) thereof),
I.R.C. § 72(q)(2)(I) —
under an immediate annuity contract
(within the meaning of section 72(u)(4)),
or
I.R.C. § 72(q)(2)(J) —
which is purchased by an employer upon
the termination of a plan described in section 401(a) or 403(a) and which is held by
the employer until such time as the employee separates from service.
For purposes
of subparagraph (D), periodic payments shall not fail to be treated
as substantially equal merely because they are amounts received as
an annuity, and such periodic payments shall be deemed to be substantially
equal if they are payable over a period described in subparagraph
(D) and would satisfy the requirements applicable to annuity payments
under section 401(a)(9) if such requirements applied.
I.R.C. § 72(q)(3) Change In Substantially Equal Payments —
Editor's Note: Sec. 72(t)(3), below,
before amendment by Pub. L. 117-328,
Div. T, Sec. 323(b), is applicable to transfers, and rollovers, and
exchanges occurring before January 1, 2024.
If—
I.R.C. § 72(q)(3)(A) —
paragraph (1) does not apply to a distribution
by reason of paragraph (2)(D),
and
I.R.C. § 72(q)(3)(B) —
the series of payments under such paragraph
are subsequently modified (other than by reason of death or disability)—
I.R.C. § 72(q)(3)(B)(i) —
before the close of the 5-year period
beginning on the date of the first payment and after the taxpayer
attains age 591/2, or
I.R.C. § 72(q)(3)(B)(ii) —
before the taxpayer attains age 591/2,
the taxpayer's tax for the 1st taxable year in which
such modification occurs shall be increased by an amount, determined
under regulations, equal to the tax which (but for paragraph (2)(D)) would have been
imposed, plus interest for the deferral period (within the meaning
of subsection (t)(4)(B)).
I.R.C. § 72(q)(3) Change In Substantially Equal Payments —
Editor's Note: Sec. 72(t)(3), below,
after amendment by Pub. L. 117-328,
Div. T, Sec. 323(b), is applicable to transfers, and rollovers, and
exchanges occurring December 31, 2023.
I.R.C. § 72(q)(3)(A) In General —
If—
I.R.C. § 72(q)(3)(A)(i) —
paragraph (1) does not apply to a distribution
by reason of paragraph (2)(D),
and
I.R.C. § 72(q)(3)(A)(ii) —
the series of payments under such
paragraph are subsequently modified (other than by reason of death
or disability)—
I.R.C. § 72(q)(3)(A)(ii)(I) —
before the close of the 5-year period
beginning on the date of the first payment and after the taxpayer
attains age 591/2, or
I.R.C. § 72(q)(3)(A)(ii)(II) —
before the taxpayer attains age 591/2,
the taxpayer's tax for the 1st taxable
year in which such modification occurs shall be increased by an amount,
determined under regulations, equal to the tax which (but for paragraph
(2)(D))
would have been imposed, plus interest for the deferral period (within
the meaning of subsection (t)(4)(B)).
I.R.C. § 72(q)(3)(B) Exchanges To Subsequent Contracts —
I.R.C. § 72(q)(3)(B)(i) —
payments described in paragraph (2)(D)
are being made from an annuity contract,
I.R.C. § 72(q)(3)(B)(ii) —
an exchange of all or a portion of such
contract for another contract is made under section 1035, and
I.R.C. § 72(q)(3)(B)(iii) —
the aggregate distributions from the
contracts involved in the exchange continue to satisfy the requirements
of paragraph (2)(D) as if the exchange had not taken place,
such exchange
shall not be treated as a modification under subparagraph (A)(ii),
and compliance with paragraph (2)(D) shall be determined on the basis
of the combined distributions described in clause (iii).
I.R.C. § 72(r) Certain Railroad Retirement Benefits Treated As Received Under
Employer Plans
I.R.C. § 72(r)(1) In General —
Notwithstanding any other provision of law, any benefit
provided under the Railroad Retirement Act of 1974 (other than a
tier 1 railroad retirement benefit) shall be treated for purposes
of this title as a benefit provided under an employer plan which
meets the requirements of section 401(a).
I.R.C. § 72(r)(2) Tier 2 Taxes Treated As Contributions
I.R.C. § 72(r)(2)(A) In General —
For purposes of paragraph (1)—
I.R.C. § 72(r)(2)(A)(i) —
the tier 2 portion of the tax imposed
by section 3201 (relating
to tax on employees) shall be treated as an employee contribution,
I.R.C. § 72(r)(2)(A)(ii) —
the tier 2 portion of the tax imposed
by section 3211 (relating
to tax on employee representatives) shall be treated as an employee
contribution, and
I.R.C. § 72(r)(2)(A)(iii) —
the tier 2 portion of the tax imposed
by section 3221 (relating
to tax on employers) shall be treated as an employer contribution.
I.R.C. § 72(r)(2)(B) Tier 2 Portion —
For purposes of subparagraph (A)—
I.R.C. § 72(r)(2)(B)(i) After 1984 —
With respect to compensation paid after 1984, the tier
2 portion shall be the taxes imposed by sections 3201(b), 3211(b), and 3221(b).
I.R.C. § 72(r)(2)(B)(ii) After September 30, 1981, And Before 1985 —
With respect to compensation paid before 1985 for services
rendered after September 30, 1981, the tier 2 portion shall be—
I.R.C. § 72(r)(2)(B)(ii)(I) —
so much of the tax imposed by section 3201 as is determined at the 2
percent rate, and
I.R.C. § 72(r)(2)(B)(ii)(II) —
so much of the taxes imposed by sections 3211 and 3221 as is determined at the
11.75 percent rate.
With respect to compensation paid for services rendered
after December 31, 1983, and before 1985, subclause (I) shall be applied
by substituting “2.75 percent” for “2 percent”, and subclause (II) shall be
applied by substituting “12.75 percent” for “11.75 percent”.
I.R.C. § 72(r)(2)(B)(iii) Before October 1, 1981 —
With respect to compensation paid for services rendered
during any period before October 1, 1981, the tier 2 portion shall
be the excess (if any) of—
I.R.C. § 72(r)(2)(B)(iii)(I) —
the tax imposed for such period by
section 3201, 3211, or 3221, as the case may be (other
than any tax imposed with respect to man-hours), over
I.R.C. § 72(r)(2)(B)(iii)(II) —
the tax which would have been imposed
by such section for such period had the rates of the comparable taxes
imposed by chapter 21 for such period applied under such section.
I.R.C. § 72(r)(2)(C) Contributions Not Allocable To Supplemental Annuity Or Windfall
Benefits —
For purposes of paragraph (1), no amount treated as
an employee contribution under this paragraph shall be allocated
to—
I.R.C. § 72(r)(2)(C)(i) —
any supplemental annuity paid under
section 2(b) of the Railroad Retirement Act of 1974, or
I.R.C. § 72(r)(2)(C)(ii) —
any benefit paid under section 3(h),
4(e), or 4(h) of such Act.
I.R.C. § 72(r)(3) Tier 1 Railroad Retirement Benefit —
For purposes of paragraph (1), the term “tier 1 railroad
retirement benefit” has the meaning given such term by section 86(d)(4).
I.R.C. § 72(s) Required Distributions Where Holder Dies Before Entire Interest
Is Distributed
I.R.C. § 72(s)(1) In General —
A contract shall not be treated as an annuity contract
for purposes of this title unless it provides that—
I.R.C. § 72(s)(1)(A) —
if any holder of such contract dies
on or after the annuity starting date and before the entire interest
in such contract has been distributed, the remaining portion of such
interest will be distributed at least as rapidly as under the method
of distributions being used as of the date of his death, and
I.R.C. § 72(s)(1)(B) —
if any holder of such contract dies
before the annuity starting date, the entire interest in such contract
will be distributed within 5 years after the death of such holder.
I.R.C. § 72(s)(2) Exception For Certain Amounts Payable Over Life Of Beneficiary —
If—
I.R.C. § 72(s)(2)(A) —
any portion of the holder's interest
is payable to (or for the benefit of) a designated beneficiary,
I.R.C. § 72(s)(2)(B) —
such portion will be distributed (in
accordance with regulations) over the life of such designated beneficiary
(or over a period not extending beyond the life expectancy of such
beneficiary), and
I.R.C. § 72(s)(2)(C) —
such distributions begin not later
than 1 year after the date of the holder's death or such later date
as the Secretary may by regulations prescribe, then for purposes
of paragraph (1),
the portion referred to in subparagraph (A) shall be treated as distributed
on the day on which such distributions begin.
I.R.C. § 72(s)(3) Special Rule Where Surviving Spouse Beneficiary —
If the designated beneficiary referred to in paragraph (2)(A) is the surviving
spouse of the holder of the contract, paragraphs (1) and (2) shall be applied by treating
such spouse as the holder of such contract.
I.R.C. § 72(s)(4) Designated Beneficiary —
For purposes of this subsection, the term “designated
beneficiary” means any individual designated a beneficiary by the
holder of the contract.
I.R.C. § 72(s)(5) Exception For Certain Annuity Contracts —
This subsection shall not apply to any annuity contract—
I.R.C. § 72(s)(5)(A) —
which is provided—
I.R.C. § 72(s)(5)(A)(i) —
under a plan described in section 401(a) which includes a trust
exempt from tax under section 501,
or
I.R.C. § 72(s)(5)(A)(ii) —
under a plan described in section 403(a),
I.R.C. § 72(s)(5)(B) —
which is described in section 403(b),
I.R.C. § 72(s)(5)(C) —
which is an individual retirement annuity
or provided under an individual retirement account or annuity, or
I.R.C. § 72(s)(5)(D) —
which is a qualified funding asset
(as defined in section 130(d),
but without regard to whether there is a qualified assignment).
I.R.C. § 72(s)(6) Special Rule Where Holder Is Corporation Or Other Non-Individual
I.R.C. § 72(s)(6)(A) In General —
For purposes of this subsection, if the holder of the
contract is not an individual, the primary annuitant shall be treated
as the holder of the contract.
I.R.C. § 72(s)(6)(B) Primary Annuitant —
For purposes of subparagraph (A), the term “primary
annuitant” means the individual, the events in the life of whom are
of primary importance in affecting the timing or amount of the payout
under the contract.
I.R.C. § 72(s)(7) Treatment Of Changes In Primary Annuitant Where Holder Of Contract
Is Not An Individual —
For purposes of this subsection, in the case of a holder
of an annuity contract which is not an individual, if there is a
change in a primary annuitant (as defined in paragraph (6)(B)), such change shall
be treated as the death of the holder.
I.R.C. § 72(t) 10-Percent Additional Tax On Early Distributions From Qualified
Retirement Plans
I.R.C. § 72(t)(1) Imposition Of Additional Tax —
If any taxpayer receives any amount from a qualified
retirement plan (as defined in section 4974(c)), the taxpayer's tax
under this chapter for the taxable year in which such amount is received
shall be increased by an amount equal to 10 percent of the portion
of such amount which is includible in gross income.
I.R.C. § 72(t)(2) Subsection Not To Apply To Certain Distributions —
Except as provided in paragraphs (3) and (4), paragraph (1) shall not apply to any
of the following distributions:
I.R.C. § 72(t)(2)(A) In General —
Distributions which are—
I.R.C. § 72(t)(2)(A)(i) —
made on or after the date on which
the employee attains age 591/2,
I.R.C. § 72(t)(2)(A)(ii) —
made to a beneficiary (or to the estate
of the employee) on or after the death of the employee,
I.R.C. § 72(t)(2)(A)(iii) —
attributable to the employee's being
disabled within the meaning of subsection (m)(7),
I.R.C. § 72(t)(2)(A)(iv) —
part of a series of substantially
equal periodic payments (not less frequently than annually) made
for the life (or life expectancy) of the employee or the joint lives
(or joint life expectancies) of such employee and his designated
beneficiary,
I.R.C. § 72(t)(2)(A)(v) —
made to an employee after separation
from service after attainment of age 55,
I.R.C. § 72(t)(2)(A)(vi) —
dividends paid with respect to stock
of a corporation which are described in section 404(k),
I.R.C. § 72(t)(2)(A)(vii) —
made on account of a levy under section 6331 on the qualified retirement
plan,
I.R.C. § 72(t)(2)(A)(viii) —
payments under a phased retirement
annuity under section 8366a(a)(5) or 8412a(a)(5) of title 5, United
States Code, or a composite retirement annuity under section 8366a(a)(1)
or 8412a(a)(1) of such title, or
I.R.C. § 72(t)(2)(A)(ix) —
attributable to withdrawal of net income
attributable to a contribution which is distributed pursuant to section 408(d)(4).
For purposes
of clause (iv), periodic payments shall not fail to be treated as
substantially equal merely because they are amounts received as an
annuity, and such periodic payments shall be deemed to be substantially
equal if they are payable over a period described in clause (iv) and
satisfy the requirements applicable to annuity payments under section
401(a)(9).
I.R.C. § 72(t)(2)(B) Medical Expenses —
Distributions made to the employee (other than distributions
described in subparagraph (A), (C), or (D)) to the extent such
distributions do not exceed the amount allowable as a deduction under
section 213 to
the employee for amounts paid during the taxable year for medical
care (determined without regard to whether the employee itemizes
deductions for such taxable year).
I.R.C. § 72(t)(2)(C) Payments To Alternate Payees Pursuant To Qualified Domestic
Relations Orders —
Any distribution to an alternate payee pursuant to
a qualified domestic relations order (within the meaning of section 414(p)(1)).
I.R.C. § 72(t)(2)(D) Distributions To Unemployed Individuals For Health Insurance
Premiums
I.R.C. § 72(t)(2)(D)(i) In General —
Distributions from an individual retirement plan to
an individual after separation from employment—
I.R.C. § 72(t)(2)(D)(i)(I) —
if such individual has received unemployment
compensation for 12 consecutive weeks under any Federal or State
unemployment compensation law by reason of such separation,
I.R.C. § 72(t)(2)(D)(i)(II) —
if such distributions are made during
any taxable year during which such unemployment compensation is paid
or the succeeding taxable year, and
I.R.C. § 72(t)(2)(D)(i)(III) —
to the extent such distributions
do not exceed the amount paid during the taxable year for insurance
described in section 213(d)(1)(D) with
respect to the individual and the individual's spouse and dependents
(as defined in section 152,
determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof).
I.R.C. § 72(t)(2)(D)(ii) Distributions After Reemployment —
Clause (i) shall
not apply to any distribution made after the individual has been
employed for at least 60 days after the separation from employment
to which clause (i) applies.
I.R.C. § 72(t)(2)(D)(iii) Self-Employed Individuals —
To the extent provided in regulations, a self-employed
individual shall be treated as meeting the requirements of clause (i)(I) if, under
Federal or State law, the individual would have received unemployment
compensation but for the fact the individual was self-employed.
I.R.C. § 72(t)(2)(E) Distributions From Individual Retirement Plans For Higher Education
Expenses —
Distributions to an individual from an individual retirement
plan to the extent such distributions do not exceed the qualified
higher education expenses (as defined in paragraph (7)) of the taxpayer for the
taxable year. Distributions shall not be taken into account under
the preceding sentence if such distributions are described in subparagraph (A), (C), or (D) or to the extent paragraph (1) does not apply to such
distributions by reason of subparagraph (B).
I.R.C. § 72(t)(2)(F) Distributions From Certain Plans For First Home Purchases —
Distributions to an individual from an individual retirement
plan which are qualified first-time homebuyer distributions (as defined
in paragraph (8)).
Distributions shall not be taken into account under the preceding
sentence if such distributions are described in subparagraph (A), (C), (D), or (E) or to the extent paragraph (1) does not apply to such
distributions by reason of subparagraph (B).
I.R.C. § 72(t)(2)(G) Distributions From Retirement Plans To Individuals Called To
Active Duty
I.R.C. § 72(t)(2)(G)(ii) Amount Distributed May Be Repaid —
Any individual who receives a qualified reservist
distribution may, at any time during the 2-year period beginning
on the day after the end of the active duty period, make one or more
contributions to an individual retirement plan of such individual
in an aggregate amount not to exceed the amount of such distribution.
The dollar limitations otherwise applicable to contributions to individual
retirement plans shall not apply to any contribution made pursuant
to the preceding sentence. No deduction shall be allowed for any
contribution pursuant to this clause.
I.R.C. § 72(t)(2)(G)(iii) Qualified Reservist Distribution —
For purposes of this subparagraph, the term “qualified
reservist distribution” means any distribution to an individual if—
I.R.C. § 72(t)(2)(G)(iii)(I) —
such distribution is 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),
I.R.C. § 72(t)(2)(G)(iii)(II) —
such individual was (by reason of
being a member of a reserve component (as defined in section 101 of
title 37, United States Code)) ordered or called to active duty for
a period in excess of 179 days or for an indefinite period, and
I.R.C. § 72(t)(2)(G)(iii)(III) —
such distribution is made during
the period beginning on the date of such order or call and ending
at the close of the active duty period.
I.R.C. § 72(t)(2)(G)(iv) Application Of Subparagraph —
This subparagraph applies to individuals ordered or
called to active duty after September 11, 2001. In no event shall
the 2-year period referred to in clause (ii) end before the
date which is 2 years after the date of the enactment of this subparagraph.
I.R.C. § 72(t)(2)(H) Distributions From Retirement Plans In Case Of Birth Of Child
Or Adoption
I.R.C. § 72(t)(2)(H)(ii) Limitation —
The aggregate amount which may be treated as qualified
birth or adoption distributions by any individual with respect to
any birth or adoption shall not exceed $5,000.
I.R.C. § 72(t)(2)(H)(iii) Qualified Birth Or Adoption Distribution —
For purposes of this subparagraph—
I.R.C. § 72(t)(2)(H)(iii)(I) In General —
The term “qualified birth or adoption distribution”
means any distribution from an applicable eligible retirement plan
to an individual if made during the 1-year period beginning on the
date on which a child of the individual is born or on which the legal
adoption by the individual of an eligible adoptee is finalized.
I.R.C. § 72(t)(2)(H)(iii)(II) Eligible Adoptee —
The term “eligible adoptee” means any individual
(other than a child of the taxpayer's spouse) who has not attained
age 18 or is physically or mentally incapable of self-support.
I.R.C. § 72(t)(2)(H)(iv) Treatment Of Plan Distributions
I.R.C. § 72(t)(2)(H)(iv)(I) In General —
If a distribution to an individual would (without regard
to clause (ii)) be a qualified birth or adoption distribution, a plan
shall not be treated as failing to meet any requirement of this title
merely because the plan treats the distribution as a qualified birth
or adoption 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) to such individual exceeds $5,000.
I.R.C. § 72(t)(2)(H)(iv)(II) Controlled Group —
For purposes of subclause (I), the term “controlled
group” means any group treated as a single employer under subsection
(b), (c), (m), or (o) of section 414.
I.R.C. § 72(t)(2)(H)(v) Amount Distributed May Be Repaid
I.R.C. § 72(t)(2)(H)(v)(I) In General —
Any individual who receives a qualified birth or adoption
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.
I.R.C. § 72(t)(2)(H)(v)(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 qualified birth or adoption 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.
I.R.C. § 72(t)(2)(H)(v)(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 a qualified birth or adoption 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.
I.R.C. § 72(t)(2)(H)(v)(IV) Treatment Of Repayments For Distributions From IRAs —
If a contribution is made under subclause (I) with respect
to a qualified birth or adoption 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.
I.R.C. § 72(t)(2)(H)(vi) Definition And Special Rules —
For purposes of this subparagraph—
I.R.C. § 72(t)(2)(H)(vi)(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.
I.R.C. § 72(t)(2)(H)(vi)(II) Exemption Of Distributions From Trustee To Trustee Transfer
And Withholding Rules —
For purposes of sections 401(a)(31), 402(f), and 3405,
a qualified birth or adoption distribution shall not be treated as
an eligible rollover distribution.
I.R.C. § 72(t)(2)(H)(vi)(III) Taxpayer Must Include TIN —
A distribution shall not be treated as a qualified birth
or adoption distribution with respect to any child or eligible adoptee
unless the taxpayer includes the name, age, and TIN of such child
or eligible adoptee on the taxpayer's return of tax for the
taxable year.
I.R.C. § 72(t)(2)(H)(vi)(IV) Distributions Treated As Meeting Plan Distribution Requirements —
Any qualified birth or adoption distribution shall be
treated as meeting the requirements of sections 401(k)(2)(B)(i), 403(b)(7)(A)(i), 403(b)(11), and 457(d)(1)(A).
I.R.C. § 72(t)(2)(I) Distributions for Certain Emergency Expenses —
Editor's Note: Sec. 72(t)(2)(I), below,
as added by Pub. L. 117-328, Div.
T, Sec. 115(a), is applicable to distributions made after December
31, 2023.
I.R.C. § 72(t)(2)(I)(ii) Annual Limitation —
Not more than 1 distribution per calendar year may be
treated as an emergency personal expense distribution by any individual.
I.R.C. § 72(t)(2)(I)(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.R.C. § 72(t)(2)(I)(iii)(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
I.R.C. § 72(t)(2)(I)(iii)(II) —
$1,000.
I.R.C. § 72(t)(2)(I)(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 written certification that the employee
satisfies the conditions of the preceding sentence in determining
whether any distribution is an emergency personal expense distribution.
The Secretary may provide by regulations for exceptions to the rule
of the preceding sentence in cases where the plan administrator has
actual knowledge to the contrary of the employee's certification,
and for procedures for addressing cases of employee misrepresentation.
I.R.C. § 72(t)(2)(I)(v) Treatment Of Plan Distributions —
If a distribution to an individual would (without regard
to clause (ii) or (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 number or 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 (ii) or (iii).
I.R.C. § 72(t)(2)(I)(vi) Amount Distributed May Be Repaid —
Rules similar to the rules of subparagraph (H)(v) shall
apply with respect to an individual who receives a distribution to
which clause (i) applies.
I.R.C. § 72(t)(2)(I)(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 of
the employee, no amount may be treated as such a distribution during
the immediately following 3 calendar years with respect to such plan
unless—
I.R.C. § 72(t)(2)(I)(vii)(I) —
such previous distribution is fully
repaid to such plan pursuant to clause (vi), or
I.R.C. § 72(t)(2)(I)(vii)(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.
I.R.C. § 72(t)(2)(I)(viii) Special Rules —
Rules similar to the rules of subclauses (II) and (IV)
of subparagraph (H)(vi) shall apply.
Editor's Note: Sec. 72(t)(2)(J), below,
after being added Pub. L. 117-328,
Div. T, Sec. 127(e)(2), is applicable to planning years beginning
after December 31, 2023.
I.R.C. § 72(t)(2)(J) Distributions From Pension-Linked Emergency Savings Account —
Distributions from a pension-linked emergency savings
account pursuant to section 402A(e).
Editor's Note: Sec. 72(t)(2)(K), below,
after being added Pub. L. 117-328,
Div. T, Sec. 314(a), is applicable to distributions made after December
31, 2023.
I.R.C. § 72(t)(2)(K) Distribution From Retirement Plan in Case of Domestic Abuse
I.R.C. § 72(t)(2)(K)(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.R.C. § 72(t)(2)(K)(ii)(I) —
$10,000, or
I.R.C. § 72(t)(2)(K)(ii)(II) —
50 percent of the present value of the
nonforfeitable accrued benefit of the employee under the plan.
I.R.C. § 72(t)(2)(K)(iii) Eligible Distribution to A Domestic Abuse Victim —
For purposes of this subparagraph—
I.R.C. § 72(t)(2)(K)(iii)(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 and is made to an individual during the 1-year
period beginning on any date on which the individual is a victim of
domestic abuse by a spouse or domestic partner.
I.R.C. § 72(t)(2)(K)(iii)(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 H. R. 2617—892 independently,
including by means of abuse of the victim's child or another
family member living in the household.
I.R.C. § 72(t)(2)(K)(iv) Treatment Of Plan Distributions —
If a distribution to an individual would (without regard
to clause (ii)) be an eligible distribution to a domestic abuse victim,
a plan shall not be treated as failing to meet any requirement of
this title merely because the plan treats the distribution as an eligible
distribution to a domestic abuse victim, 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 under clause (ii).
I.R.C. § 72(t)(2)(K)(v) Amount Distributed May Be Repaid —
Rules similar to the rules of subparagraph (H)(v) shall
apply with respect to an individual who receives a distribution to
which clause (i) applies.
I.R.C. § 72(t)(2)(K)(vi) Definition And Special Rules —
For purposes of this subparagraph:
I.R.C. § 72(t)(2)(K)(vi)(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 or a plan to which sections 401(a)(11)
and 417 apply.
I.R.C. § 72(t)(2)(K)(vi)(II) Exemption Of Distributions From Trustee To Trustee Transfer
And Withholding Rules —
For purposes of sections 401(a)(31), 402(f), and 3405,
an eligible distribution to a domestic abuse victim shall not be treated
as an eligible rollover distribution.
I.R.C. § 72(t)(2)(K)(vi)(III) 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)(i), 403(b)(11), and 457(d)(1)(A).
I.R.C. § 72(t)(2)(K)(vii) Inflation Adjustment —
In the case of a taxable year beginning in a calendar
year after 2024, the $10,000 amount in clause (ii)(I) shall be increased
by an amount equal to—
I.R.C. § 72(t)(2)(K)(vii)(I) —
such dollar amount, multiplied by
I.R.C. § 72(t)(2)(K)(vii)(II) —
the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year in which the taxable year
begins, determined by substituting ‘calendar year 2023’
for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.
If any amount
after adjustment under the preceding sentence is not a multiple of
$100, such amount shall be rounded to the nearest multiple of $100.
I.R.C. § 72(t)(2)(L) Terminal Illness —
Editor's Note: Sec. 72(t)(2)(L), below,
as added by Sec. 326(a) of Pub. L. 117-328,
Div. T, is applicable to distributions made after the date of enactment
of this Act [Enacted: December 29, 2022].
I.R.C. § 72(t)(2)(L)(i) In General —
Distributions which are made to the employee who is
a terminally ill individual on or after the date on which such employee
has been certified by a physician as having a terminal illness.
I.R.C. § 72(t)(2)(L)(ii) Definition —
For purposes of this subparagraph, the term ‘terminally
ill individual’ has the same meaning given such term under section 101(g)(4)(A), except that ‘84
months’ shall be substituted for ’24 months’.
I.R.C. § 72(t)(2)(L)(iii) Documentation —
For purposes of this subparagraph, an employee shall
not be considered to be a terminally ill individual unless such employee
furnishes sufficient evidence to the plan administrator in such form
and manner as the Secretary may require.
I.R.C. § 72(t)(2)(L)(iv) Amount Distributed May be Repaid —
Rules similar to the rules of subparagraph (H)(v) shall
apply with respect to an individual who receives a distribution to
which clause (i) applies.
Editor's Note: Sec. 72(t)(2)(M), below,
after being added Pub. L. 117-328,
Div. T, Sec. 331(a)(1), is applicable to distributions with respect
to disasters the incident period (as defined in section 72(t)(11)(F)(ii)
of the Internal Revenue Code of 1986, as added by this subsection)
for which begins on or after the date which is 30 days after the date
of the enactment of the Taxpayer Certainty and Disaster Tax Relief
Act of 2020 [Enacted: Dec. 27, 2020].
I.R.C. § 72(t)(2)(M) Distributions From Retirement Plans in Connection With Federally
Declared Disasters —
Any qualified disaster recovery distribution.
I.R.C. § 72(t)(2)(N) Qualified Long-Term Care Distributions —
Editor's Note: Sec. 72(t)(2)(N), below,
after being added Pub. L. 117-328,
Div. T, Sec. 334(c), is applicable to distributions made after the
date which is 3 years after the date of the enactment of this Act.
[Enacted: Dec. 29, 2022]. Note: DISCLOSURE TO TREASURY OF LONG-TERM
CARE INSURANCE PRODUCTS.
I.R.C. § 72(t)(2)(N)(i) In General —
Any qualified long-term care distribution to which section
401(a)(39) applies.
I.R.C. § 72(t)(2)(N)(ii) Exception —
If, with respect to the plan, the individual covered
by the long-term care coverage to which such distribution relates
is the spouse of the employee, clause (i) shall apply only if the
employee and the employee's spouse file a joint return.
I.R.C. § 72(t)(2)(N)(iii) Exemption of Distributions From Trustee to Trustee Transfer
and Withholding Rules —
For purposes of sections 401(a)(31), 402(f), and 3405,
any qualified long-term care distribution described in clause (i)
shall not be treated as an eligible rollover distribution.
I.R.C. § 72(t)(3) Limitations
I.R.C. § 72(t)(3)(A) Certain Exceptions Not To Apply To Individual Retirement Plans —
Subparagraphs (A)(v) and (C) of paragraph (2) shall not apply to distributions
from an individual retirement plan.
I.R.C. § 72(t)(3)(B) Periodic Payments Under Qualified Plans Must Begin After Separation —
Paragraph (2)(A)(iv) shall
not apply to any amount paid from a trust described in section 401(a) which is exempt from
tax under section 501(a) or
from a contract described in section 72(e)(5)(D)(ii) unless
the series of payments begins after the employee separates from service.
I.R.C. § 72(t)(4) Change In Substantially Equal Payments
I.R.C. § 72(t)(4)(A) In General —
If—
I.R.C. § 72(t)(4)(A)(i) —
paragraph (1) does not apply to a distribution
by reason of paragraph (2)(A)(iv),
and
I.R.C. § 72(t)(4)(A)(ii) —
the series of payments under such
paragraph are subsequently modified (other than by reason of death
or disability or a distribution to which paragraph (10) applies)—
I.R.C. § 72(t)(4)(A)(ii)(I) —
before the close of the 5-year period
beginning with the date of the first payment and after the employee
attains age 591/2, or
I.R.C. § 72(t)(4)(A)(ii)(II) —
before the employee attains age 591/2,
the taxpayer's tax for the 1st taxable
year in which such modification occurs shall be increased by an amount,
determined under regulations, equal to the tax which (but for paragraph
(2)(A)(iv))
would have been imposed, plus interest for the deferral period.
I.R.C. § 72(t)(4)(B) Deferral Period —
For purposes of this paragraph, the term “deferral
period” means the period beginning with the taxable year in which
(without regard to paragraph (2)(A)(iv)) the distribution
would have been includible in gross income and ending with the taxable
year in which the modification described in subparagraph (A) occurs.
I.R.C. § 72(t)(4)(C) Rollovers To Subsequent Plan —
If—
I.R.C. § 72(t)(4)(C)(i) —
payments described in paragraph (2)(A)(iv)
are being made from a qualified retirement plan,
I.R.C. § 72(t)(4)(C)(ii) —
a transfer or a rollover from such qualified
retirement plan of all or a portion of the taxpayer's benefit
under the plan is made to another qualified retirement plan, and
I.R.C. § 72(t)(4)(C)(iii) —
distributions from the transferor and
transferee plans would in combination continue to satisfy the requirements
of paragraph (2)(A)(iv) if they had been made only from the transferor
plan,
such transfer
or rollover shall not be treated as a modification under subparagraph
(A)(ii), and compliance with paragraph (2)(A)(iv) shall be determined
on the basis of the combined distributions described in clause (iii).
I.R.C. § 72(t)(5) Employee —
For purposes of this subsection, the term “employee"
includes any participant, and in the case of an individual retirement
plan, the individual for whose benefit such plan was established.
I.R.C. § 72(t)(6) Special Rules For Simple Retirement Accounts —
Editor's Note: Sec. 72(t)(6), below,
before amendment by Pub. L. 117-328,
Div. T, Sec. 332(b), is effective to plan years before January 1,
2024.
In the case
of any amount received from a simple retirement account (within the
meaning of section 408(p))
during the 2-year period beginning on the date such individual first
participated in any qualified salary reduction arrangement maintained
by the individual's employer under section 408(p)(2), paragraph (1) shall be applied by substituting “25
percent” for “10 percent”.
I.R.C. § 72(t)(6) Special Rules For Simple Retirement Accounts —
Editor's Note: Sec. 72(t)(6), below,
after amendment by Pub. L. 117-328,
Div. T, Sec. 332(b), is effective to plan years after December 31,
2023.
I.R.C. § 72(t)(6)(A) In General —
In the case of any amount received from a simple retirement
account (within the meaning of section 408(p)) during the 2-year period
beginning on the date such individual first participated in any qualified
salary reduction arrangement maintained by the individual's employer
under section 408(p)(2),
paragraph (1) shall
be applied by substituting “25 percent” for “10
percent”.
I.R.C. § 72(t)(6)(B) Waiver In Case Of Plan Conversion To 401(k) Or 403(b) —
In the case of an employee of an employer which terminates
the qualified salary reduction arrangement of the employer under section
408(p) and establishes a qualified cash or deferred arrangement described
in section 401(k) or purchases annuity contracts described in section
403(b), subparagraph (A) shall not apply to any amount which is paid
in a rollover contribution described in section 408(d)(3) into a qualified
trust under section 401(k) (but only if such contribution is subsequently
subject to the rules of section 401(k)(2)(B)) or an annuity contract
described in section 403(b) (but only if such contribution is subsequently
subject to the rules of section 403(b)(12)) for the benefit of the
employee.
I.R.C. § 72(t)(7) Qualified Higher Education Expenses —
For purposes of paragraph (2)(E)—
I.R.C. § 72(t)(7)(A) In General —
The term “qualified higher education expenses”
means qualified higher education expenses (as defined in section 529(e)(3)) for education
furnished to—
I.R.C. § 72(t)(7)(A)(i) —
the taxpayer,
I.R.C. § 72(t)(7)(A)(ii) —
the taxpayer's spouse, or
I.R.C. § 72(t)(7)(A)(iii) —
any child (as defined in section
152(f)(1))
or grandchild of the taxpayer or the taxpayer's spouse,
at an eligible educational institution (as defined in
section 529(e)(5)).
I.R.C. § 72(t)(7)(B) Coordination With Other Benefits —
The amount of qualified higher education expenses for
any taxable year shall be reduced as provided in section 25A(g)(2).
I.R.C. § 72(t)(8) Qualified First-Time Homebuyer Distributions —
For purposes of paragraph (2)(F)—
I.R.C. § 72(t)(8)(A) In General —
The term “qualified first-time homebuyer 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 acquisition costs with
respect to a principal residence of a first-time homebuyer who is
such individual, the spouse of such individual, or any child, grandchild,
or ancestor of such individual or the individual's spouse.
I.R.C. § 72(t)(8)(B) Lifetime Dollar Limitation —
The aggregate amount of payments or distributions received
by an individual which may be treated as qualified first-time homebuyer
distributions for any taxable year shall not exceed the excess (if
any) of—
I.R.C. § 72(t)(8)(B)(i) —
$10,000, over
I.R.C. § 72(t)(8)(B)(ii) —
the aggregate amounts treated as
qualified first-time homebuyer distributions with respect to such
individual for all prior taxable years.
I.R.C. § 72(t)(8)(C) Qualified Acquisition Costs —
For purposes of this paragraph, the term “qualified
acquisition costs” means the costs of acquiring, constructing,
or reconstructing a residence. Such term includes any usual or reasonable
settlement, financing, or other closing costs.
I.R.C. § 72(t)(8)(D) First-Time Homebuyer; Other Definitions —
For purposes of this paragraph—
I.R.C. § 72(t)(8)(D)(i) First-Time Homebuyer —
The term “first-time homebuyer” means any
individual if—
I.R.C. § 72(t)(8)(D)(i)(I) —
such individual (and if married, such
individual's spouse) had no present ownership interest in a principal
residence during the 2-year period ending on the date of acquisition
of the principal residence to which this paragraph applies, and
I.R.C. § 72(t)(8)(D)(i)(II) —
subsection (h) or (k) of section 1034 (as in effect on the day
before the date of the enactment of this paragraph) did not suspend
the running of any period of time specified in section 1034 (as so in effect) with respect
to such individual on the day before the date the distribution is
applied pursuant to subparagraph (A).
I.R.C. § 72(t)(8)(D)(ii) Principal Residence —
The term “principal residence” has the
same meaning as when used in section 121.
I.R.C. § 72(t)(8)(D)(iii) Date Of Acquisition —
The term “date of acquisition” means the
date—
I.R.C. § 72(t)(8)(D)(iii)(I) —
on which a binding contract to acquire
the principal residence to which subparagraph (A) applies is entered
into, or
I.R.C. § 72(t)(8)(D)(iii)(II) —
on which construction or reconstruction
of such a principal residence is commenced.
I.R.C. § 72(t)(8)(E) Special Rule Where Delay In Acquisition —
If any distribution from any individual retirement
plan fails to meet the requirements of subparagraph (A) solely by reason of
a delay or cancellation of the purchase or construction of the residence,
the amount of the distribution may be contributed to an individual
retirement plan as provided in section 408(d)(3)(A)(i) (determined
by substituting “120th day” for “60th day”
in such section), except that—
I.R.C. § 72(t)(8)(E)(i) —
section 408(d)(3)(B) shall not
be applied to such contribution, and
I.R.C. § 72(t)(8)(E)(ii) —
such amount shall not be taken into
account in determining whether section 408(d)(3)(B) applies to
any other amount.
I.R.C. § 72(t)(8)(F) Recontributions —
Editor's Note: Sec. 72(t)(8)(F), below,
after being added Pub. L. 117-328,
Div. T, Sec. 331(b)(1), is to recontributions of withdrawals for home
purchases with respect to disasters the incident period (as defined
in section 72(t)(11)(F)(ii) of the Internal Revenue Code of 1986,
as added by this subsection) for which begins on or after the date
which is 30 days after the date of the enactment of the Taxpayer Certainty
and Disaster Tax Relief Act of 2020 [Enacted: Dec. 27, 2020].
I.R.C. § 72(t)(8)(F)(i) General Rule
I.R.C. § 72(t)(8)(F)(i)(I) In General —
Any individual who received a qualified distribution
may, during the applicable period, make one or more contributions
in an aggregate amount not to exceed the amount of such qualified
distribution to an eligible retirement plan (as defined in section
402(c)(8)(B)) 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), or 408(d)(3), as the case may be.
I.R.C. § 72(t)(8)(F)(i)(II) Treatment Of Repayments —
Rules similar to the rules of clauses (ii) and (iii)
of paragraph (11)(C) shall apply for purposes of this subsection.
I.R.C. § 72(t)(8)(F)(ii) Qualified Distribution —
For purposes of this subparagraph, the term “qualified
distribution” means any distribution—
I.R.C. § 72(t)(8)(F)(ii)(I) —
which is a qualified first-time homebuyer
distribution,
I.R.C. § 72(t)(8)(F)(ii)(II) —
which was to be used to purchase or
construct a principal residence in a qualified disaster area, but
which was not so used on account of the qualified disaster with respect
to such area, and
I.R.C. § 72(t)(8)(F)(ii)(III) —
which was received during the period
beginning on the date which is 180 days before the first day of the
incident period of such qualified disaster and ending on the date
which is 30 days after the last day of such incident period.
I.R.C. § 72(t)(8)(F)(iii) Applicable Period —
For purposes of this subparagraph, the term “applicable
period” means, in the case of a principal residence in a qualified
disaster area with respect to any qualified disaster, the period beginning
on the first day of the incident period of such qualified disaster
and ending on the date which is 180 days after the applicable date
with respect to such disaster.
I.R.C. § 72(t)(9) Special Rule For Rollovers To Section 457 Plans —
For purposes of this subsection, a distribution from
an eligible deferred compensation plan (as defined in section 457(b)) of an eligible employer
described in section 457(e)(1)(A) shall
be treated as a distribution from a qualified retirement plan described
in 4974(c)(1) to
the extent that such distribution is attributable to an amount transferred
to an eligible deferred compensation plan from a qualified retirement
plan (as defined in section 4974(c)).
I.R.C. § 72(t)(10) Distributions To Qualified Public Safety Employees And Private
Sector Firefighters
I.R.C. § 72(t)(10)(A) In General —
In the case of a distribution to a qualified public
safety employee from a governmental plan (within the meaning of section 414(d)), or a distribution from
a plan described in clause (iii), (iv), or (vi) of section 402(c)(8)(B)
to an employee who provides firefighting services, paragraph (2)(A)(v) shall be
applied by substituting “age 50 or 25 years of service under the plan,
whichever is earlier” for “age 55”.
I.R.C. § 72(t)(10)(B) Qualified Public Safety Employee —
For purposes of this paragraph, the term “qualified
public safety employee” means—
I.R.C. § 72(t)(10)(B)(i) —
any employee of a State or political
subdivision of a State who provides police protection, firefighting
services, or emergency medical services, or services as a corrections
officer or as a forensic security employee providing for the care,
custody, and control of forensic patients for any area within the
jurisdiction of such State or political subdivision, or
I.R.C. § 72(t)(10)(B)(ii) —
any Federal law enforcement officer
described in section 8331(20) or 8401(17) of title 5, United States
Code, any Federal customs and border protection officer described
in section 8331(31) or 8401(36) of such title, any Federal firefighter
described in section 8331(21) or 8401(14) of such title, any air
traffic controller described in 8331(30) or 8401(35) of such title,
any nuclear materials courier described in section 8331(27) or 8401(33)
of such title, any member of the United States Capitol Police, any
member of the Supreme Court Police, or any diplomatic security special
agent of the Department of State.
I.R.C. § 72(t)(11) Qualified Disaster Recovery Distribution —
Editor's Note: Sec. 331(a)(2) of Pub. L. 117-328, Div. T, added Subsec.
(t)(11), applicable to distributions with respect to disasters the
incident period (as defined in section 72(t)(11)(F)(ii) of the Internal
Revenue Code of 1986, as added by this subsection) for which begins
on or after the date which is 30 days after the date of the enactment
of the Taxpayer Certainty and Disaster Tax Relief Act of 2020 [Enacted:
Dec. 27, 2020].
I.R.C. § 72(t)(11)(A) In General —
Except as provided in subparagraph (B), the term “qualified
disaster recovery distribution” means any distribution made—
I.R.C. § 72(t)(11)(A)(i) —
on or after the first day of the incident
period of a qualified disaster and before the date that is 180 days
after the applicable date with respect to such disaster, and
I.R.C. § 72(t)(11)(A)(ii) —
to an individual whose principal place
of abode at any time during the incident period of such qualified
disaster is located in the qualified disaster area with respect to
such qualified disaster and who has sustained an economic loss by
reason of such qualified disaster.
I.R.C. § 72(t)(11)(B) Aggregate Dollar Limitation
I.R.C. § 72(t)(11)(B)(i) In General —
For purposes of this subsection, the aggregate amount
of distributions received by an individual which may be treated as
qualified disaster recovery distributions with respect to any qualified
disaster in all taxable years shall not exceed $22,000.
I.R.C. § 72(t)(11)(B)(ii) Treatment Of Plan Distributions —
If a distribution to an individual would (without regard
to clause (i)) be a qualified disaster recovery distribution, a plan
shall not be treated as violating any requirement of this title merely
because the plan treats such distribution as a qualified disaster
recovery 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) to such individual exceeds $22,000
with respect to the same qualified disaster.
I.R.C. § 72(t)(11)(B)(iii) Controlled Group —
For purposes of clause (ii), the term “controlled
group” means any group treated as a single employer under subsection
(b), (c), (m), or (o) of section 414.
I.R.C. § 72(t)(11)(C) Amount Distributed May Be Repaid
I.R.C. § 72(t)(11)(C)(i) In General —
Any individual who receives a qualified disaster recovery
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 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.
I.R.C. § 72(t)(11)(C)(ii) Treatment Of Repayments Of Distributions From Eligible Retirement
Plans Other Than IRAS —
For purposes of this title, if a contribution is made
pursuant to clause (i) with respect to a qualified disaster recovery
distribution from a 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 the qualified disaster recovery distribution
in an eligible rollover distribution (as defined in section 402(c)(4))
and as having transferred the amount to the eligible retirement plan
in a direct trustee to trustee transfer within 60 days of the distribution.
I.R.C. § 72(t)(11)(C)(iii) Treatment Of Repayments For Distributions From IRAS —
For purposes of this title, if a contribution is made
pursuant to clause (i) with respect to a qualified disaster recovery
distribution from an individual retirement plan, then, to the extent
of the amount of the contribution, the qualified disaster recovery
distribution shall be treated as a distribution described in section
408(d)(3) and as having been transferred to the eligible retirement
plan in a direct trustee to trustee transfer within 60 days of the
distribution.
I.R.C. § 72(t)(11)(D) Income Inclusion Spread Over 3-Year Period
I.R.C. § 72(t)(11)(D)(i) In General —
In the case of any qualified disaster recovery distribution,
unless the taxpayer elects not to have this subparagraph apply for
any taxable year, any amount required to be included in gross income
for such taxable year shall be so included ratably over the 3-taxable
year period beginning with such taxable year.
I.R.C. § 72(t)(11)(D)(ii) Special Rule —
For purposes of clause (i), rules similar to the rules
of subparagraph (E) of section 408A(d)(3) shall apply.
I.R.C. § 72(t)(11)(E) Qualified Disaster —
For purposes of this paragraph and paragraph (8), the
term “qualified disaster” means any disaster with respect
to which a major disaster has been declared by the President under
section 401 of the Robert T. Stafford Disaster Relief and Emergency
Assistance Act after December 27, 2020.
I.R.C. § 72(t)(11)(F) Other Definitions —
For purposes of this paragraph and paragraph (8)—
I.R.C. § 72(t)(11)(F)(i) Qualified Disaster Area
I.R.C. § 72(t)(11)(F)(i)(I) In General —
The term “qualified disaster area” means,
with respect to any qualified disaster, the area with respect to which
the major disaster was declared under the Robert T. Stafford Disaster
Relief and Emergency Assistance Act.
I.R.C. § 72(t)(11)(F)(i)(II) Exceptions —
Such term shall not include any area which is a qualified
disaster area solely by reason of section 301 of the Taxpayer Certainty
and Disaster Tax Relief Act of 2020.
I.R.C. § 72(t)(11)(F)(ii) Incident Period —
The term “incident period” means, with respect
to any qualified disaster, the period specified by the Federal Emergency
Management Agency as the period during which such disaster occurred.
I.R.C. § 72(t)(11)(F)(iii) Applicable Date —
The term “applicable date” means the latest
of—
I.R.C. § 72(t)(11)(F)(iii)(I) —
the date of the enactment of this paragraph,
I.R.C. § 72(t)(11)(F)(iii)(II) —
the first day of the incident period
with respect to the qualified disaster, or
I.R.C. § 72(t)(11)(F)(iii)(III) —
the date of the disaster declaration
with respect to the qualified disaster.
I.R.C. § 72(t)(11)(F)(iv) Eligible Retirement Plan —
The term “eligible retirement plan” shall
have the meaning given such term by section 402(c)(8)(B).
I.R.C. § 72(t)(11)(G) Special Rules
I.R.C. § 72(t)(11)(G)(i) Exemption Of Distributions From Trustee To Trustee Transfer
And Withholding Rules —
For purposes of sections 401(a)(31), 402(f), and 3405,
qualified disaster recovery distributions shall not be treated as
eligible rollover distributions.
I.R.C. § 72(t)(11)(G)(ii) Qualified Disaster Recovery Distributions Treated As Meeting
Plan Distribution Requirements —
For purposes of this title—
I.R.C. § 72(t)(11)(G)(ii)(I) —
a qualified disaster recovery distribution
shall be treated as meeting the requirements of sections 401(k)(2)(B)(i),
403(b)(7)(A)(i), 403(b)(11), and 457(d)(1)(A), and
I.R.C. § 72(t)(11)(G)(ii)(II) —
in the case of a money purchase pension
plan, a qualified disaster recovery distribution which is an in-service
withdrawal shall be treated as meeting the requirements of section
401(a) applicable to distributions.
I.R.C. § 72(u) Treatment Of Annuity Contracts Not Held By Natural Persons
I.R.C. § 72(u)(1) In General —
If any annuity contract is held by a person who is
not a natural person—
I.R.C. § 72(u)(1)(A) —
such contract shall not be treated
as an annuity contract for purposes of this subtitle (other than
subchapter L), and
I.R.C. § 72(u)(1)(B) —
the income on the contract for any
taxable year of the policyholder shall be treated as ordinary income
received or accrued by the owner during such taxable year.
For purposes of this paragraph, holding by a trust or
other entity as an agent for a natural person shall not be taken
into account.
I.R.C. § 72(u)(2) Income On The Contract
I.R.C. § 72(u)(2)(A) In General —
For purposes of paragraph (1), the term “income on the
contract” means, with respect to any taxable year of the policyholder,
the excess of—
I.R.C. § 72(u)(2)(A)(i) —
the sum of the net surrender value
of the contract as of the close of the taxable year plus all distributions
under the contract received during the taxable year or any prior
taxable year, reduced by
I.R.C. § 72(u)(2)(A)(ii) —
the sum of the amount of net premiums
under the contract for the taxable year and prior taxable years and
amounts includible in gross income for prior taxable years with respect
to such contract under this subsection.
Where necessary to prevent the avoidance of this subsection,
the Secretary may substitute “fair market value of the contract"
for “net surrender value of the contract” each place it appears in
the preceding sentence.
I.R.C. § 72(u)(2)(B) Net Premiums —
For purposes of this paragraph, the term “net premiums"
means the amount of premiums paid under the contract reduced by any
policyholder dividends.
I.R.C. § 72(u)(3) Exceptions —
This subsection shall not apply to any annuity contract
which—
I.R.C. § 72(u)(3)(A) —
is acquired by the estate of a decedent
by reason of the death of the decedent,
I.R.C. § 72(u)(3)(B) —
is held under a plan described in section 401(a) or 403(a), under a program described
in section 403(b),
or under an individual retirement plan,
I.R.C. § 72(u)(3)(C) —
is a qualified funding asset (as defined
in section 130(d),
but without regard to whether there is a qualified assignment),
I.R.C. § 72(u)(3)(D) —
is purchased by an employer upon the
termination of a plan described in section 401(a) or 403(a) and is held by the employer
until all amounts under such contract are distributed to the employee
for whom such contract was purchased or the employee's beneficiary,
or
I.R.C. § 72(u)(3)(E) —
is an immediate annuity.
I.R.C. § 72(u)(4) Immediate Annuity —
For purposes of this subsection, the term “immediate
annuity” means an annuity—
I.R.C. § 72(u)(4)(A) —
which is purchased with a single premium
or annuity consideration,
I.R.C. § 72(u)(4)(B) —
the annuity starting date (as defined
in subsection (c)(4))
of which commences no later than 1 year from the date of the purchase
of the annuity, and
I.R.C. § 72(u)(4)(C) —
which provides for a series of substantially
equal periodic payments (to be made not less frequently than annually)
during the annuity period.
I.R.C. § 72(v) 10-Percent Additional Tax For Taxable Distributions From Modified
Endowment Contracts
I.R.C. § 72(v)(1) Imposition Of Additional Tax —
If any taxpayer receives any amount under a modified
endowment contract (as defined in section 7702A), the taxpayer's tax under
this chapter for the taxable year in which such amount is received
shall be increased by an amount equal to 10 percent of the portion
of such amount which is includible in gross income.
I.R.C. § 72(v)(2) Subsection Not To Apply To Certain Distributions —
Paragraph (1) shall
not apply to any distribution—
I.R.C. § 72(v)(2)(A) —
made on or after the date on which
the taxpayer attains age 591/2,
I.R.C. § 72(v)(2)(B) —
which is attributable to the taxpayer's
becoming disabled (within the meaning of subsection (m)(7)), or
I.R.C. § 72(v)(2)(C) —
which is part of a series of substantially
equal periodic payments (not less frequently than annually) made
for the life (or life expectancy) of the taxpayer or the joint lives
(or joint life expectancies) of such taxpayer and his beneficiary.
I.R.C. § 72(w) Application Of Basis Rules To Nonresident Aliens
I.R.C. § 72(w)(1) In General —
Notwithstanding any other provision of this section,
for purposes of determining the portion of any distribution which
is includible in gross income of a distributee who is a citizen or
resident of the United States, the investment in the contract shall
not include any applicable nontaxable contributions or applicable
nontaxable earnings.
I.R.C. § 72(w)(2) Applicable Nontaxable Contribution —
For purposes of this subsection, the term “applicable
nontaxable contribution” means any employer or employee contribution—
I.R.C. § 72(w)(2)(A) —
which was made with respect to compensation—
I.R.C. § 72(w)(2)(A)(i) —
for labor or personal services performed
by an employee who, at the time the labor or services were performed,
was a nonresident alien for purposes of the laws of the United States
in effect at such time, and
I.R.C. § 72(w)(2)(A)(ii) —
which is treated as from sources
without the United States, and
I.R.C. § 72(w)(2)(B) —
which was not subject to income tax
(and would have been subject to income tax if paid as cash compensation
when the services were rendered) under the laws of the United States
or any foreign country.
I.R.C. § 72(w)(3) Applicable Nontaxable Earnings —
For purposes of this subsection, the term “applicable
nontaxable earnings” means earnings—
I.R.C. § 72(w)(3)(A) —
which are paid or accrued with respect
to any employer or employee contribution which was made with respect
to compensation for labor or personal services performed by an employee,
I.R.C. § 72(w)(3)(B) —
with respect to which the employee
was at the time the earnings were paid or accrued a nonresident alien
for purposes of the laws of the United States, and
I.R.C. § 72(w)(3)(C) —
which were not subject to income tax
under the laws of the United States or any foreign country.
I.R.C. § 72(w)(4) Regulations —
The Secretary shall prescribe such regulations as
may be necessary to carry out the provisions of this subsection,
including regulations treating contributions and earnings as not
subject to tax under the laws of any foreign country where appropriate
to carry out the purposes of this subsection.
I.R.C. § 72(x) Cross Reference —
For limitation on adjustments to basis of annuity contracts
sold, see section 1021.
(Aug. 16, 1954, ch. 736, 68A Stat. 20; Oct. 10, 1962,
Pub. L. 87-792, Sec. 4(a),
(b), 76 Stat. 821; Oct. 16, 1962, Pub.
L. 87-834, Sec. 11(b), 76 Stat. 1005; Feb. 26, 1964, Pub. L. 88-272, title II, Sec. 232(b),
78 Stat. 110; June 21, 1965, Pub. L.
89-44, title VIII, Sec. 809(d)(2), 79 Stat. 167;
July 30, 1965, Pub. L. 89-97,
title I, Sec. 106(d)(2), 79 Stat. 337; Mar. 8, 1966, Pub. L. 89-365, Sec. 1(b), 80
Stat. 32; Dec. 30, 1969, Pub. L. 91-172,
title V, Sec. 515(b), 83 Stat. 644; Sept. 2, 1974, Pub. L. 93-406, title II, Sec. 2001(e)(5),
(g)(1), (2)(A), (h)(2), (3), 2002(g)(10), 2005(c)(3), 2007(b)(2),
88 Stat. 955, 957, 970, 991, 994; Oct. 4, 1976, Pub. L. 94-455, title XIX, Sec. 1901(a)(12),
(13), 1906(b)(13)(A), 1951(b)(1)(A), 90 Stat. 1765, 1834, 1836; Aug.
13, 1981, Pub. L. 97-34,
title III, Sec. 311(b)(1), 312(d), (e)(1), 95 Stat. 278, 284; Sept.
3, 1982, Pub. L. 97-248,
title II, Sec. 236(a), (b), 237(d), 265(a), (b)(1), 96 Stat. 509-511,
544-546; Jan. 12, 1983, Pub. L. 97-448,
title I, Sec. 103(c)(3)(B)(i), (6), Aug. 12, 1983, title III, Sec.
306(c)(11), Jan. 12, 1982, , 96 Stat. 2376; 2404; Pub. L. 98-76, title II, Sec. 224(a),
97 Stat. 421; July 18, 1984, Pub. L.
98-369, div. A, title II, Sec. 211(b)(1), 222(a),
(b), title IV, Sec. 421(b)(1), 491(d)(3), (4), title V, Sec. 521(d),
523(a), (b), title VII, Sec. 713(b)(1)-(c)(1)(B), (d)(1), 98 Stat.
754, 774, 794, 849, 868, 871, 872, 956, 957; Aug. 23, 1984, Pub. L. 98-397, title II, Sec. 204(c)(2),
98 Stat. 1448; Oct. 22, 1986, Pub.
L. 99-514, title XI, Sec. 1101(b)(2)(B), (C), 1122(c),
1123(a), (b), (d)(1), 1134(a)-(d), 1135(a), title XVIII, Sec. 1826(a),
(b)(1)-(3), (c), (d), 1852(a)(2), (c)(1)-(4), 1854(b)(1), 1898(c)(1)(B),
100 Stat. 2413, 2414, 2467, 2472, 2474, 2475, 2483, 2484, 2848-2850,
2864, 2867, 2878, 2951; Nov. 10, 1988, Pub.
L. 100-647, title I, Sec. 1011A(b)(1)(A), (B), (2),
(9), (c)(1)-(8), (h), (i), 1018(k), (t)(1)(A), (B), (u)(8), title
V, Sec. 5012(a), (b)(1), (d), (e), 102 Stat. 3472, 3474-3476, 3482,
3583, 3587, 3590, 3661, 3662, 3664; Dec. 19, 1989, Pub. L. 101-239, title VII, Sec.
7811(m)(4), 7815(a)(3), (5), 103 Stat. 2412, 2414; Nov. 5, 1990, Pub. L. 101-508, title XI, Sec.
11802(a), 104 Stat. 1388-529; July 3, 1992, Pub. L. 102-318, title V, Sec. 521,
106 Stat. 290; Aug. 20, 1996, Pub.
L. 104-188, title I, Sec. 1403, 1421, 1463, 1704,
110 Stat. 1755; Aug. 21, 1996, Pub.
L. 104-191, title III, Sec. 361, 110 Stat. 1936; Pub. L. 105-34, title II, III, X,
Sec. 203, 303, 1075, Aug. 5, 1997, 111 Stat 788; Pub. L. 105-206, title III, Sec.
3436(a), title VI, Sec. 6004(d)(3)(B), 6005(c)(1), 6023(4), July
22, 1998, 112 Stat 685; Pub. L. 107-16,
title IV, Sec. 402(a), title VI, Sec. 632(a), 641, June 7, 2001,
115 Stat. 38; Pub. L. 107-22,
Sec. 1(b), July 26, 2001, 115 Stat. 196; Pub. L. 107-90, title II, Sec. 204(e)(2),
Dec. 21, 2001, 115 Stat. 878; Pub.
L. 108-311, title II, IV, Sec. 207(6), 207(7), 408(a)(4),
Oct. 4, 2004, 118 Stat. 1166; Pub.
L. 108-357, title IX, Sec. 906(a), Oct. 22, 2004,
118 Stat. 1418; Pub. L. 109-280,
title VIII, Sec. 827(a), 828(a), 844(a), Aug. 17, 2006, 120 Stat.
780; Pub. L. 110-245, Sec.
107(a), June 17, 2008, 122 Stat. 1624; Pub. L. 110-458, title I, Sec. 108(e),
Dec. 23, 2008, 122 Stat. 5092; Pub.
L. 111-240, title II, Sec. 2113, Sept. 27, 2010,
124 Stat. 2504; Pub. L.
112-141, Sec. 100121(c), July 6, 2012, 126 Stat.
405; Pub. L. 113-295,
Div. A, title II, Sec. 221(a)(14), Dec. 19, 2014, 128 Stat. 4010; Pub. L. 114-26, Sec. 2, June 29, 2015; Pub. L. 114-113, Div. Q, title III,
Sec. 308(a); Pub. L. 116-94, Div.
O, title I, Sec. 108(a), 113(a), Dec. 20, 2019; Pub. L. 117-328, Div. T, title I, sec.
115(a), 127(e)(2)-(3), title III, Sec. 308, Sec. 311(a), Sec. 314(a),
Sec. 323(a), (b), (d), Sec. 326(a), Sec. 329, Sec. 330, Sec. 331(a)-(c),
Sec. 333(a)(1)-(3), Sec. 334(c), title IV, Sec. 401(b)(1), Dec. 29.
2022.)
BACKGROUND NOTES
AMENDMENTS
2022 -
subsec. (d). Pub. L. 117-328,
Div. T, Sec. 127(e)(3), amended subsec. (d) by adding new par. (3).
Subsec. (p). Pub. L. 117-328, Div. T, Sec. 331(c)(1),
amended subsec. (p) by adding new par. (6).
Subsec. (q)(2). Pub. L. 117-328, Div. T, Sec. 323(d)(1),
amended par. (2) by adding flush sentence.
Subsec. (q)(3). Pub. L. 117-328, Div. T, Sec. 323(b)(1),
amended par. (3) by redesignating clauses (i) and (ii) of subparagraph
(B) as subclauses (I) and (II).
Subsec. (q)(3).Pub. L. 117-328, Div. T, Sec. 323(b)(2),
amended par. (3) by redesignating subparagraphs (A) and (B) as clauses
(i) and (ii).
Subsec. (q)(3). Pub. L. 117-328, Div. T, Sec. 323(b)(3),
amended par. (3) by substituting “(A) IN GENERAL.—If—”
for “PAYMENTS.—If”.
Subsec. (q)(3)(B). Pub. L. 117-328, Div. T, Sec. 323(b)(4),
amended par. (3) and by adding new subpar. (B).
Subsec. (t)(2)(A). Pub. L. 117-328, Div. T, Sec. 323(d)(1),
amended subpar. (A) by adding flush sentence at the end.
subsec. (t)(2)(A).Pub. L. 117-328, Div. T, Sec. 333(a)(1)-(3),
amended (t)(2)(A), by striking “or” at the end of clause
(vii), substituting “, or” for the period at the end of
clause (viii), and adding new clause (ix).
Subsec. (t)(2)(A). Pub. L. 117-328, Div. T, Sec. 333(a)(3),
amended subsec. (t)(2)(A) by adding new clause (ix).
Subsec. (t)(2)(I). Pub. L. 117-328, Div. T, Sec. 115(a), par.
(2) amended by: Sec. 115(a), adding new subpar. (I).
Subsec. (t)(2)(J). Pub. L. 117-328, Div. T, 127(e)(2), amended
(t)(2) by adding new subpar. (J).
Subsec. (t)(2)(H)(vi)(IV). Pub. L. 117-328, Div. T, title IV, Sec.
401(b)(1), amended subpar. (IV) by substituting “403(b)(7)(A)(i)”
for “403(b)(7)(A)(ii)”.
Subsec. (t)(2)(H)(v)(I). Pub. L. 117-328, Div. T, Sec. 311(a), amended
subsec. (t)(2)(H)(v)(I) by substituting “may, at any time during
the 3-year period beginning on the day after the date on which such
distribution was received, make” for “may make”.
Subsec. (t)(2)(K). Pub. L. 117-328, Div. T, Sec. 314(a), amended
par. (2) by adding new subpar. (K).
Subsec. (t)(2)(L). Pub. L. 117-328, Div. T, 326(a), amended
subsec. (t)(2) by adding new subpar. (L).
Subsec. 72(t)(2)(M). Pub. L. 117-328, Div. T, Sec. 331(a)(1)
amended par. (2) by adding new subpar. (M).
Subsec. (t)(2)(N).Pub. L. 117-328, Div. T, Sec. 334(c), amended
(t)(2) by adding new subpar. (N).
Subsec. (t)(4)(C). Pub. L. 117-328, Div. T, Sec. 323(a), amended
par. (4) by adding new subpar. (C).
Subsec. (t)(6). Pub. L. 117-328, Div T, Sec. 332(b) amended
par. (6) by striking “ACCOUNTS.—In the case of’’,
and inserting “ACCOUNTS.—(A) In General. — In the
case of” and by adding at the end the new subpar. (B). Prior
to amendment par. (6) read: “(6) In the case of any amount received
from a simple retirement account (within the meaning of section 408(p)
) during the 2-year period beginning on the date such individual first
participated in any qualified salary reduction arrangement maintained
by the individual's employer under section 408(p)(2) , paragraph (1)
shall be applied by substituting “25 percent” for “10
percent”.
Subsec. (t)(8)(F). Pub. L. 117-328, Div. T, Sec. 331(b)(1),
amended par. (8) by adding a new subpar. (F).
Subsec. (t)(10)(A). Pub. L. 117-328, Div. T, Sec. 308(a), amended
subpar (A) by substituting “414(d)) or a distribution from a
plan described in clause (iii), (iv), or (vi) of section 402(c)(8)(B)
to an employee who provides firefighting services” for “414(d))”.
Subsec. (t)(10). Pub. L. 117-328, Div. T, Sec. 308(b), amended
par. (10) heading by substituting “And Private Sector Firefighters”
for “In Governmental Plans”.
Subsec. (t)(10)(A). Pub. L. 117-328, Div. T, Sec. 329(a), amended
subpar. (A) by substituting “age 50 or 25 years of service under
the plan, whichever is earlier” for “age 50”.
Subsec. (t)(10)(B)(i).Pub. L. 117-328 Div. T, Sec. 330(a), amended
clause (i), by substituting “emergency medical services, or
services as a corrections officer or as a forensic security employee
providing for the care, custody, and control of forensic patients”
for “or emergency medical services”.
Subsec. (t)(11). Pub. L. 117-328, Div. T, Sec. 331(a)(2),
amended subsec. (t)(2) by adding a new par. (11).
2019 -
Subsec. (p)(2)(D)-(E). Pub. L. 116-94,
Div. O, Sec. 108(a), amended par. (2) by redesignating subpar. (D)
as par. (E) and by adding a new subpar. (D).
Subsec. (t)(2)(H). Pub.
L. 116-94, Div. O, Sec. 113(a), added subpar. (H).
2015 - Subsec. (t)(10)(B)(ii). Pub. L. 114-113 Div. Q, Sec. 308(a),
amended clause (ii) by substituting “any” for “or
any” and by adding “‘, any nuclear materials courier
described in section 8331(27) or 8401(33) of such title, any member
of the United States Capitol Police, any member of the Supreme Court
Police, or any diplomatic security special agent of the Department
of State” before the period at the end.
Subsec. (t)(4)(A)(ii). Pub.
L. 114-27, Sec. 2(c), amended clause (ii) by inserting “or
a distribution to which paragraph (10) applies” after “other
than by reason of death or disability”.
Subsec. (t)(10)(A). Pub.
L. 114-27, Sec. 2(b), amended subpar. (A) by striking “which
is a defined benefit plan” after “414(d)”.
Subsec. (t)(10)(B). Pub.
L. 114-27, Sec. 2(a), amended subpar. (B) by substituting “,
or” for the period at the end, by substituting “means—(i)
any employee” for “means—any employee, and by adding
clause (ii).
2014 - Subsec. (c)(4). Pub. L. 113-295, Div. A, Sec. 221(a)(14)(A),
amended par. (4) by striking “; except that if such date was
before January 1, 1954, then the annuity starting date is January
1, 1954”.
Subsec. (g)(3). Pub.
L. 113-295, Div. A, Sec. 221(a)(14)(B), amended par.
(3) by striking “January 1, 1954, or” and “, whichever
is later”.
2012 - Subsec. (t)(2)(A). Pub. L. 112-141, Sec. 100121(c),
amended subpar. (A) by striking “or” at the end of clause
(vi), by substituting “, or” for the period at the end
of clause (vii), and by adding clause (viii).
2010 - Subsec. (a). Pub. L. 111-240, Sec. 2113(a),
amended subsec. (a). Before amendment, it read:
“(a) General Rule For Annuities.— Except
as otherwise provided in this chapter, gross income includes any
amount received as an annuity (whether for a period certain or during
one or more lives) under an annuity, endowment, or life insurance
contract.”
2008 - Subsec. (t)(2)(G)(iv). Pub. L. 110-458, Sec. 108(e),
amended clause (iv) by inserting “on or” before “before”
in the first sentence.
Subsec. (t)(2)(G)(iv). Pub. L. 110-245, Sec. 107(a),
amended clause (iv) by striking “, and before December 31,
2007” after “September 11, 2001”.
2006 - Subsec. (e)(11)-(12). Pub. L. 109-280, Sec. 844(a),
redesignated par. (11) as par. (12) and added par. (11).
Subsec. (t)(2)(G). Pub. L. 109-280, Sec. 827(a),
added subpar. (G).
Subsec. (t)(10). Pub. L. 109-280, Sec. 828(a),
added par. (10).
2004 - Subsec. (w). Pub. L. 108-357, Sec. 906(a),
redesignated subsec. (w) as subsec. (x) and added subsec. (w).
Subsec. (f). Pub. L. 108-311, Sec. 408(a)(4),
amended subsec. (f) by substituting “Economic Growth and Tax Relief
Reconciliation Act of 2001)” for “Economic Growth and Tax Relief Reconciliation
Act of 2001”.
Subsec. (t)(2)(D)(i)(III). Pub. L. 108-311, Sec. 207(6),
amended subclause (III) by inserting “, determined without regard
to subsections (b)(1), (b)(2), and (d)(1)(B) thereof” after “section
152”.
Subsec. (t)(7)(A)(iii). Pub. L. 108-311, Sec. 207(7),
amended clause (iii) by substituting “152(f)(1)” for “151(c)(3)”.
2001 - Subsec. (r)(2)(B)(i). Pub. L. 107-90, Sec. 204(e)(2),
amended clause (i) by substituting “3211(b)” for 3211(a)(2)”.
Subsec. (e)(9). Pub. 107-22, Sec. 1(b)(1)(A), amended
par. (9) by substituting “a Coverdell education savings” for “an education
individual retirement”.
Subsec. (e)(9). Pub. L. 107-22, Sec. 1(b)(3)(A),
amended the heading of par. (9) by substituting “Coverdell education
savings” for “education individual retirement”.
Subsec. (e)(9). Pub. L. 107-16, Sec. 402(a)(4)(A),
amended par. (9) by substituting “qualified tuition” for “qualified
State tuition”.
Subsec. (e)(9). Pub. L. 107-16, Sec. 402(a)(4)(B),
amended the heading of par. (9) by substituting “qualified tuition"
for “qualified State tuition”.
Subsec. (f). Pub. L. 107-16, Sec. 632(a)(3)(A),
amended subsec. (f) by substituting “section 403(b)(2)(D)(iii), as
in effect before the enactment of the Economic Growth and Tax Relief
Reconciliation Act of 2001” for “section 403(b)(2)(D)(iii))”.
Subsec. (o)(4). Pub. L. 107-16, Sec. 641(e)(1),
amended par. (4) by substituting “403(b)(8), 408(d)(3), and 457(e)(16)"
for “and 408(d)(3)”.
Subsec. (t)(9). Pub. L. 107-16, Sec. 641(a)(2)(C),
added par. (9).
1998 - Subsec. (e). Pub. L. 105-206, Sec. 6004(d)(3),
amended subsec. (e) by adding par. (9).
Subsec. (n). Pub.
L. 105-206, Sec. 6023(3), amended subsec. (n) by
inserting “(as in effect on the day before the date of the enactment
of the Small Business Job Protection Act of 1996)” after “section
101(b)(2)(D)”.
Subsec. (t)(2)(A). Pub. L. 105-206, Sec. 3436(a),
amended subpar. (A) by striking “or” at the end of clauses (iv) and
(v), by striking the period at the end of clause (vi) and inserting
“, or”, and by adding clause (vii).
Subsec. (t)(3)(A). Pub. L. 105-206, Sec. 6023(4),
6023(4), amended subpar. (A) by substituting “(A)(v)” for “(A)(v),”.
Subsec. (t)(8)(E). Pub. L. 105-206, Sec. 6005(c)(1),
amended subpar. (E) by substituting “120th day” for “120 days” and
by substituting “60th day” for “60 days”.
1997 - Subsec. (d)(1)(B)(iii). Pub. L. 105-34, Sec. 1075(b),
amended clause (iii) by adding the language after the heading and
before the table, and by striking “primary” from the table.
Subsec. (d)(1)(B)(iv). Pub. L. 105-34, Sec. 1075(a),
added clause (iv).
Subsec. (t)(2)(E). Pub. L. 105-34, Sec. 203(a),
added subpar. (D).
Subsec. (t)(2)(F). Pub. L. 105-34, Sec. 303(a),
added subpar. (E).
Subsec. (t)(7). Pub.
L. 105-34, Sec. 203(b), added par. (7).
Subsec. (t)(8). Pub.
L. 105-34, Sec. 303(b), added par. (8).
1996 - Subsec. (t)(3)(A). Pub. L. 104-191, Sec. 361(a),
struck “(B)”.
Subsec. (t)(2)(D). Pub. L. 104-191, Sec. 361(b),
added subpar. (D).
Subsec. (t)(2)(B). Pub. L. 104-191, Sec. 361(c),
substituted “, (C), or (D)” for “or (C)”.
Subsec. (b)(4)(A). Pub. L. 104-188, Sec. 1704(l)(1),
added “(determined without regard to subsection (c)(2))” after “contract”.
Subsec. (d). Pub.
L. 104-188, Sec. 1403(a), amended subsec. (d) to
read as above. Before amendment, subsec. (d) read as follows: “(d)
Treatment of employee contributions under defined contribution plans
as separate contracts.--For purposes of this section, employee contributions
(and any income allocable thereto) under a defined contribution plan
may be treated as a separate contract.”
Subsec. (f). Pub.
L. 104-188, Sec. 1463(a), added “, or to the extent
such credits are attributable to services performed as a foreign missionary
(within the meaning of section 403(b)(2)(D)(iii))” at the end of the
last sentence.
Subsec. (m)(2). Pub. L. 104-188, Sec. 1704(t)(2),
amended subsec. (m)(2) by adding “and” at the end of subparagraph
(A); struck subparagraph (B); and, redesignated subparagraph (C) as
subparagraph (B). Before amendment, subparagraph (B) read as follows:
“(B) the consideration for the contract contributed by the employee
for purposes of subsection (d)(1) (relating to employee's contributions
recoverable in 3 years) and subsection (e)(7) (relating to plans where
substantially all contributions are employee contributions), and”.
Subsec. (p)(4)(A). Pub. L. 104-188, Sec. 1704(t)(77),
amended clause (ii) of subsec. (p)(4)(A) to read as above. Before
amendment, clause (ii) of subsec. (p)(4)(A) read as follows:
“(ii) Special rules.—The
term “qualified employer plan"—
(I) shall include any plan which
was (or was determined to be) a qualified employer plan or a government
plan, but”
(II) shall not include a plan
described in subsection (e)(7).”
Subsec. (t)(6). Pub. L. 104-188, Sec. 1421(b)(4)(A),
added par. (6).
1991 - Subsec. (o)(4). Pub. L. 102-318, Section 521(b)(3) substituted
“sections 402(c)” for “sections 402(a)(5), 402(a)(7)”.
1990 - Subsec. (t)(2)(C),
(D). Pub. L. 101-508,
Sec. 11802(a)(1), (2), redesignated subpar. (D) as
(C) and struck out former subpar. (C) ‘Exceptions for distributions
from employee stock ownership plans’ which read as follows: ‘Any distribution
made before January 1, 1990, to an employee from an employee stock
ownership plan (as defined in section 4975(e)(7)) or a tax credit
employee stock ownership plan (as defined in section 409) if -
‘(i) such distribution is attributable
to assets which have been invested in employer securities (within
the meaning of section 409(l)) at all times during the 5-plan-year
period preceding the plan year in which the distribution is made,
and
‘(ii) at all times during such
period the requirements of sections 401(a)(28) and 409 (as in effect
at such times) are met with respect to such employer securities.”
Subsec. (t)(3)(A). Pub. L. 101-508, Sec. 11802(a)(3),
substituted ‘and (C)’ for ‘(C), and (D)’.
1989 - Subsec. (e)(11)(A). Pub. L. 101-239, Sec. 7815(a)(3),
(5), substituted ‘calendar year’ for ‘12-month period’ in cls. (i)
and (ii), and inserted at end ‘The preceding sentence shall not apply
to any contract described in paragraph (5)(D).’
Subsec. (q)(2)(B). Pub. L. 101-239, Sec. 7811(m)(4),
inserted an additional closing parenthesis after ‘subsection (s)(6)(B))’.
1988 - Subsec. (d). Pub. L. 100-647, Sec. 1011A(b)(2)(A),
added subsec. (d).
Subsec. (e)(4)(A). Pub. L. 100-647, Sec. 5012(d)(1),
inserted at end ‘The preceding sentence shall not apply for purposes
of determining investment in the contract, except that the investment
in the contract shall be increased by any amount included in gross
income by reason of the amount treated as received under the preceding
sentence.’
Subsec. (e)(5)(C). Pub. L. 100-647, Sec. 5012(a)(2),
substituted ‘Except as provided in paragraph (10) and except to the
extent’ for ‘Except to the extent’.
Subsec. (e)(5)(D). Pub. L. 100-647, Sec. 1011A(b)(9)(B),
substituted ‘paragraph (8)’ for ‘paragraphs (7) and (8)’.
Subsec. (e)(7). Pub. L. 100-647, Sec. 1011A(b)(9)(A),
struck out par. (7) which related to special rules for plans where
substantially all contributions are employee contributions.
Subsec. (e)(8)(A). Pub. L. 100-647, Sec. 1011A(b)(9)(C),
struck out ‘(other than paragraph (7))’ after ‘this subsection’.
Subsec. (e)(9). Pub. L. 100-647, Sec. 1011A(b)(2)(B),
struck out par. (9) which related to treatment of employee contributions
as separate contract.
Subsec. (e)(10). Pub. L. 100-647, Sec. 5012(a)(1),
added par. (10).
Subsec. (e)(11). Pub. L. 100-647, Sec. 5012(d)(2),
added par. (11).
Subsec. (f). Pub. L. 100-647, Sec. 1011A(b)(1)(A),
struck out ‘for purposes of subsections (d)(1) and (e)(7), the consideration
for the contract contributed by the employee,’ after ‘contract,’ in
introductory provisions.
Subsec. (n). Pub. L. 100-647, Sec. 1011A(b)(1)(B),
substituted ‘Subsection (b)’ for ‘Subsections (b) and (d)’.
Subsec. (o)(2). Pub. L. 100-647, Sec. 1011A(c)(8),
struck out par. (2) which related to additional tax if amount received
before age 59 1/2.
Subsec. (p)(3)(A). Pub. L. 100-647, Sec. 1011A(h)(1),
inserted ‘to which paragraph (1) does not apply by reason of paragraph
(2) during the period’ after ‘loan’.
Subsec. (p)(3)(B). Pub. L. 100-647, Sec. 1011A(h)(2),
substituted ‘Period’ for ‘Loans’ in heading and amended text generally.
Prior to amendment, text read as follows: ‘For purposes of subparagraph
(A), a loan is described in this subparagraph -
‘(i) if paragraph (1) does not
apply to such loan by reason of paragraph (2), and
‘(ii) if -
‘(I) such loan is made to a
key employee (as defined in section 416(i)), or
‘(II) such loan is secured by
amounts attributable to elective 401(k) or 403(b) deferrals (as defined
in section 402(g)(3)).’
Subsec. (q)(2)(B). Pub. L. 100-647, Sec. 1018(t)(1)(B),
substituted ‘subsection (s)(6)(B))’ for ‘subsection (s)(6)(B)))’.
Subsec. (q)(2)(D). Pub. L. 100-647, Sec. 1011A(c)(7),
inserted ‘designated’ before ‘beneficiary’.
Pub.
L. 100-647, Sec. 1011A(c)(4), 1018(u)(8), amended
subpar. (D) identically, substituting a comma for period at end.
Subsec. (q)(2)(E). Pub. L. 100-647, Sec. 1011A(b)(9)(D),
struck out ‘(determined without regard to subsection (e)(7))’ after
‘subsection (e)(5)(D)’.
Subsec. (q)(2)(G). Pub. L. 100-647, Sec. 1011A(c)(4),
substituted a comma for period at end.
Subsec. (q)(2)(H). Pub. L. 100-647, Sec. 1011A(c)(6),
added subpar. (H).
Subsec. (q)(3)(B). Pub. L. 100-647, Sec. 1011A(c)(5),
substituted ‘taxpayer’ for ‘employee’ in cls. (i) and (ii).
Subsec. (s)(5). Pub. L. 100-647, Sec. 1018(k)(2),
substituted ‘certain annuity contracts’ for ‘annuity contracts which
are part of qualified plans’ in heading.
Subsec. (s)(5)(D). Pub. L. 100-647, Sec. 1018(k)(1),
added subpar. (D).
Subsec. (s)(7). Pub. L. 100-647, Sec. 1018(t)(1)(A),
substituted ‘primary annuitant’ for ‘primary annuity’.
Subsec. (t)(2)(A)(iv). Pub. L. 100-647, Sec. 1011A(c)(7),
inserted ‘designated’ before ‘beneficiary’.
Subsec. (t)(2)(A)(v). Pub. L. 100-647, Sec. 1011A(c)(1),
struck out ‘on account of early retirement under the plan’ after ‘separation
from service’.
Subsec. (t)(2)(C). Pub. L. 100-647, Sec. 1011A(c)(2),
substituted ‘Exceptions for distributions from employee stock ownership
plans’ for ‘Certain plans’ in heading and amended text generally.
Prior to amendment, text read as follows:
‘(i) In general. - Except as provided in clause
(ii), any distribution made before January 1, 1990, to an employee
from an employee stock ownership plan defined in section 4975(e)(7)
to the extent that, on average, a majority of assets in the plan have
been invested in employer securities (as defined in section 409(l))
for the 5-plan-year period preceding the plan year in which the distribution
is made.
‘(ii) Benefits distributed must be invested in
employer securities for 5 years. - Clause (i) shall not apply to any
distribution which is attributable to assets which have not been invested
in employer securities at all times during the period referred to
in clause (i).’
Subsec. (t)(3)(A). Pub. L. 100-647, Sec. 1011A(c)(3),
substituted ‘(C), and (D)’ for ‘and (C)’.
Subsec. (u)(1)(A). Pub. L. 100-647, Sec. 1011A(i)(1),
inserted ‘(other than subchapter L)’ after ‘subtitle’.
Subsec. (u)(3)(D). Pub. L. 100-647, Sec. 1011A(i)(3),
substituted ‘is purchased’ for ‘which is purchased’ and ‘is held’
for ‘which is held’.
Pub.
L. 100-647, Sec. 1011A(i)(2), substituted ‘until
all amounts under such contract are distributed to the employee for
whom such contract was purchased or the employee's beneficiary' for
‘until such time as the employee separates from service’.
Subsec. (u)(3)(E). Pub. L. 100-647, Sec. 1011A(i)(3),
substituted ‘is’ for ‘which is’.
Subsec. (u)(4)(C). Pub. L. 100-647, Sec. 1011A(i)(4),
added subpar. (C).
Subsecs. (v), (w). Pub. L. 100-647, Sec. 5012(b)(1),
added subsec. (v) and redesignated former subsec. (v) as (w).
1986 - Subsec. (b). Pub. L. 99-514, Sec. 1122(c)(2),
amended subsec. (b) generally. Prior to amendment, subsec. (b) read
as follows: ‘Gross income does not include that part of any amount
received as an annuity under an annuity, endowment, or life insurance
contract which bears the same ratio to such amount as the investment
in the contract (as of the annuity starting date) bears to the expected
return under the contract (as of such date). This subsection shall
not apply to any amount to which subsection (d)(1) (relating to certain
employee annuities) applies.’
Subsec. (d). Pub. L. 99-514, Sec. 1122(c)(1),
struck out subsec. (d) which related to employee's annuities where
the employee's contributions were recoverable in 3 years.
Subsec. (e)(4)(C). Pub. L. 99-514, Sec. 1826(b)(3),
added subpar. (C).
Subsec. (e)(5)(D). Pub. L. 99-514, Sec. 1122(c)(3)(B),
substituted ‘paragraphs (7) and (8)’ for ‘paragraph (7)’ in introductory
provisions.
Pub.
L. 99-514, Sec. 1854(b)(1), inserted closing provisions
which read as follows: ‘Any dividend described in section 404(k) which
is received by a participant or beneficiary shall, for purposes of
this subparagraph, be treated as paid under a separate contract to
which clause (ii)(I) applies.’
Subsec. (e)(7)(B). Pub. L. 99-514, Sec. 1852(c)(1),
in introductory provisions substituted ‘any plan or contract’ for
‘any trust or contract’, in cl. (ii) substituted ‘85 percent or more
of’ for ‘85 percent of’, and inserted closing provision: ‘For purposes
of clause (ii), deductible employee contributions (as defined in subsection
(o)(5)(A)) shall not be taken into account.’
Subsec. (e)(8), (9). Pub. L. 99-514, Sec. 1122(c)(3)(A),
added pars. (8) and (9).
Subsec. (f). Pub. L. 99-514, Sec. 1852(c)(3),
in introductory provisions, substituted ‘subsections (d)(1) and (e)(7)’
for ‘subsection (d)(1)’ and ‘subsection (e)(6)’ for ‘subsection (e)(1)(B)’.
Subsec. (m)(2)(B). Pub. L. 99-514, Sec. 1852(c)(4)(A),
inserted ‘and subsection (e)(7) (relating to plans where substantially
all contributions are employee contributions)’.
Subsec. (m)(2)(C). Pub. L. 99-514, Sec. 1852(c)(4)(B),
substituted ‘subsection (e)(6)’ for ‘subsection (e)(1)(B)’.
Subsec. (m)(5). Pub. L. 99-514, Sec. 1852(a)(2)(C),
which directed that par. (5) be amended by substituting ‘5-percent
owners’ for ‘owner-employees’ in heading, was executed by substituting
‘5-percent owners’ for ‘key employees’, to reflect the probable intent
of Congress and intervening amendment by section 713(c)(1)(B) of Pub. L. 98-369.
Subsec. (m)(5)(A). Pub. L. 99-514, Sec. 1123(d)(1),
amended subpar. (A) generally. Prior to amendment, subpar. (A) read
as follows: ‘This subparagraph shall apply -
‘(i) to amounts which -
‘(I) are received from a qualified
trust described in section 401(a) or under a plan described in section
403(a), and
‘(II) are received by a 5-percent
owner before such owner attains the age of 59 1/2 years, for any reason
other than such owner becoming disabled (within the meaning of paragraph
(7) of this section), and
‘(ii) to amounts which are received
from a qualified trust described in section 401(a) or under a plan
described in section 403(a) at any time by a 5-percent owner, or by
the successor of such owner, but only to the extent that such amounts
are determined (under regulations prescribed by the Secretary) to
exceed the benefits provided for such individual under the plan formula.
Clause (i) shall not apply to any amount received
by an individual in his capacity as a policyholder of an annuity,
endowment, or life insurance contract which is in the nature of a
dividend or similar distribution and clause (i) shall not apply to
amounts attributable to benefits accrued before January 1, 1985.'
Pub.
L. 99-514, Sec. 1852(a)(2)(A), amended subpar. (A)
generally. Prior to amendment, subpar. (A) read as follows: ‘This
paragraph shall apply -
‘(i) to amounts (other than
any amount received by an individual in his capacity as a policyholder
of an annuity, endowment, or life insurance contract which is in the
nature of a dividend or similar distribution) which are received from
a qualified trust described in section 401(a) or under a plan described
in section 403(a) and which are received by an individual, who is,
or has been, a 5-percent owner, before such individual attains the
age of 59 1/2 years, for any reason other than the individual's becoming
disabled (within the meaning of paragraph (7) of this subsection),
but only to the extent that such amounts are attributable to contributions
paid on behalf of such individual (other than contributions made by
him as a 5-percent owner) while he was a 5-percent owner, and
‘(ii) to amounts which are received
from a qualified trust described in section 401(a) or under a plan
described in section 403(a) at any time by an individual who is, or
has been, a 5-percent owner or by the successor of such individual,
but only to the extent that such amounts are determined, under regulations
prescribed by the Secretary, to exceed the benefits provided for such
individual under the plan formula.’
Subsec. (m)(5)(C). Pub. L. 99-514, Sec. 1852(a)(2)(B),
amended subpar. (C) generally. Prior to amendment, subpar. (C) read
as follows: ‘For purposes of this paragraph, the term ‘5 percent owner’
have the same meanings as when used in section 416.'
Subsec. (m)(10). Pub. L. 99-514, Sec. 1898(c)(1)(B),
inserted ‘who is the spouse or former spouse of the participant’.
Subsec. (o)(5). Pub. L. 99-514, Sec. 1101(b)(2)(C),
inserted ‘and made for a taxable year beginning before January 1,
1987,’ in subpar. (A), substituted ‘subsection (p)(3)(A)(i)’ for ‘section
219(e)(3)’ in subpar. (C), and substituted ‘subsection (p)(3)(B)’
for ‘section 219(e)(4)’ in subpar. (D).
Subsec. (p)(2)(A)(i). Pub. L. 99-514, Sec. 1134(a),
amended cl. (i) generally. Prior to amendment, cl. (i) read as follows:
‘$50,000, or’.
Subsec. (p)(2)(B)(ii). Pub. L. 99-514, Sec. 1134(d),
amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows:
‘Clause (i) shall not apply to any loan used to acquire, construct,
reconstruct, or substantially rehabilitate any dwelling unit which
within a reasonable time is to be used (determined at the time the
loan is made) as a principal residence of the participant or a member
of the family (within the meaning of section 267(c)(4)) of the participant.’
Subsec. (p)(2)(C), (D). Pub. L. 99-514, Sec. 1134(b),
added subpar. (C) and redesignated former subpar. (C) as (D).
Subsec. (p)(3). Pub. L. 99-514, Sec. 1134(c),
added par. (3) and redesignated former par. (3) as (4).
Pub.
L. 99-514, Sec. 1101(b)(2)(B), amended par. (3) generally.
Prior to amendment, par. (3) read as follows: ‘For purposes of this
subsection, the term ‘qualified employer plan’ means any plan which
was (or was determined to be) a qualified employer plan (as defined
in section 219(e)(3) other than a plan described in subsection (e)(7)).
For purposes of this subsection, such term includes any government
plan (as defined in section 219(e)(4)).'
Subsec. (p)(4), (5). Pub. L. 99-514, Sec. 1134(c),
redesignated former pars. (3) and (4) as (4) and 5, respectively.
Subsec. (q). Pub. L. 99-514, Sec. 1123(b)(1)(B),
substituted ‘10-percent’ for ‘5-percent’ in heading.
Subsec. (q)(1). Pub. L. 99-514, Sec. 1123(b)(1)(A),
substituted ‘10 percent’ for ‘5 percent’.
Subsec. (q)(2). Pub. L. 99-514, Sec. 1123(b)(3),
substituted ‘Paragraph (1)’ for ‘This subsection’ in introductory
provisions.
Subsec. (q)(2)(B). Pub. L. 99-514, Sec. 1826(c),
amended subpar. (B) generally. Prior to amendment, subpar. (B) read
as follows: ‘made to a beneficiary (or to the estate of an annuitant)
on or after the death of an annuitant,’.
Subsec. (q)(2)(D). Pub. L. 99-514, Sec. 1123(b)(2),
amended subpar. (D) generally. Prior to amendment, subpar. (D) read
as follows: ‘which is one of a series of substantially equal periodic
payments made for the life of a taxpayer or over a period extending
for at least 60 months after the annuity starting date,’.
Subsec. (q)(2)(E). Pub. L. 99-514, Sec. 1852(c)(2),
inserted ‘(determined without regard to subsection (e)(7))’.
Subsec. (q)(2)(G). Pub. L. 99-514, Sec. 1826(d),
added subpar. (C).
Subsec. (q)(2)(I), (J). Pub. L. 99-514, Sec. 1123(b)(4),
which added subpars. (I) and (J) directed the amendment of subpar.
(G) by striking out ‘or’ at the end thereof, and of subpar. (H) by
striking out the period at the end thereof, could not be executed
to subpars. (G) and (H) because subpar. (G) does not contain ‘or’,
and no subpar. (H) was enacted.
Subsec. (q)(3). Pub. L. 99-514, Sec. 1123(b)(3),
added par. (3).
Subsec. (s)(1). Pub. L. 99-514, Sec. 1826(b)(2),
substituted ‘any holder of such contract’ for ‘the holder of such
contract’ in subpars. (A) and (B).
Subsec. (s)(5). Pub. L. 99-514, Sec. 1826(a),
added par. (5).
Subsec. (s)(6), (7). Pub. L. 99-514, Sec. 1826(b)(1),
added pars. (6) and (7).
Subsec. (t). Pub.
L. 99-514, Sec. 1123(a), added subsec. (t) and redesignated
former subsec. (t) as (u).
Subsecs. (u), (v). Pub. L. 99-514, Sec. 1135(a),
added subsec. (u) and redesignated former subsec. (u) as (v).
1984 - Subsec. (e)(5)(D). Pub. L. 98-369, Sec. 523(b)(1),
substituted ‘Except as provided in paragraph (7), this’ for ‘This’.
Subsec. (e)(5)(D)(ii)(IV). Pub. L. 98-369, Sec. 211(b)(1),
which directed substitution of ‘section 818(a)(3)’ for ‘805(d)(3)’
in subpar. (D)(i)(IV), was executed to subpar. (D)(ii)(IV) to reflect
the probable intent of Congress.
Subsec. (e)(7). Pub.
L. 98-369, Sec. 523(a), added par. (7).
Subsec. (k). Pub.
L. 98-369, Sec. 421(b)(1), repealed subsec. (k) relating
to payments in discharge of alimony.
Subsec. (m)(5). Pub. L. 98-369, Sec. 713(c)(1)(B),
substituted ‘key employees’ for ‘owner-employees’ in heading.
Subsec. (m)(5)(A). Pub. L. 98-369, Sec. 521(d)(1),
(2), substituted ‘5-percent owner’ for ‘key employee’ wherever appearing
and struck out ‘in a top-heavy plan’ at end of cl. (i).
Pub.
L. 98-369, Sec. 713(c)(1)(A), substituted ‘as a key
employee’ for ‘as an owner-employee’ in cl. (i).
Subsec. (m)(5)(C). Pub. L. 98-369, Sec. 521(d)(3),
substituted ‘the term ‘5 percent owner’ ‘ for ‘the terms ‘key employee’
and ‘top-heavy plan’ ‘.
Subsec. (m)(9). Pub. L. 98-369, Sec. 713(d)(1),
repealed par. (9) relating to return of excess contributions before
due date of return.
Subsec. (m)(10). Pub. L. 98-397, Sec. 204(c)(2),
added par. (10).
Subsec. (o)(1). Pub. L. 98-369, Sec. 491(d)(3),
substituted ‘402 and 403’ for ‘402, 403, and 405’.
Subsec. (o)(3)(A). Pub. L. 98-369, Sec. 713(b)(1)(A),
inserted ‘(other than the exception contained in paragraph (2) thereof)’.
Subsec. (o)(4). Pub. L. 98-369, Sec. 491(d)(4),
substituted ‘and 408(d)(3)’ for ‘408(d)(3), and 409(b)(3)(C)’.
Subsec. (p)(2)(A). Pub. L. 98-369, Sec. 713(b)(1)(B),
inserted at end ‘For purposes of clause (ii), the present value of
the nonforfeitable accrued benefit shall be determined without regard
to any accumulated deductible employee contributions (as defined in
subsection (o)(5)(B)).’
Subsec. (p)(2)(A)(ii). Pub. L. 98-369, Sec. 713(b)(4),
substituted as cl. (ii) ‘the greater of (I) one-half of the present
value of the nonforfeitable accrued benefit of the employee under
the plan, or (II) $10,000’ for ‘ 1/2 of the present value of the nonforfeitable
accrued benefit of the employee under the plan (but not less than
$10,000)’.
Subsec. (p)(3). Pub. L. 98-369, Sec. 523(b)(2),
inserted ‘other than a plan described in subsection (e)(7)’.
Subsec. (q)(1). Pub.
L. 98-369, Sec. 222(a), amended par. (1) generally,
striking out designation ‘(A) In general. - ‘ preceding text, substituting
‘which is includible in gross income’ for ‘includible in gross income
which is properly allocable to any investment in the annuity contract
made during the 10-year period ending on the date such amount was
received by the taxpayer’, and striking out former subpar. (B), which
had provided that for purposes of subpar. (A), the amount includible
in gross income would be allocated to the earliest investment in the
contract with respect to which amounts had not been previously fully
allocated under this par.
Subsecs. (s), (t). Pub. L. 98-369, Sec. 222(b),
added subsec. (s) and redesignated former subsec. (s) as (t).
1983 - Subsec. (o)(2)(A). Pub. L. 97-448, Sec. 103(c)(6),
struck out ‘to which the employee made one or more deductible employee
contributions’ after ‘from a qualified employer plan or government
plan’.
Subsec. (p)(3). Pub. L. 97-448, Sec. 103(c)(3)(B)(i),
struck out ‘without regard to subparagraph (D) thereof’ after ‘as
defined in section 219(e)(3)’.
Pub. L.
97-448, Sec. 103(d)(3), amended paragraph (1) of
sec. 312(f) of Pub. L. 97-34,
struck out “plans which include employees within the meaning of section
401(c)(1) with respect to”.
Pub.
L. 97-448, Sec. 306(a)(11), added paragraph (3) to
sec. 236(c) of Pub. L. 97-248.
Subsecs. (r), (s). Pub.
L. 98-76 added subsec. (r) and redesignated former
subsec. (r) as (s).
1982 - Subsec. (e). Pub. L. 97-248, Sec. 265(a),
in par. (1) substituted provisions relating to the application of
this subsection to amounts received under annuity, endowment, or life
insurance contracts which are not received as annuities and to amounts
received as dividends for provisions which stated a general rule relating
to the includability as gross income of amounts that were received
under annuity, endowment, or life insurance contracts which were not
received as annuities and also stated that for the purposes of this
section amounts which were received as dividends would be treated
as amounts not received as an annuity, in par. (2) substituted provisions
stating a general rule as to the includability as gross income of
amounts received before or after the annuity starting date for provisions
which set out those amounts which would be treated as amounts not
received as an annuity, and added pars. (3) to (6).
Subsec. (m)(4). Pub. L. 97-248, Sec. 236(b)(1),
struck out par. (4) which related to amounts constructively received
with respect to assignments or pledges, and loans on contracts.
Subsec. (m)(5). Pub. L. 97-248, Sec. 237(d)(1),
(2), in subpar. (A) substituted applicability to key employees for
applicability to owner-employees and added subpar. (C).
Subsec. (m)(6). Pub. L. 97-248, Sec. 237(d)(3),
struck out ‘except in applying paragraph (5),’ after ‘shall’.
Subsec. (m)(8). Pub. L. 97-248, Sec. 236(b)(1),
struck out par. (8) which related to loans to owner-employees.
Subsec. (o)(3)(A). Pub. L. 97-248, Sec. 236(b)(2),
substituted reference to subsec. (p) of this section for references
to subsec. (m)(4) and (8) of this section.
Subsec. (p). Pub.
L. 97-248, Sec. 236(a), added subsec. (p). Former
subsec. (p) redesignated (q).
Subsec. (q). Pub.
L. 97-248, Sec. 265(b)(1), added subsec. (q). Former
subsec. (q) redesignated (r).
Pub. L. 97-248,
Sec. 236(a), redesignated former subsec. (p) as (q).
Subsec. (r). Pub.
L. 97-248, Sec. 236(a), 265(b)(1), redesignated former
subsec. (p) as (r).
1981 - Subsec. (m)(6). Pub. L. 97-34, Sec. 312(d)(1),
expanded definition of ‘owner-employee’ to include an employee within
the meaning of section 401(c)(1) except in applying paragraph (5).
Subsec. (m)(8). Pub. L. 97-34, Sec. 312(d)(2),
added par. (8).
Subsec. (m)(9). Pub. L. 97-34, Sec. 312(e)(1),
added par. (9).
Subsecs. (o), (p). Pub. L. 97-34, Sec. 311(b)(1),
added subsec. (o) and redesignated former subsec. (o) as (p).
1976 - Subsec. (c)(2), (3)(A). Pub. L. 94-455, Sec. 1906(b)(13)(A),
struck out ‘or his delegate’ after ‘Secretary’.
Subsec. (d)(1). Pub. L. 94-455, Sec. 1901(a)(12),
struck out in subpar. (B) ‘(whether or not before January 1, 1954)’
after ‘beginning on the date’, and in provisions following subpar.
(B) struck out ‘(under this paragraph and prior income tax laws)’
after ‘until there has been so excluded’.
Subsec. (f). Pub. L. 94-455, Sec. 1906(b)(13)(A),
struck out ‘or his delegate’ after ‘Secretary’.
Subsec. (i). Pub. L. 94-455, Sec. 1951(b)(1)(A),
struck out subsec. (i) which related to joint annuities where first
annuitant died in 1951, 1952, or 1953.
Subsec. (m)(2), (3). Pub. L. 94-455, Sec. 1906(b)(13)(A),
struck out ‘or his delegate’ after ‘Secretary’.
Subsec. (m)(4)(A). Pub. L. 94-455, Sec. 1901(a)(13),
substituted ‘an individual retirement account’ for ‘an individual
retirement amount’.
Subsec. (m)(5)(A)(ii), (7). Pub. L. 94-455, Sec. 1906(b)(13)(A),
struck out ‘or his delegate’ after ‘Secretary’.
1974 - Subsec. (m)(1). Pub. L. 93-406, Sec. 2001(h)(2),
struck out par. (1) which related to certain amounts received before
annuity starting date.
Subsec. (m)(4)(A). Pub. L. 93-406, Sec. 2002(g)(10)(A),
inserted references to an individual retirement amount described in
section 408(a) and an individual retirement annuity described in section
408(b).
Subsec. (m)(5)(A). Pub. L. 93-406, Sec. 2001(e)(5),
(h)(3), substituted ‘(other than contributions made by him as an owner-employee)’
for ‘(whether or not paid by him)’ in cl. (i), and struck out cl.
(iii) which had made reference to amounts which were received, by
an individual who was or had been, an owner-employee, by reason of
the distribution under the provisions of section 401(e)(2)(E) of his
entire interest in all qualified trusts described in section 401(a)
and in all plans described in section 403(a).
Subsec. (m)(5)(B). Pub. L. 93-406, Sec. 2001(g)(1),
substituted provisions that if a person receives an amount to which
subsec. (m)(5) applies, his tax under this chapter for the taxable
year in which such amount is received shall be increased by an amount
equal to 10 percent of the portion of the amount so received which
is includible in his gross income for such taxable year for provisions
that if the aggregate amounts to which subsec. (m)(5) applied received
by any person in his taxable year equalled or exceeded $2,500, the
increase in his tax for the taxable year in which such amounts were
received and attributable to such amounts could not be less than 110
percent of the aggregate increase in taxes, for the taxable year and
the 4 immediately preceding taxable years, which would have resulted
if such amounts had been included in such person's gross income ratably
over such taxable years, with provision for alternate computation
if deductions had been allowed under section 404 for contributions
paid for a number of prior taxable years less than 4.
Subsec. (m)(5)(C) to (E). Pub. L. 93-406, Sec. 2001(g)(2)(A),
struck out subpars. (C) to (E) which contained special rules for the
application of subsec. (m)(5).
Subsec. (m)(6). Pub. L. 93-406, Sec. 2002(g)(10)(B),
inserted reference to an individual for whose benefit an individual
retirement account or annuity described in section 408(a) or (b) is
maintained.
Subsec. (n). Pub. L. 93-406, Sec. 2005(c)(3),
2007(b)(2), redesignated former subsec. (o) as (n) and in heading
of subsec. (n) as so redesignated inserted reference to survivor benefit
plan. Former subsec. (n), which set out provisions covering the treatment
to be accorded total distributions, was struck out.
Subsec. (o). Pub. L. 93-406, Sec. 2005(c)(3),
redesignated former subsec. (p) as (o). Former subsec. (o) redesignated
(n) and amended.
Subsec. (p). Pub. L. 93-406, Sec. 2005(c)(3),
redesignated subsec. (p) as (o).
1969 - Subsec. (n)(1). Pub. L. 91-172, Sec. 515(b)(1),
altered section to accommodate the insertion into sections 402 and
403 of provisions under which employer contributions to qualified
pension, profit sharing, stock bonus, and annuity plans for plan years
beginning after 1969 are to be treated as ordinary income when received
in a lump sum distribution, but with such amounts to be eligible for
a special averaging procedure.
Subsec. (n)(4). Pub. L. 91-172, Sec. 515(b)(2),
added par. (4).
1966 - Subsecs. (o), (p). Pub. L. 89-365 added subsec. (o)
and redesignated former subsec. (o) as (p).
1965 - Subsec. (m)(5)(A)(i). Pub. L. 89-97, Sec. 106(d)(2)(A),
substituted ‘paragraph (7) of this subsection’ for ‘section 213(g)(3)’.
Subsec. (m)(7). Pub. L. 89-97, Sec. 106(d)(2)(B),
added par. (7).
Subsec. (n)(1). Pub. L. 89-97, Sec. 106(d)(2)(C),
substituted in subpars. (A)(iii) and (B)(iii) ‘subsection (m)(7)’
for ‘section 213(g)(3)’.
Subsec. (n)(3). Pub. L. 89-44, Sec. 809(d)(2),
substituted ‘sections 31 and 39’ for ‘section 31’ in sentence following
subpar. (B).
1964 - Subsec. (e)(3). Pub. L. 88-272, Sec. 232(b),
struck out par. (3) which provided for a limit on the tax attributable
to the receipt of a lump sum.
1962 - Pub. L. 87-792, Sec. 4, redesignated
sec. (p) to (o).
Subsec. (d)(2). Pub.
L. 87-792, Sec. 4(a), designated existing provisions
as cl. (A) and added cl. (B).
Subsec. (f). Pub.
L. 87-834, Sec. 11(b), inserted sentence providing
that par. (2) shall not apply to amounts which were contributed by
the employer after Dec. 31, 1962, and which would not have been includible
in the gross income of the employee by reason of the application of
Section 911 if such amounts had been paid directly to the employee
at the time of contribution, and making such sentence inapplicable
to amounts which were contributed by the employer, as determined under
regulations, to provide pension or annuity credits, to the extent
such credits are attributable to services performed before Jan. 1,
1963, and are provided pursuant to pension or annuity plan provisions
in existence on Mar. 12, 1962, and on that date applicable to such
services.
Subsecs. (m) to (o). Pub. L. 87-792, Sec. 4(b), added
subsecs. (m) and (n) and redesignated former subsec. (m) as (o).
EFFECTIVE DATE OF 2022
AMENDMENTS
Amendment by Pub. L. 117-328, Div. T, Sec. 115(a), applicable
to distributions made after December 31, 2023. Sec. 115(b) of Pub. L. 117-328, Div. T, provided:
“CROSS-REFERENCE.—See
section 311 of this Act for amendment to section 72(t)(2)(H)(v)(I)
of the Internal Revenue Code of 1986 limiting repayment of distribution
to 3 years.”
Amendment by Pub. L. 117-328, Div. T, Sec. 127(e)(2)-(3),
applicable to plan years beginning after December 31, 2023.
Amendment by Pub. L. 117-328, Div. T, Sec. 308, effective
for distributions made after the date of the enactment of this Act
[Enacted: Dec. 29, 2022].
Amendment by Pub. L. 117-328, Div. T, Sec. 311(a),
is generally applicable to distributions made after the date of enactment
of this Act [Enacted: Dec. 29, 2022].
Pub.
L. 117-328, Div. T, Sec. 311(b), provided the following
temporary rule:
TEMPORARY RULE WITH RESPECT
TO DISTRIBUTIONS ALREADY MADE.—In the case of a qualified birth
or adoption distribution (as defined in section 72(t)(2)(H)(iii)(I)
of the Internal Revenue Code of 1986) made on or before the date of
the enactment of this Act, section 72(t)(2)(H)(v)(I) of such Code
(as amended by this Act) shall apply to such distribution by substituting ‘‘after
such distribution and before January 1, 2026’’ for ‘‘during
the 3-year period beginning on the day after the date on which such
distribution was received’’.
Amendment by Pub. L. 117-328, Div. T, Sec. 314(a),
applicable to distributions made after December 31, 2023.
Amendment by Pub. L. 117-328, Div. T, Sec. 323(a), (b),
effective for transfers, rollovers, and exchanges occurring after
December 31, 2023.
Amendment by Pub. L. 117-328, Div. T, Sec. 323(d), effective
for distributions commencing on or after the date of the enactment
of this Act [Enacted: Dec. 29, 2022].
Pub.
L. 117-328, Div. T, Sec. 323(e)(3) provided: “NO INFERENCE.—Nothing
in the amendments made by this section shall be construed to create
an inference with respect to the law in effect prior to the effective
date of such amendments.”
Amendments by Sec. 326(a), Pub. L. 117-328, Div. T, Sec. 326, effective
for distributions made after the date of the enactment of this Act
[Enacted: Dec. 29, 2022].
Amendment by Pub. L. 117-328, Div. T, Sec. 329, effective
for distributions made after the date of the enactment of this Act
[Enacted: Dec. 29, 2022].
Amendment by Pub. L. 117-328, Div. T, Sec. 330, effective
for distributions made after the date of the enactment of this Act
[Enacted: Dec. 29, 2022].
Amendments by Pub. L. 117-328, Div. T, Sec. 331(a), applicable
to distributions with respect to disasters the incident period (as
defined in section 72(t)(11)(F)(ii) of the Internal Revenue Code of
1986, as added by this subsection) for which begins on or after the
date which is 30 days after the date of the enactment of the Taxpayer
Certainty and Disaster Tax Relief Act of 2020 [Enacted: Dec. 27, 2020].
Amendment by Pub. L. 117-328, Div. T, Sec. 331(b)(1),
applicable to recontributions of withdrawals for home purchases with
respect to disasters the incident period (as defined in section 72(t)(11)(F)(ii)
of the Internal Revenue Code of 1986, as added by this subsection)
for which begins on or after the date which is 30 days after the date
of the enactment of the Taxpayer Certainty and Disaster Tax Relief
Act of 2020. [Enacted: Dec. 27, 2020]
Amendment by Pub. L. 117-328, Div. T, Sec. 331(c)(1),
applicable to plan loans made with respect to disasters the incident
period (as defined in section 72(t)(11)(F)(ii) of the Internal Revenue
Code of 1986, as added by this subsection) for which begins on or
after the date which is 30 days after the date of the enactment of
the Taxpayer Certainty and Disaster Tax Relief Act of 2020. [Enacted:
Dec. 27, 2020]
Amendments by Pub. L. 117-328, Div. T, Sec. 332, applicable
to plan years beginning after Dec. 31, 2023.
Amendments by Pub. L. 117-328, Div. T, Sec. 332(b), applicable
to plan years beginning after Dec. 31, 2023.
Amendment by Pub. L. 117-328, Div. T, Sec. 333(a)(3),
applicable to any determination of, or affecting, liability for taxes,
interest, or penalties which is made on or after the date of the enactment
of this Act, without regard to whether the act (or failure to act)
upon which the determination is based occurred before such date of
enactment. Notwithstanding the preceding sentence, nothing in the
amendments made by this section shall be construed to create an inference
with respect to the law in effect prior to the effective date of
such amendments [Enacted: Dec. 29, 2022].
Amendment by Pub. L. 117-328 Div. T, Sec. 334(c), applicable
to distributions made after the date which is 3 years after the date
of the enactment of this Act [Enacted: Dec. 29, 2022]. Note: DISCLOSURE
TO TREASURY OF LONG-TERM CARE INSURANCE PRODUCTS.
Amendment by Pub. L. 117-328, Div. T, Sec. 401, shall
take effect as if included in the section of the Setting Every Community
Up for Retirement Enhancement of 2019 to which the amendment relates
[Pub. L. 116-94, Enacted: Dec. 20. 2019].
EFFECTIVE DATE OF 2019 AMENDMENTS
Amendment by Pub. L. 116-94,
Div. O, Sec. 108(a), effective for loans made after the date of the
enactment of this Act [Enacted: Dec. 20, 2019].
Amendment by Pub. L. 116-94,
Div. O, Sec. 113(a), effective for distributions made after December
31, 2019.
EFFECTIVE DATE OF 2015
AMENDMENTS
Amendments by Pub. L. 114-113 Div. Q, Sec. 308(a),
effective for distributions after December 31, 2015.
Amendments
by Pub. L. 114-27, Sec. 2, effective
for distributions after December 31, 2015.
EFFECTIVE
DATE OF 2014 AMENDMENTS
Amendments by Pub.
L. 113-295, Div. A, Sec. 221(a)(14), effective on
the date of the enactment of this Act [Enacted: Dec. 19, 2014].
Section
221(b)(2) of Pub. L. 113-295,
Div. A, provided the following Savings Provision:
“(2)
SAVINGS PROVISION.—If—
“(A)
any provision amended or repealed by the amendments made by this section
applied to—
“(i)
any transaction occurring before the date of the enactment of this
Act [Enacted: Dec. 19, 2014],
“(ii)
any property acquired before such date of enactment, or
“(iii)
any item of income, loss, deduction, or credit taken into account
before such date of enactment, and
“(B)
the treatment of such transaction, property, or item under such provision
would (without regard to the amendments or repeals made by this section)
affect the liability for tax for periods ending after date of enactment,
nothing in the amendments or repeals made by this section shall be
construed to affect the treatment of such transaction, property, or
item for purposes of determining liability for tax for periods ending
after such date of enactment.”
EFFECTIVE
DATE OF 2012 AMENDMENT
Amendment
by Sec. 100121(c) of Pub. L. 112-141 effective
on the date of the enactment of this Act [Enacted: July 6, 2012].
EFFECTIVE
DATE OF 2010 AMENDMENT
Amendment
by Sec. 2113(a) of Pub. L. 111-240 effective
for amounts received in taxable years beginning after December 31,
2010.
EFFECTIVE
DATE OF 2008 AMENDMENT
Amendment
by Sec. 108(e) of Pub. L. 110-458 effective
as if included in the provisions of the Pension Protection Act of
2006 [Pub. L. 109-280, Sec. 827]
to which it relates.
Amendment by Sec. 107(a) of Pub. L. 110-245 effective for individuals
ordered or called to active duty on or after December 31, 2007.
EFFECTIVE
DATE OF 2006 AMENDMENTS
Amendment
by Sec. 827(a) of Pub. L. 109-280 applicable
to distributions after September 11, 2001. Sec. 827(c)(2) of Pub. L. 109-280 provided the following
special rule:
“(2) WAIVER OF LIMITATIONS- If refund or credit
of any overpayment of tax resulting from the amendments made by this
section is prevented at any time before the close of the 1-year period
beginning on the date of the enactment of this Act by the operation
of any law or rule of law (including res judicata), such refund or
credit may nevertheless be made or allowed if claim therefor is filed
before the close of such period.”
Amendment by Sec. 828(a) of Pub. L. 109-280 applicable to distributions
after the date of the enactment of this Act [Enacted: Aug. 17, 2006].
Amendments by Sec. 844(a) of Pub. L. 109-280 applicable to contracts
issued after December 31, 1996, but only with respect to taxable years
beginning after December 31, 2009.
EFFECTIVE DATE OF 2004 AMENDMENTS
Amendments by Sec. 906(a) of Pub. L. 108-357 applicable to distributions
on or after the date of the enactment of this Act [Enacted: Oct. 22,
2004].
Amendments by Sec. 207 of Pub. L. 108-311 applicable to taxable
years beginning after December 31, 2004.
Amendment by Sec. 408(a)(4) of Pub. L. 108-311 applicable on the
date of the enactment of this Act [Enacted: Oct. 4, 2004].
EFFECTIVE DATE OF 2001 AMENDMENTS
Amendment by Sec. 204(e)(1) of Pub. L. 107-90 applicable to calendar
years beginning after December 31, 2001.
Amendments by Sec. 1 of Pub. L. 107-22 applicable on the
enactment date of this Act [Enacted: July 26, 2001].
Amendments by Sec. 402(a) of Pub. L. 107-16 applicable to taxable
years beginning after December 31, 2001.
Amendments by Sec. 632(a) of Pub. L. 107-16 applicable to years
beginning after December 31, 2001.
Amendments by Sec. 641 of Pub. L. 107-16 applicable to distributions
after December 31, 2001.
Section 901 (Sunset of Provisions of Act) of Pub. L. 107-16, as amended by Pub. L. 107-358 and Pub. L. 111-312, Sec. 101(a),
provided that:
“(a) IN GENERAL.—All provisions of, and amendments
made by, this Act shall not apply—
“(1) to taxable, plan, or limitation
years beginning after December 31, 2012, or
“(2) in the case of title V,
to estates of decedents dying, gifts made, or generation skipping
transfers, after December 31, 2012.
“(b) APPLICATION OF CERTAIN LAWS.—The Internal
Revenue Code of 1986 and the Employee Retirement Income Security Act
of 1974 shall be applied and administered to years, estates, gifts,
and transfers described in subsection (a) as if the provisions and
amendments described in subsection (a) had never been enacted.
“(c) EXCEPTION.-Subsection (a) shall not apply
to section 803 (relating to no federal income tax on restitution received
by victims of the Nazi regime or their heirs or estates).”
PENSIONS AND INDIVIDUAL RETIREMENT ARRANGEMENT
PROVISIONS OF ECONOMIC GROWTH AND TAX RELIEF RECONCILIATION ACT OF
2001 MADE PERMANENT
Section 811 of Pub.
L. 109-280 provided that:
“Title IX of the Economic Growth and Tax Relief
Reconciliation Act of 2001 [Pub. L.
107-16] shall not apply to the provisions of, and
amendments made by, subtitles A through F [Sections 601-666] of title
VI of such Act (relating to pension and individual retirement arrangement
provisions).”
PERMANENT EXTENSION OF MODIFICATIONS TO QUALIFIED
TUITION PROGRAMS
Section 1304(a) of Pub.
L. 109-280 provided that:
“Section 901 of the Economic Growth and Tax Relief
Reconciliation Act of 2001 [Pub. L.
107-16] (relating to sunset provisions) shall not
apply to section 402 of such Act (relating to modifications to qualified
tuition programs).”
EFFECTIVE DATE OF 1998 AMENDMENTS
Amendments by Sec. 3436(a) of Pub. L. 105-206 applicable distributions
after December 31, 1999.
Amendment by Sec. 6004(d)(3)(B) of Pub. L. 105-206 applicable as if
included in the provisions of the Taxpayer Relief Act of 1997 to which
it relates [Effective Date of Pub.
L. 105-34, Sec. 213: Taxable years beginning after
December 31, 1997].
Amendment by Sec. 6005(c)(1) of Pub. L. 105-206 applicable as if
included in the provisions of the Taxpayer Relief Act of 1997 to which
it relates [Effective Date of Pub.
L. 105-34, Sec. 303: Payments and distributions in
taxable years beginning after December 31, 1997].
Amendments by Sec. 6023 of Pub. L. 105-206 applicable on the
date of the enactment of this Act [Enactment Date: July 22, 1998].
EFFECTIVE DATE OF 1997 AMENDMENTS
Amendments by Sec. 203 of Pub. L. 105-34 applicable to distributions
after December 31, 1997, with respect to expenses paid after such
date (in taxable years ending after such date), for education furnished
in academic periods beginning after such date.
Amendments by Sec. 303 of Pub. L. 105-34 applicable to payments
and distributions in taxable years beginning after December 31, 1997.
Amendments by Sec. 1075 of Pub. L. 105-34 applicable with respect
to annuity starting dates beginning after December 31, 1997.
EFFECTIVE DATE OF 1996 AMENDMENTS
Amendment by Pub.
L. 104-191, Sec. 361, effective for distributions
after December 31, 1996.
Sec. 1403 of Pub.
L. 104-188, provided that: “The amendment made by
this section shall apply in cases where the annuity starting date
is after the 90th day after the date of the enactment of this Act
[August 20, 1996].”
Sec. 1421 of Pub.
L. 104-188 provided that: “The amendments made by
this section shall apply to taxable years beginning after December
31, 1996.”
Sec. 1463(b) of Pub.
L. 104-188 provided that: “The amendment made by
this section shall apply to taxable years beginning after December
31, 1996.”
EFFECTIVE DATE OF 1992 AMENDMENT
Amendment by Section 521(b)(3) of Pub. L. 102-318, applicable to distributions
after December 31, 1992.
EFFECTIVE DATE OF 1989 AMENDMENT
Amendment by Pub.
L. 101-239 effective, except as otherwise provided,
as if included in the provision of the Technical and Miscellaneous
Revenue Act of 1988, Pub. L. 100-647,
to which such amendment relates, see section 7817 of Pub. L. 101-239, set out as a note
under section 1 of this title.
EFFECTIVE DATE OF 1988 AMENDMENT
Amendment by sections 1011A(b)(1)(A), (B), (2),
(9), (c)(1)-(8), (h), (i), and 1018(k), (t)(1)(A), (B), and (u)(8)
of Pub. L. 100-647 effective,
except as otherwise provided, as if included in the provision of the
Tax Reform Act of 1986, Pub. L. 99-514,
to which such amendment relates, see section 1019(a) of Pub. L. 100-647, set out as a note
under section 1 of this title.
Amendment by section 5012(a), (b)(1), (d) of Pub. L. 100-647 applicable to contracts
entered into on or after June 21, 1988, with special rule where death
benefit increases by more than $150,000, certain other material changes
taken into account, certain exchanges permitted, and special rule
in the case of annuity contracts, see section 5012(e) of Pub. L. 100-647, set out as an Effective
Date note under section 7702A of this title.
EFFECTIVE DATE OF 1986 AMENDMENT
Section 1101(c) of Pub.
L. 99-514 provided that: ‘The amendments made by
this section (amending this section and section 219 of this title)
shall apply to contributions for taxable years beginning after December
31, 1986.’
Amendment by section 1122(c)(1) of Pub. L. 99-514 applicable to individuals
whose annuity starting date is after July 1, 1986, amendment by section
1122(c)(2) of Pub. L. 99-514 applicable
to individuals whose annuity starting date is after Dec. 31, 1986,
and amendment by section 1122(c)(3) of Pub.
L. 99-514 applicable to amounts received after July
1, 1986, in the case of any plan not described in section 72(e)(8)(D)
of this title, see section 1122(h)(2) of Pub.
L. 99-514, set out as a note under section 402 of
this title.
Section 1123(e) of Pub.
L. 99-514, as amended by Pub. L. 100-647, title I, Sec. 1011A(c)(11),
(12), Nov. 10, 1988, 102 Stat. 3476, provided that:
‘(1) In general. - Except as otherwise provided
in this subsection, the amendments made by this section (amending
this section and sections 403 and 408 of this title) shall apply to
taxable years beginning after December 31, 1986.
‘(2) Subsection (c). - The amendments made by subsection
(c) (amending section 403 of this title) shall apply to years beginning
after December 31, 1988, but only with respect to distributions from
contracts described in section 403(b)
of the Internal Revenue Codeof 1986 which are attributable
to assets other than assets held as of the close of the last year
beginning before January 1, 1989.
‘(3) Exception where distribution commences. -
The amendments made by this section shall not apply to distributions
to any employee from a plan maintained by any employer if -
‘(A) as of March 1, 1986, the
employee separated from service with the employer,
‘(B) as of March 1, 1986, the
accrued benefit of the employee was in pay status pursuant to a written
election providing a specific schedule for the distribution of the
entire accrued benefit of the employee, and
‘(C) such distribution is made
pursuant to such written election.
‘(4) Transition rule. - The amendments made by
this section shall not apply with respect to any benefits with respect
to which a designation is in effect under section 242(b)(2) of the
Tax Equity and Fiscal Responsibility Act of 1982 (section 242(b)(2)
of Pub. L. 97-248,
formerly set out as an Effective Date of 1982 Amendment note under
section 401 of this title).
‘(5) Special rule for distributions under an annuity
contract. - The amendments made by paragraphs (1), (2), and (3) of
subsection (b) (amending this section) shall not apply to any distribution
under an annuity contract if -
‘(A) as of March 1, 1986, payments
were being made under such contract pursuant to a written election
providing a specific schedule for the distribution of the taxpayer's
interest in such contract, and
‘(B) such distribution is made
pursuant to such written election.’
Section 1134(e) of Pub.
L. 99-514 provided that: ‘The amendments made by
this section (amending this section) shall apply to loans made, renewed,
renegotiated, modified, or extended after December 31, 1986.’
Section 1135(b) of Pub.
L. 99-514 provided that: ‘The amendment made by subsection
(a) (amending this section) shall apply to contributions to annuity
contracts after February 28, 1986.’
Amendment by sections 1826(a), (d), 1852(a)(2),
(c)(1)-(4), and 1854(b)(1) of Pub.
L. 99-514 effective, except as otherwise provided,
as if included in the provisions of the Tax Reform Act of 1984, Pub. L. 98-369, div. A, to which
such amendment relates, see section 1881 of Pub. L. 99-514, set out as a note
under section 48 of this title.
Section 1826(b)(4) of Pub.
L. 99-514 provided that: ‘The amendments made by
this subsection (amending this section) shall apply to contracts issued
after the date which is 6 months after the date of the enactment of
this Act (Oct. 22, 1986) in taxable years ending after such date.’
Section 1826(c) of Pub.
L. 99-514, as amended by Pub. L. 100-647, title I, Sec. 1018(t)(1)(D),
Nov. 10, 1988, 102 Stat. 3587, provided that the amendment made by
section 1826(c) of Pub. L. 99-514 is
effective with respect to distributions commencing after the date
6 months after Oct. 22, 1986.
Section 1854(b)(6) of Pub.
L. 99-514 provided that: ‘The amendments made by
paragraphs (1) and (2) (amending this section and section 404 of this
title) shall not apply to dividends paid before January 1, 1986, if
the taxpayer treated such dividends in a manner inconsistent with
such amendments on a return filed with the Secretary before the date
of the enactment of this Act (Oct. 22, 1986).’
Section 1898(c)(1)(C) of Pub. L. 99-514 provided that: ‘The
amendments made by this paragraph (amending this section and section
402 of this title) shall apply to payments made after the date of
the enactment of this Act (Oct. 22, 1986).’
EFFECTIVE DATE OF 1984 AMENDMENTS
Amendment by Pub.
L. 98-397 effective Jan. 1, 1985, except as otherwise
provided, see section 303(d) of Pub.
L. 98-397, set out as a note under section 1001 of
Title 29, Labor.
Amendment by section 211(b)(1) of Pub. L. 98-369 applicable to taxable
years beginning after Dec. 31, 1983, see section 215 of Pub. L. 98-369, set out as an Effective
Date note under section 801 of this title.
Section 222(c) of Pub.
L. 98-369, as amended by Pub. L. 99-514, Sec. 2, Oct. 22,
1986, 100 Stat. 2095, provided:
‘(1) In general. - The amendments made by this
section (amending this section) shall apply to contracts issued after
the day which is 6 months after the date of the enactment of this
Act (July 18, 1984) in taxable years ending after such date.
‘(2) Transitional rules for contracts issued before
effective date. - In the case of any contract (other than a single
premium contract) which is issued on or before the day which is 6
months after the date of the enactment of this Act, for purposes of section 72(q)(1)(A) of the Internal Revenue
Code of 1986 (formerly I.R.C.
1954) (as in effect on the day before the date of
the enactment of this Act), any investment in such contract which
is made during any calendar year shall be treated as having been made
on January 1 of such calendar year.'
Amendment by section 421(b)(1) of Pub. L. 98-369 applicable to transfers
after July 18, 1984, in taxable years ending after such date, subject
to election to have repeal apply to transfers after 1983 or to transfers
pursuant to existing decrees, see section 421(d) of Pub. L. 98-369, set out as an Effective
Date note under section 1041 of this title.
Amendment by section 491(d)(3), (4) of Pub. L. 98-369 applicable to obligations
issued after Dec. 31, 1983, see section 491(f)(1) of Pub. L. 98-369, set out as a note
under section 62 of this title.
Amendment by section 521(d) of Pub. L. 98-369 applicable to years
beginning after Dec. 31, 1984, see section 521(e) of Pub. L. 98-369, set out as a note
under section 401 of this title.
Section 523(c) of Pub.
L. 98-369 provided that: ‘The amendments made by
this section (amending this section) shall apply to any amount received
or loan made after the 90th day after the date of enactment of this
Act (July 18, 1984).’
Amendment by section 713(b)(1), (4), (c)(1)(A),
(B) of Pub. L. 98-369 effective
as if included in the provision of the Tax Equity and Fiscal Responsibility
Act of 1982, Pub. L. 97-248,
to which such amendment relates, see section 715 of Pub. L. 98-369, set out as a note
under section 31 of this title.
Section 713(d)(1) of Pub.
L. 98-369, as amended by Pub.
L. 99-514, title XVIII, Sec. 1875(c)(5), Oct. 22,
1986, 100 Stat. 2895, provided that the amendment made by section
713(d)(1) of Pub. L. 98-369 is
effective with respect to contributions made in taxable years beginning
after Dec. 31, 1983.
EFFECTIVE DATE OF 1983 AMENDMENTS
Section 227(b) of Pub.
L. 98-76, as amended by Pub. L. 99-514, Sec. 2, Oct. 22,
1986, 100 Stat. 2095, provided that:
‘(1) In general. - Except as provided in paragraph
(2), the amendments made by section 224 (enacting section 6050G of
this title, amending this section and section 86 of this title, and
enacting provisions set out as a note under section 231n of Title
45, Railroads) shall apply to benefits received after December 31,
1983, in taxable years ending after such date.
‘(2) Treatment of certain lump-sum payments received
after december 31, 1983. - The amendments made by section 224 shall
not apply to any portion of a lump-sum payment received after December
31, 1983, if the generally applicable payment date for such portion
was before January 1, 1984.
‘(3) No fresh start. - For purposes of determining
whether any benefit received after December 31, 1983, is includible
in gross income by reason of section
72(r) of the Internal Revenue Code of 1986 (formerly I.R.C. 1954), as added by this
Act, the amendments made by section 224 be treated as having been
in effect during all periods before 1984.'
Section 103(c)(3)(B)(ii) of Pub. L. 97-448 provided that: ‘The
amendment made by clause (i) (amending this section) shall take effect
as if the matter struck out had never been included in such paragraph.’
Amendment by title I of Pub. L. 97-448 effective, except
as otherwise provided, as if it had been included in the provision
of the Economic Recovery Tax Act of 1981, Pub.
L. 97-34, to which such amendment relates, see section
109 of Pub. L. 97-448,
set out as a note under section 1 of this title.
EFFECTIVE DATE OF 1982 AMENDMENT
Section 236(c) of Pub.
L. 97-248, as amended by Pub.
L. 97-448, title III, Sec. 306(a)(11), Jan. 12, 1983,
96 Stat. 2404; Pub. L. 98-369,
div. A, title V, Sec. 554, title VII, Sec. 713(b)(2), July 18, 1984,
98 Stat. 897, 957; Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
‘(1) In general. - The amendments made by this
section (amending this section) shall apply to loans, assignments,
and pledges made after August 13, 1982. For purposes of the preceding
sentence, the outstanding balance of any loan which is renegotiated,
extended, renewed, or revised after such date shall be treated as
an amount received as a loan on the date of such renegotiation, extension,
renewal, or revision.
‘(2) Exception for certain loans used to repay
outstanding obligations. -
‘(A) In general. - Any qualified
refunding loan shall not be treated as a distribution by reason of
the amendments made by this section to the extent such loan is repaid
before August 14, 1983.
‘(B) Qualified refunding loan.
- For purposes of subparagraph (A), the term ‘qualified refunding
loan’ means any loan made after August 13, 1982, and before August
14, 1983, to the extent such loan is used to make a required principal
payment.
‘(C) Required principal payment.
- For purposes of subparagraph (B), the term ‘required principal payment’
means any principal repayment on a loan made under the plan which
was outstanding on August 13, 1982, if such repayment is required
to be made after August 13, 1982, and before August 14, 1983 or if
such loan was payable on demand.
‘(D) Special rule for non-key
employees. - In the case of a non-key employee (within the meaning
of section 416(i)(2) of the Internal
Revenue Code of 1986 (formerly I.R.C. 1954)), this paragraph
shall be applied by substituting ‘January 1, 1985’ for ‘August 14,
1983’ each place it appears.
‘(3) Treatment of certain renegotiations. - If
-
‘(A) the taxpayer after August
13, 1982, and before September 4, 1982, borrows money from a government
plan (as defined in section 219(e)(4)
of the Internal Revenue Codeof 1986),
‘(B) under the applicable State
law, such loan requires the renegotiation of all outstanding prior
loans made to the taxpayer under such plan, and
‘(C) the renegotiation described
in subparagraph (B) does not change the interest rate on, or extend
the duration of, any such outstanding prior loan, then the renegotiation
described in subparagraph (B) shall not be treated as a renegotiation,
extension, renewal, or revision for purposes of paragraph (1). If
the renegotiation described in subparagraph (B) does not meet the
requirements of subparagraph (C) solely because it extends the duration
of any such outstanding prior loan, the requirements of subparagraph
(C) shall be treated as met with respect to such renegotiation if,
before April 1, 1983, such extension is eliminated.’
Section 265(c) of Pub.
L. 97-248 provided that:
‘(1) Subsection (a). - The amendments made by subsection
(a) (amending this section) shall take effect on August 13, 1982.
‘(2) Subsection (b). - The amendments made by subsection
(b) (amending this section and sections 46, 50A, 53, 901, 1302, and
1304 of this title) shall apply to distributions after December 31,
1982.’
Amendment by section 237(d) of Pub. L. 97-248 applicable to years
beginning after Dec. 31, 1983, see section 241 of Pub. L. 97-248, set out as an Effective
Date note under section 416 of this title.
EFFECTIVE DATE OF 1981 AMENDMENT
Section 312(f) of Pub.
L. 97-34, as amended by Pub.
L. 97-448, title I, Sec. 103(d)(3), 96 Stat. 2378,
provided that:
‘(1) In general. - Except as provided in paragraph
(2), the amendments made by this section (amending this section and
sections 219, 401, 404, 408, 1379, and 4972 of this title) shall apply
to taxable years beginning after December 31, 1981.
‘(2) Transitional rule. - The amendments made by
subsection (d) (amending this section) shall not apply to any loan
from a plan to a self-employed individual who is an employee within
the meaning of section 401(c)(1) which is outstanding on December
31, 1981. For purposes of the preceding sentence, any loan which is
renegotiated, extended, renewed, or revised after such date shall
be treated as a new loan.’
EFFECTIVE DATE OF 1976 AMENDMENT
Amendment by section 1901(a)(12), (13) of Pub. L. 94-455 applicable with respect
to taxable years beginning after Dec. 31, 1976, see section 1901(d)
of Pub. L. 94-455,
set out as a note under section 2 of this title.
Section 1951(d) of Pub.
L. 94-455 provided that: ‘Except as otherwise expressly
provided, the amendments made by this section (see Tables for classification
of section 1951 of Pub. L. 94-455)
shall apply with respect to taxable years beginning after December
31, 1976.'
EFFECTIVE DATE OF 1974 AMENDMENT
Amendment by section 2001(e)(5) of Pub. L. 93-406 applicable to contributions
made in taxable years beginning after Dec. 31, 1975, see section 2001(i)(4)
of Pub. L. 93-406,
set out as a note under section 401 of this title.
Section 2001(i)(5), (6) of Pub. L. 93-406 provided that:
‘(5) The amendments made by
subsection (g) (amending this section and sections 46, 50A, 56, 404,
and 901 of this title) apply to distributions made in taxable years
beginning after December 31, 1975.
‘(6) The amendments made by
subsection (h) (amending this section and section 401 of this title)
apply to taxable years ending after the date of enactment of this
Act (Sept. 2, 1974).’
Amendment by section 2002(g)(10) of Pub. L. 93-406 effective on Jan.
1, 1975, see section 2002(i)(2) of Pub.
L. 93-406, set out as an Effective Date note under
section 4973 of this title.
Amendment by section 2005(c)(3) of Pub. L. 93-406, applicable only with
respect to distributions or payments made after Dec. 31, 1973, in
taxable years beginning after Dec. 31, 1973, see section 2005(d) of Pub. L. 93-406, set out as a note
under section 402 of this title.
Amendment by section 2007(b)(2) of Pub. L. 93-406 applicable to taxable
years ending on or after Sept. 21, 1972, see section 2007(c) of Pub. L. 93-406, set out as a note
under section 122 of this title.
EFFECTIVE DATE OF 1969 AMENDMENT
Amendment by Pub.
L. 91-172 applicable to taxable years ending after
Dec. 31, 1969, see section 515(d) of Pub.
L. 91-172, set out as a note under section 402 of
this title.
EFFECTIVE DATE OF 1966 AMENDMENT
Amendment by Pub.
L. 89-365 applicable with respect to taxable years
ending after Dec. 31, 1965, see section 1(d) of Pub. L. 89-365, set out as an Effective
Date note under section 122 of this title.
EFFECTIVE DATE OF 1965 AMENDMENTS
Amendment by Pub.
L. 89-97 applicable to taxable years beginning after
Dec. 31, 1966, see section 106(e) of Pub.
L. 89-97, set out as a note under section 213 of
this title.
Amendment by Pub.
L. 89-44 applicable to taxable years beginning on
or after July 1, 1965, see section 809(f) of Pub. L. 89-44, set out as a note under
section 6420 of this title.
EFFECTIVE DATE OF 1964 AMENDMENT
Amendment by Pub.
L. 88-272 applicable to taxable years beginning after
Dec. 31, 1963, see section 232(g) of Pub.
L. 88-272, set out as a note under section 5 of this
title.
EFFECTIVE DATE OF 1962 AMENDMENTS
Section 11(c)(2) of Pub.
L. 87-834 provided that: ‘The amendment made by subsection
(b) (amending this section) shall apply to taxable years ending after
December 31, 1962.’
Amendment by Pub.
L. 87-792 applicable to taxable years beginning after
Dec. 31, 1962, see section 8 of Pub.
L. 87-792, set out as a note under section 22 of
this title.
GAO REPORT
Sec. 331(d) of Pub. L. 117-328, Div. T, provided:
“GAO REPORT.—The
Comptroller General of the United States shall submit a report to
the Committees on Finance and Health, Education, Labor and Pensions
of the Senate and the Committees on Ways and Means and Education and
Labor of the House of Representatives on taxpayer utilization of the
retirement disaster relief permitted by the amendments made by this
section and or permitted by prior legislation, including a comparison
of utilization by higher and lower income taxpayers and whether the
$22,000 threshold on distributions provides adequate relief for taxpayers
who suffer from a disaster.”
DISCLOSURE TO TREASURY
OF LONG-TERM CARE INSURANCE PRODUCTS
Subsec. (f) of Pub. L. 117-328, Div. T, provided: (f)
DISCLOSURE TO TREASURY OF LONG-TERM CARE INSURANCE PRODUCTS.—The
Secretary of the Treasury (or the Secretary's delegate) shall
issue such forms and guidance as are necessary to collect the filing
required by section 401(a)(39)(E)(iii) of the Internal Revenue Code
of 1986, as added by this section.”
SPECIAL DISASTER-RELATED RULES FOR USE OF RETIREMENT
FUNDS
Section 302 of Pub. L.
116-260, Div. EE, provided:
“SEC. 302. SPECIAL DISASTER-RELATED RULES
FOR USE OF RETIREMENT FUNDS
“(a) TAX-FAVORED WITHDRAWALS FROM RETIREMENT
PLANS.—
“(1) IN GENERAL.—Section 72(t) of the Internal Revenue Code of
1986 shall not apply to any qualified disaster distribution.
“(2) AGGREGATE DOLLAR LIMITATION.—
“(A) IN GENERAL.—For purposes of this
subsection, the aggregate amount of distributions received by an individual
which may be treated as qualified disaster distributions for any taxable
year shall not exceed the excess (if any) of—
“(i) $100,000, over
“(ii) the aggregate amounts treated as qualified
disaster distributions received by such individual for all prior taxable
years.
“(B) TREATMENT OF PLAN DISTRIBUTIONS.—If
a distribution to an individual would (without regard to subparagraph
(A)) be a qualified disaster distribution, a plan shall not be treated
as violating any requirement of the Internal Revenue Code of 1986
merely because the plan treats such distribution as a qualified disaster
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) to such individual exceeds $100,000.
“(C) CONTROLLED GROUP.—For purposes
of subparagraph (B), the term ‘‘controlled group’’
means any group treated as a single employer under subsection (b), (c), (m),
or (o) of section 414 of the Internal
Revenue Code of 1986.
“(D) SPECIAL RULE FOR INDIVIDUALS AFFECTED
BY MORE THAN ONE DISASTER.—The limitation of subparagraph (A)
shall be applied separately with respect to distributions made with
respect to each qualified disaster.
“(3) AMOUNT DISTRIBUTED MAY BE REPAID.—
“(A) IN GENERAL.—Any individual who
receives a qualified disaster distribution may, at any time during
the 3-year period beginning on the day after the date on which such
distribution was received, make 1 or more contributions in an aggregate
amount not to exceed the amount of such distribution to an 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), of the Internal Revenue
Code of 1986, as the case may be.
“(B) TREATMENT OF REPAYMENTS OF DISTRIBUTIONS
FROM ELIGIBLE RETIREMENT PLANS OTHER THAN IRAS.—For purposes
of the Internal Revenue Code of 1986, if a contribution is made pursuant
to subparagraph (A) with respect to a qualified disaster distribution
from an 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 the qualified disaster
distribution in an eligible rollover distribution (as defined in section
402(c)(4) of such Code) and as having transferred the amount to the
eligible retirement plan in a direct trustee to trustee transfer with
in 60 days of the distribution.
“(C) TREATMENT OF REPAYMENTS OF DISTRIBUTIONS
FROM IRAS.—For purposes of the Internal Revenue Code of 1986,
if a contribution is made pursuant to subparagraph (A) with respect
to a qualified disaster distribution from an individual retirement
plan (as defined by section 7701(a)(37) of such Code), then, to the
extent of the amount of the contribution, the qualified disaster distribution
shall be treated as a distribution described in section 408(d)(3)
of such Code and as having been transferred to the eligible retirement
plan in a direct trustee to trustee transfer within 60 days of the
distribution.
“(4) DEFINITIONS.—For purposes of this
subsection—
“(A) QUALIFIED DISASTER DISTRIBUTION.—Except
as provided in paragraph (2), the term ‘qualified disaster distribution’
means any distribution from an eligible retirement plan made—
“(i) on or after the first day of the incident
period of a qualified disaster and before the date which is 180 days
after the date of the enactment of this Act, and
“(ii) to an individual whose principal place
of abode at any time during the incident period of such qualified
disaster is located in the qualified disaster area with respect to
such qualified disaster and who has sustained an economic loss by
reason of such qualified disaster.
“(B) ELIGIBLE RETIREMENT PLAN.—The
term ‘eligible retirement plan’ shall have the meaning
given such term by section 402(c)(8)(B)
of the Internal Revenue Code of 1986.
“(5) INCOME INCLUSION SPREAD OVER 3-YEAR
PERIOD.—
“(A) IN GENERAL.—In the case of any
qualified disaster distribution, unless the taxpayer elects not to
have this paragraph apply for any taxable year, any amount required
to be included in gross income for such taxable year shall be so included
ratably over the 3-taxable year period beginning with such taxable
year.
“(B) SPECIAL RULE.—For purposes of
subparagraph (A), rules similar to the rules of subparagraph (E) of section 408A(d)(3)
of the Internal Revenue Code of 1986 shall apply.
“(6) SPECIAL RULES.—
“(A) EXEMPTION OF DISTRIBUTIONS FROM TRUSTEE
TO TRUSTEE TRANSFER AND WITHHOLDING RULES.—For purposes of sections 401(a)(31), 402(f), and 3405
of the Internal Revenue Code of 1986, qualified disaster
distributions shall not be treated as eligible rollover distributions.
“(B) QUALIFIED DISASTER DISTRIBUTIONS TREATED
AS MEETING PLAN DISTRIBUTION REQUIREMENTS.—For purposes of the
Internal Revenue Code of 1986, a qualified disaster distribution shall
be treated as meeting the requirements of sections 401(k)(2)(B)(i),
403(b)(7)(A)(i), 403(b)(11), and 457(d)(1)(A) of such Code and section
8433(h)(1) of title 5, United States Code, and, in the case of a money
purchase pension plan, a qualified disaster distribution which is
an in-service withdrawal shall be treated as meeting the distribution
rules of section 401(a) of such Code.
“(b) RECONTRIBUTIONS OF WITHDRAWALS FOR HOME
PURCHASES.—
“(1) RECONTRIBUTIONS.—
“(A) IN GENERAL.—Any individual who
received a qualified distribution may, during the applicable period,
make 1 or more contributions in an aggregate amount not to exceed
the amount of such qualified distribution to an eligible retirement
plan (as defined in section 402(c)(8)(B)
of the Internal Revenue Code of 1986) 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), or 408(d)(3), of such Code, as the
case may be.
“(B) TREATMENT OF REPAYMENTS.—Rules
similar to the rules of subparagraphs (B) and (C) of subsection (a)(3)
shall apply for purposes of this subsection.
“(2) QUALIFIED DISTRIBUTION.—For purposes
of this subsection, the term ‘qualified distribution’
means any distribution—
“(A) described in section 401(k)(2)(B)(i)(IV), 403(b)(7)(A)(i)(V), 403(b)(11)(B), or 72(t)(2)(F), of the Internal Revenue
Code of 1986,
“(B) which was to be used to purchase or
construct a principal residence in a qualified disaster area, but
which was not so used on account of the qualified disaster with respect
to such area, and
“(C) which was received during the period
beginning on the date which is 180 days before the first day of the
incident period of such qualified disaster and ending on the date
which is 30 days after the last day of such incident period.
“(3) APPLICABLE PERIOD.—For purposes
of this subsection, the term ‘applicable period’ means,
in the case of a principal residence in a qualified disaster area
with respect to any qualified disaster, the period beginning on the
first day of the incident period of such qualified disaster and ending
on the date which is 180 days after the date of the enactment of this
Act.
“(c) LOANS FROM QUALIFIED PLANS.—
“(1) INCREASE IN LIMIT ON LOANS NOT TREATED
AS DISTRIBUTIONS.—In the case of any loan from a qualified employer
plan (as defined under
“section
72(p)(4) of the Internal Revenue Code of 1986) to a qualified
individual made during the 180-day period beginning on the date of
the enactment of this Act—
“(A) clause (i) of section 72(p)(2)(A) of such Code shall
be applied by substituting ‘$100,000’ for ‘$50,000’,
and
“(B) clause (ii) of such section shall be
applied by substituting ‘the present value of the nonforfeitable
accrued benefit of the employee under the plan’ for ‘one-half
of the present value of the nonforfeitable accrued benefit of the
employee under the plan’.
“(2) DELAY OF REPAYMENT.—In the case
of a qualified individual (with respect to any qualified disaster)
with an outstanding loan (on or after the first day of the incident
period of such qualified disaster) from a qualified employer plan
(as defined in section 72(p)(4) of
the Internal Revenue Code of 1986)—
“(A) if the due date pursuant to subparagraph (B) or (C) of section 72(p)(2) of such
Code for any repayment with respect to such loan occurs during the
period beginning on the first day of the incident period of such qualified
disaster and ending on the date which is 180 days after the last day
of such incident period, such due date shall be delayed for 1 year
(or, if later, until the date which is 180 days after the date of
the enactment of this Act),
“(B) any subsequent repayments with respect
to any such loan shall be appropriately adjusted to reflect the delay
in the due date under subparagraph (A) and any interest accruing during
such delay, and
“(C) in determining the 5-year period and
the term of a loan under subparagraph
(B) or (C) of section
72(p)(2) of such Code, the period described in subparagraph
(A) of this paragraph shall be disregarded.
“(3) QUALIFIED INDIVIDUAL.—For purposes
of this subsection, the term ‘qualified individual’ means
any individual—
“(A) whose principal place of abode at any
time during the incident period of any qualified disaster is located
in the qualified disaster area with respect to such qualified disaster,
and
“(B) who has sustained an economic loss by
reason of such qualified disaster.
“(d) PROVISIONS RELATING TO PLAN AMENDMENTS.—
“(1) IN GENERAL.—If this subsection
applies to any amendment to any plan or annuity contract, such plan
or contract shall be treated as being operated in accordance with
the terms of the plan during the period described in paragraph (2)(B)(i).
“(2) AMENDMENTS TO WHICH SUBSECTION APPLIES.—
“(A) IN GENERAL.—This subsection shall
apply to any amendment to any plan or annuity contract which is made—
“(i) pursuant to any provision of this section,
or pursuant to any regulation issued by the Secretary or the Secretary
of Labor under any provision of this section, and
“(ii) on or before the last day of the first
plan year beginning on or after January 1, 2022, or such later date
as the Secretary may prescribe.
“In the case of a governmental plan (as defined
in section 414(d) of the Internal Revenue
Code of 1986), clause (ii) shall be applied by substituting
the date which is 2 years after the date otherwise applied under clause
(ii).
“(B) CONDITIONS.—This subsection shall
not apply to any amendment unless—
“(i) during the period—
“(I) beginning on the date that this section
or the regulation described in subparagraph (A)(i) takes effect (or
in the case of a plan or contract amendment not required by this section
or such regulation, the effective date specified by the plan), and
“(II) ending on the date described in subparagraph
(A)(ii) (or, if earlier, the date the plan or contract amendment is
adopted), the plan or contract is operated as if such plan or contract
amendment were in effect, and
“(ii) such plan or contract amendment applies
retroactively for such period.”
SEC. 2202. SPECIAL RULES FOR USE OF RETIREMENT
FUNDS.
Section 2202(a), (b) of Pub.
L. 116-136 provided:
“(a) TAX-FAVORED WITHDRAWALS FROM RETIREMENT
PLANS.—
“(1) IN GENERAL.—Section 72(t) of the Internal Revenue Code of
1986 shall not apply to any coronavirus-related distribution.
“(2) AGGREGATE DOLLAR LIMITATION.—
“(A) IN GENERAL.—For purposes of this
subsection, the aggregate amount of distributions received by an individual
which may be treated as coronavirus-related distributions for any
taxable year shall not exceed $100,000.
“(B) TREATMENT OF PLAN DISTRIBUTIONS.—
If a distribution to an individual would (without regard to subparagraph
(A)) be a coronavirus-related distribution, a plan shall not be treated
as violating any requirement of the Internal Revenue Code of 1986
merely because the plan treats such distribution as a coronavirus-related
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) to such individual exceeds $100,000.
“(C) CONTROLLED GROUP.—For purposes
of subparagraph (B), the term ‘‘controlled group’’
means any group treated as a single employer under subsection (b),
(c), (m), or (o) of section 414 of the
Internal Revenue Code of 1986.
“(3) AMOUNT DISTRIBUTED MAY BE REPAID.—
“(A) IN GENERAL.—Any individual who
receives a coronavirus-related distribution may, at any time during
the 3-year period beginning on the day after the date on which such
distribution was received, make 1 or more contributions in an aggregate
amount not to exceed the amount of such distribution to an 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), of the Internal
Revenue Code of 1986, as the case may be.
“(B) TREATMENT OF REPAYMENTS OF DISTRIBUTIONS
FROM ELIGIBLE RETIREMENT PLANS OTHER THAN IRAS.—For purposes
of the Internal Revenue Code of 1986, if a contribution is made pursuant
to subparagraph (A) with respect to a coronavirus-related distribution
from an 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 the coronavirus-related
distribution in an eligible rollover distribution (as defined in section
402(c)(4) of such Code) and as having transferred the amount to the
eligible retirement plan in a direct trustee to trustee transfer within
60 days of the distribution.
“(C) TREATMENT OF REPAYMENTS OF DISTRIBUTIONS
FROM IRAS.—For purposes of the Internal Revenue Code of 1986,
if a contribution is made pursuant to subparagraph (A) with respect
to a coronavirus-related distribution from an individual retirement
plan (as defined by section 7701(a)(37) of such Code), then, to the
extent of the amount of the contribution, the coronavirus-related
distribution shall be treated as a distribution described in section
408(d)(3) of such Code and as having been transferred to the eligible
retirement plan in a direct trustee to trustee transfer within 60
days of the distribution.
“(4) DEFINITIONS.—For purposes of this
subsection—
“(A) CORONAVIRUS-RELATED DISTRIBUTION.—
Except as provided in paragraph (2), the term ‘‘coronavirus-related
distribution’’ means any distribution from an eligible
retirement plan made—
“(i) on or after January 1, 2020, and before
December 31, 2020,
“(ii) to an individual—
“(I) who is diagnosed with the virus SARS-CoV-2
or with coronavirus disease 2019 (COVID-19) by a test approved by
the Centers for Disease Control and Prevention,
“(II) whose spouse or dependent (as defined
in section 152 of the Internal Revenue
Code of 1986) is diagnosed with such virus or disease by
such a test, or
“(III) who experiences adverse financial
consequences as a result of being quarantined, being furloughed or
laid off or having work hours reduced due to such virus or disease,
being unable to work due to lack of child care due to such virus or
disease, closing or reducing hours of a business owned or operated
by the individual due to such virus or disease, or other factors as
determined by the Secretary of the Treasury (or the Secretary's
delegate).
“(B) EMPLOYEE CERTIFICATION.—The administrator
of an eligible retirement plan may rely on an employee's certification
that the employee satisfies the conditions of subparagraph (A)(ii)
in determining whether any distribution is a coronavirus-related distribution.
“(C) ELIGIBLE RETIREMENT PLAN.—The
term ‘‘eligible retirement plan’’ has the
meaning given such term by section
402(c)(8)(B) of the Internal Revenue Code of 1986.
“(5) INCOME INCLUSION SPREAD OVER 3-YEAR
PERIOD.—
“(A) IN GENERAL.—In the case of any
coronavirus-related distribution, unless the taxpayer elects not to
have this paragraph apply for any taxable year, any amount required
to be included in gross income for such taxable year shall be so included
ratably over the 3-taxableyear period beginning with such taxable
year.
“(B) SPECIAL RULE.—For purposes of
subparagraph (A), rules similar to the rules of subparagraph (E) of section 408A(d)(3) of the Internal Revenue
Code of 1986 shall apply.
“(6) SPECIAL RULES.—
“(A) EXEMPTION OF DISTRIBUTIONS FROM TRUSTEE
TO TRUSTEE TRANSFER AND WITHHOLDING RULES.—For purposes of sections
401(a)(31), 402(f), and 3405 of the Internal
Revenue Code of 1986, coronavirus-related distributions
shall not be treated as eligible rollover distributions.
“(B) CORONAVIRUS-RELATED DISTRIBUTIONS TREATED
AS MEETING PLAN DISTRIBUTION REQUIREMENTS.—For purposes of the
Internal Revenue Code of 1986, a coronavirus-related distribution
shall be treated as meeting the requirements of sections 401(k)(2)(B)(i),
403(b)(7)(A)(i), 403(b)(11), and 457(d)(1)(A) of such Code and section
8433(h)(1) of title 5, United States Code.
“(b) LOANS FROM QUALIFIED PLANS.—
“(1) INCREASE IN LIMIT ON LOANS NOT TREATED
AS DISTRIBUTIONS.—In the case of any loan from a qualified employer
plan (as defined under section 72(p)(4)
of the Internal Revenue Codeof 1986) to a qualified individual
made during the 180- day period beginning on the date of the enactment
of this Act—
“(A) clause (i) of section 72(p)(2)(A) of
such Code shall be applied by substituting ‘‘$100,000’’
for ‘‘$50,000’’, and
“(B) clause (ii) of such section shall be
applied by substituting ‘‘the present value of the nonforfeitable
accrued benefit of the employee under the plan’’ for ‘‘one-half
of the present value of the nonforfeitable accrued benefit of the
employee under the plan’’.
“(2) DELAY OF REPAYMENT.—In the case
of a qualified individual with an outstanding loan (on or after the
date of the enactment of this Act) from a qualified employer plan
(as defined in section 72(p)(4) of
the Internal Revenue Code of 1986)—
“(A) if the due date pursuant to subparagraph
(B) or (C) of section 72(p)(2) of such Code for any repayment with
respect to such loan occurs during the period beginning on the date
of the enactment of this Act and ending on December 31, 2020, such
due date shall be delayed for 1 year,
“(B) any subsequent repayments with respect
to any such loan shall be appropriately adjusted to reflect the delay
in the due date under subparagraph (A) and any interest accruing during
such delay, and
“(C) in determining the 5-year period and
the term of a loan under subparagraph (B) or (C) of section 72(p)(2)
of such Code, the period described in subparagraph (A) of this paragraph
shall be disregarded.
“(3) QUALIFIED INDIVIDUAL.—For purposes
of this subsection, the term ‘‘qualified individual’’
means any individual who is described in subsection (a)(4)(A)(ii).”
SPECIAL DISASTER-RELATED
RULES FOR USE OF RETIREMENT FUNDS
Section 202 of Pub. L. 116-94, Div. Q, provided:
“SEC. 202. SPECIAL DISASTER-RELATED RULES
FOR USE OF RETIREMENT FUNDS.
“(a) TAX-FAVORED WITHDRAWALS FROM RETIREMENT
PLANS.—
“(1) IN GENERAL.—Section 72(t) of the Internal Revenue Code of
1986 shall not apply to any qualified disaster distribution.
“(2) AGGREGATE DOLLAR LIMITATION.—
“(A) IN GENERAL.—For purposes of this
subsection, the aggregate amount of distributions received by an individual
which may be treated as qualified disaster distributions for any taxable
year shall not exceed the excess (if any) of—
“(i) $100,000, over
“(ii) the aggregate amounts treated as qualified
disaster distributions received by such individual for all prior taxable
years.
“(B) TREATMENT OF PLAN DISTRIBUTIONS.—If
a distribution to an individual would (without regard to subparagraph
(A)) be a qualified disaster distribution, a plan shall not be treated
as violating any requirement of the Internal Revenue Code of 1986
merely because the plan treats such distribution as a qualified disaster
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) to such individual exceeds $100,000.
“(C) CONTROLLED GROUP.—For purposes
of subparagraph (B), the term ‘‘controlled group’’
means any group treated as a single employer under subsection (b),
(c), (m), or (o) of section 414 of the
Internal Revenue Code of 1986.
“(D) SPECIAL RULE FOR INDIVIDUALS AFFECTED
BY MORE THAN ONE DISASTER.—The limitation of subparagraph (A)
shall be applied separately with respect to distributions made with
respect to each qualified disaster.
“(3) AMOUNT DISTRIBUTED MAY BE REPAID.—
“(A) IN GENERAL.—Any individual who
receives a qualified disaster distribution may, at any time during
the 3-year period beginning on the day after the date on which such
distribution was received, make 1 or more contributions in an aggregate
amount not to exceed the amount of such distribution to an 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), of the Internal
Revenue Code of 1986, as the case may be.
“(B) TREATMENT OF REPAYMENTS OF DISTRIBUTIONS
FROM ELIGIBLE RETIREMENT PLANS OTHER THAN IRAS.—For purposes
of the Internal Revenue Code of 1986, if a contribution is made pursuant
to subparagraph (A) with respect to a qualified disaster distribution
from an 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 the qualified disaster
distribution in an eligible rollover distribution (as defined in section
402(c)(4) of such Code) and as having transferred the amount to the
eligible retirement plan in a direct trustee to trustee transfer within
60 days of the distribution.
“(C) TREATMENT OF REPAYMENTS OF DISTRIBUTIONS
FROM IRAS.—For purposes of the Internal Revenue Code of 1986,
if a contribution is made pursuant to subparagraph (A) with respect
to a qualified disaster distribution from an individual retirement
plan (as defined by section 7701(a)(37) of such Code), then, to the
extent of the amount of the contribution, the qualified disaster distribution
shall be treated as a distribution described in section 408(d)(3)
of such Code and as having been transferred to the eligible retirement
plan in a direct trustee to trustee transfer within 60 days of the
distribution.
“(4) DEFINITIONS.—For purposes of this
subsection—
“(A) QUALIFIED DISASTER DISTRIBUTION.—Except
as provided in paragraph (2), the term ‘‘qualified disaster
distribution’’ means any distribution from an eligible
retirement plan made—
“(i) on or after the first day of the incident
period of a qualified disaster and before the date which is 180 days
after the date of the enactment of this Act, and
“(ii) to an individual whose principal place
of abode at any time during the incident period of such qualified
disaster is located in the qualified disaster area with respect to
such qualified disaster and who has sustained an economic loss by
reason of such qualified disaster.
“(B) ELIGIBLE RETIREMENT PLAN.—The
term ‘‘eligible retirement plan’’ shall have
the meaning given such term by section
402(c)(8)(B) of the Internal Revenue Code of 1986.
“(5) INCOME INCLUSION SPREAD OVER 3-YEAR
PERIOD.—
“(A) IN GENERAL.—In the case of any
qualified disaster distribution, unless the taxpayer elects not to
have this paragraph apply for any taxable year, any amount required
to be included in gross income for such taxable year shall be so included
ratably over the 3-taxable year period beginning with such taxable
year.
“(B) SPECIAL RULE.—For purposes of
subparagraph (A), rules similar to the rules of subparagraph (E) of section 408A(d)(3) of the Internal Revenue
Code of 1986 shall apply.
“(6) SPECIAL RULES.—
“(A) EXEMPTION OF DISTRIBUTIONS FROM TRUSTEE
TO TRUSTEE TRANSFER AND WITHHOLDING RULES.—For purposes of sections
401(a)(31), 402(f), and 3405 of the Internal
Revenue Code of 1986, qualified disaster distributions
shall not be treated as eligible rollover distributions.
“(B) QUALIFIED DISASTER DISTRIBUTIONS TREATED
AS MEETING PLAN DISTRIBUTION REQUIREMENTS.—For purposes the
Internal Revenue Code of 1986, a qualified disaster distribution 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) of such Code.
“(b) RECONTRIBUTIONS OF WITHDRAWALS FOR HOME
PURCHASES.—
“(1) RECONTRIBUTIONS.—
“(A) IN GENERAL.—Any individual who
received a qualified distribution may, during the applicable period,
make 1 or more contributions in an aggregate amount not to exceed
the amount of such qualified distribution to an eligible retirement
plan (as defined in section 402(c)(8)(B)
of the Internal Revenue Codeof 1986) 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), or 408(d)(3),
of such Code, as the case may be.
“(B) TREATMENT OF REPAYMENTS.—Rules
similar to the rules of subparagraphs (B) and (C) of subsection (a)(3)
shall apply for purposes of this subsection.
“(2) QUALIFIED DISTRIBUTION.—For purposes
of this subsection, the term ‘‘qualified distribution’’
means any distribution—
“(A) described in section 401(k)(2)(B)(i)(IV),
403(b)(7)(A)(ii) (but only to the extent such distribution relates
to financial hardship), 403(b)(11)(B), or 72(t)(2)(F), of the Internal
Revenue Code of 1986,
“(B) which was to be used to purchase or
construct a principal residence in a qualified disaster area, but
which was not so used on account of the qualified disaster with respect
to such area, and
“(C) which was received during the period
beginning on the date which is 180 days before the first day of the
incident period of such qualified disaster and ending on the date
which is 30 days after the last day of such incident period.
“(3) APPLICABLE PERIOD.—For purposes
of this subsection, the term ‘‘applicable period’’
means, in the case of a principal residence in a qualified disaster
area with respect to any qualified disaster, the period beginning
on the first day of the incident period of such qualified disaster
and ending on the date which is 180 days after the date of the enactment
of this Act.
“(c) LOANS FROM QUALIFIED PLANS.—
“(1) INCREASE IN LIMIT ON LOANS NOT TREATED
AS DISTRIBUTIONS.—In the case of any loan from a qualified employer
plan (as defined under section 72(p)(4)
of the Internal Revenue Codeof 1986) to a qualified individual
made during the 180-day period beginning on the date of the enactment
of this Act—
“(A) clause (i) of section 72(p)(2)(A) of
such Code shall be applied by substituting ‘‘$100,000’’
for ‘‘$50,000’’, and
“(B) clause (ii) of such section shall be
applied by substituting ‘‘the present value of the nonforfeitable
accrued benefit of the employee under the plan’’ for ‘‘one-half
of the present value of the nonforfeitable accrued benefit of the
employee under the plan’’.
“(2) DELAY OF REPAYMENT.—In the case
of a qualified individual (with respect to any qualified disaster)
with an outstanding loan (on or after the first day of the incident
period of such qualified disaster) from a qualified employer plan
(as defined in section 72(p)(4) of
the Internal Revenue Code of 1986)—
“(A) if the due date pursuant to subparagraph
(B) or (C) of section 72(p)(2) of such Code for any repayment with
respect to such loan occurs during the period beginning on the first
day of the incident period of such qualified disaster and ending on
the date which is 180 days after the last day of such incident period,
such due date shall be delayed for 1 year (or, if later, until the
date which is 180 days after the date of the enactment of this Act),
“(B) any subsequent repayments with respect
to any such loan shall be appropriately adjusted to reflect the delay
in the due date under subparagraph (A) and any interest accruing during
such delay, and
“(C) in determining the 5-year period and
the term of a loan under subparagraph (B) or (C) of section 72(p)(2)
of such Code, the period described in subparagraph (A) of this paragraph
shall be disregarded.
“(3) QUALIFIED INDIVIDUAL.—For purposes
of this subsection, the term ‘‘qualified individual’’
means any individual—
“(A) whose principal place of abode at any
time during the incident period of any qualified disaster is located
in the qualified disaster area with respect to such qualified disaster,
and
“(B) who has sustained an economic loss by
reason of such qualified disaster.
“(d) PROVISIONS RELATING TO PLAN AMENDMENTS.—
“(1) IN GENERAL.—If this subsection
applies to any amendment to any plan or annuity contract, such plan
or contract shall be treated as being operated in accordance with
the terms of the plan during the period described in paragraph (2)(B)(i).
“(2) AMENDMENTS TO WHICH SUBSECTION APPLIES.—
“(A) IN GENERAL.—This subsection shall
apply to any amendment to any plan or annuity contract which is made—
“(i) pursuant to any provision of this section,
or pursuant to any regulation issued by the Secretary or the Secretary
of Labor under any provision of this section, and
“(ii) on or before the last day of the first
plan year beginning on or after January 1, 2020, or such later date
as the Secretary may prescribe.
“In the case of a governmental plan (as defined
in section 414(d) of the Internal Revenue
Code of 1986), clause (ii) shall be applied by substituting
the date which is 2 years after the date otherwise applied under clause
(ii).
“(B) CONDITIONS.—This subsection shall
24 not apply to any amendment unless—
“(i) during the period—
“(I) beginning on the date that this section
or the regulation described in subparagraph (A)(i) takes effect (or
in the case of a plan or contract amendment not required by this section
or such regulation, the effective date specified by the plan), and
“(II) ending on the date described in subparagraph
(A)(ii) (or, if earlier, the date the plan or contract amendment is
adopted),
“the plan or contract is operated as if such
plan or contract amendment were in effect, and
“(ii) such plan or contract amendment applies
retroactively for such period.”
RELIEF FOR 2016 DISASTER
AREAS
Section 11028 of Pub. L. 115-97 provided:
“(a) IN GENERAL.—For
purposes of this section, the term ‘‘2016 disaster area’’
means any area with respect to which a major disaster has been declared
by the President under section 401 of the Robert T. Stafford Disaster
Relief and Emergency Assistance Act during calendar year 2016.
“(b) SPECIAL RULES
FOR USE OF RETIREMENT FUNDS WITH RESPECT TO AREAS DAMAGED BY 2016
DISASTERS.—
“(1) TAX-FAVORED WITHDRAWALS
FROM RETIREMENT PLANS.—
“(A) IN GENERAL.—Section 72(t) of the Internal Revenue Code of
1986 shall not apply to any qualified 2016 disaster distribution.
“(B) AGGREGATE DOLLAR
LIMITATION.—
“(i) IN GENERAL.—For
purposes of this subsection, the aggregate amount of distributions
received by an individual which may be treated as qualified 2016 disaster
distributions for any taxable year shall not exceed the excess (if
any) of—
“(I) $100,000, over
“(II) the aggregate
amounts treated as qualified 2016 disaster distributions received
by such individual for all prior taxable years.
“(ii) TREATMENT OF
PLAN DISTRIBUTIONS.—If a distribution to an individual would
(without regard to clause (i)) be a qualified 2016 disaster distribution,
a plan shall not be treated as violating any requirement of this title
merely because the plan treats such distribution as a qualified 2016
disaster 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) to such individual exceeds $100,000.
“(iii) CONTROLLED
GROUP.—For purposes of clause (ii), the term ‘‘controlled
group’’ means any group treated as a single employer under
subsection (b), (c), (m), or (o) of section
414 of the Internal Revenue Code of 1986.
“(C) AMOUNT DISTRIBUTED
MAY BE REPAID.—
“(i) IN GENERAL.—Any
individual who receives a qualified 2016 disaster 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 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) of the Internal Revenue Code of
1986, as the case may be.
“(ii) TREATMENT OF
REPAYMENTS OF DISTRIBUTIONS FROM ELIGIBLE RETIREMENT PLANS OTHER THAN
IRAS.— For purposes of the Internal Revenue Code of 1986, if
a contribution is made pursuant to clause (i) with respect to a qualified
2016 disaster distribution from an 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
the qualified 2016 disaster distribution in an eligible rollover distribution
(as defined in section 402(c)(4)
of the Internal Revenue Code of 1986) and as having transferred
the amount to the eligible retirement plan in a direct trustee to
trustee transfer within 60 days of the distribution.
“(iii) TREATMENT OF
REPAYMENTS FOR DISTRIBUTIONS FROM IRAS.—For purposes of the
Internal Revenue Code of 1986, if a contribution is made pursuant
to clause (i) with respect to a qualified 2016 disaster distribution
from an individual retirement plan (as defined by section 7701(a)(37) of the Internal Revenue
Code of 1986), then, to the extent of the amount of the
contribution, the qualified 2016 disaster distribution shall be treated
as a distribution described in section 408(d)(3) of such Code and
as having been transferred to the eligible retirement plan in a direct
trustee to trustee transfer within 60 days of the distribution.
“(D) DEFINITIONS.—For
purposes of this paragraph—
“(i) QUALIFIED 2016
DISASTER DISTRIBUTION.—Except as provided in subparagraph (B),
the term ‘‘qualified 2016 disaster distribution’’
means any distribution from an eligible retirement plan made on or
after January 1, 2016, and before January 1, 2018, to an individual
whose principal place of abode at any time during calendar year 2016
was located in a disaster area described in subsection (a) and who
has sustained an economic loss by reason of the events giving rise
to the Presidential declaration described in subsection (a) which
was applicable to such area.
“(ii) ELIGIBLE RETIREMENT
PLAN.—The term ‘‘eligible retirement plan’’
shall have the meaning given such term by section 402(c)(8)(B) of the Internal Revenue
Code of 1986.
“(E) INCOME INCLUSION
SPREAD OVER 3-YEAR PERIOD.—
“(i) IN GENERAL.—In
the case of any qualified 2016 disaster distribution, unless the taxpayer
elects not to have this subparagraph apply for any taxable year, any
amount required to be included in gross income for such taxable year
shall be so included ratably over the 3-taxable-year period beginning
with such taxable year.
“(ii) SPECIAL RULE.—For
purposes of clause (i), rules similar to the rules of subparagraph
(E) of section 408A(d)(3) of the
Internal Revenue Code of 1986 shall apply.
“(F) SPECIAL RULES.—
“(i) EXEMPTION OF
DISTRIBUTIONS FROM TRUSTEE TO TRUSTEE TRANSFER AND WITHHOLDING RULES.—For
purposes of sections 401(a)(31), 402(f), and 3405
of the Internal Revenue Code of 1986, qualified 2016 disaster
distribution shall not be treated as eligible rollover distributions.
“(ii) QUALIFIED 2016
DISASTER DISTRIBUTIONS TREATED AS MEETING PLAN DISTRIBUTION REQUIREMENTS.—For
purposes of the Internal Revenue Code of 1986, a qualified 2016 disaster
distribution 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) of the Internal Revenue Code of
1986.
“(2) PROVISIONS RELATING
TO PLAN AMENDMENTS.—
“(A) IN GENERAL.—If
this paragraph applies to any amendment to any plan or annuity contract,
such plan or contract shall be treated as being operated in accordance
with the terms of the plan during the period described in subparagraph
(B)(ii)(I).
“(B) AMENDMENTS TO
WHICH SUBSECTION APPLIES.—
“(i) IN GENERAL.—This
paragraph shall apply to any amendment to any plan or annuity contract
which is made—
“(I) pursuant to any
provision of this section, or pursuant to any regulation under any
provision of this section, and
“(II) on or before
the last day of the first plan year beginning on or after January
1, 2018, or such later date as the Secretary prescribes. In the case
of a governmental plan (as defined in section
414(d) of the Internal Revenue Code of 1986), subclause
(II) shall be applied by substituting the date which is 2 years after
the date otherwise applied under subclause (II).
“(ii) CONDITIONS.—This
paragraph shall not apply to any amendment to a plan or contract unless
such amendment applies retroactively for such period, and shall not
apply to any such amendment unless the plan or contract is operated
as if such amendment were in effect during the period—
“(I) beginning on
the date that this section or the regulation described in clause (i)(I)
takes effect (or in the case of a plan or contract amendment not required
by this section or such regulation, the effective date specified by
the plan), and
“(II) ending on the
date described in clause (i)(II) (or, if earlier, the date the plan
or contract amendment is adopted).
“(c) SPECIAL RULES
FOR PERSONAL CASUALTY LOSSES RELATED TO 2016 MAJOR DISASTER.—
“(1) IN GENERAL.—If
an individual has a net disaster loss for any taxable year beginning
after December 31, 2015, and before January 1, 2018—
“(A) the amount determined
under section 165(h)(2)(A)(ii)
of the Internal Revenue Code of 1986 shall be equal to
the sum of—
“(i) such net disaster
loss, and
“(ii) so much of the
excess referred to in the matter preceding clause (i) of section 165(h)(2)(A)
of such Code (reduced by the amount in clause (i) of this subparagraph)
as exceeds 10 percent of the adjusted gross income of the individual,
“(B) section 165(h)(1)
of such Code shall be applied by substituting ‘‘$500’’
for ‘‘$500 ($100 for taxable years beginning after December
31, 2009)’’,
“(C) the standard
deduction determined under section 63(c) of such Code shall be increased
by the net disaster loss,
“(D) section 56(b)(1)(E)
of such Code shall not apply to so much of the standard deduction
as is attributable to the increase under subparagraph (C) of this
paragraph.
“(2) NET DISASTER
LOSS.—For purposes of this subsection, the term ‘‘net
disaster loss’’ means the excess of qualified disaster-related
personal casualty losses over personal casualty gains (as defined
in section 165(h)(3)(A) of the
Internal Revenue Code of 1986).
“(3) QUALIFIED DISASTER-RELATED
PERSONAL CASUALTY LOSSES.—For purposes of this paragraph, the
term ‘‘qualified disaster-related personal casualty losses’’
means losses described in section
165(c)(3) of the Internal Revenue Code of 1986 which arise
in a disaster area described in subsection (a) on or after January
1, 2016, and which are attributable to the events giving rise to the
Presidential declaration described in subsection (a) which was applicable
to such area.”
SPECIAL DISASTER-RELATED
RULES FOR USE OF RETIREMENT FUNDS
Section 502(c)(1) and (3)
of Pub. L. 115-63 provided:
“(a) TAX-FAVORED WITHDRAWALS FROM RETIREMENT
PLANS.—
“(1) IN GENERAL.—Section 72(t) of the Internal Revenue Code of
1986 shall not apply to any qualified hurricane distribution.”
* * *
“(c) LOANS FROM QUALIFIED PLANS.—
“(1) INCREASE IN LIMIT ON LOANS NOT TREATED
AS DISTRIBUTIONS.—In the case of any loan from a qualified employer
plan (as defined under section 72(p)(4)
of the Internal Revenue Codeof 1986) to a qualified individual
made during the period beginning on the date of the enactment of this
Act and ending on December 31, 2018—
“(A) clause (i) of section 72(p)(2)(A)
of such Code shall be applied by substituting “$100,000”
for “$50,000”, and
“(B) clause (ii) of such section shall
be applied by substituting “the present value of the nonforfeitable
accrued benefit of the employee under the plan” for “one-half
of the present value of the nonforfeitable accrued benefit of the
employee under the plan”.
“(2) DELAY OF REPAYMENT.—In the
case of a qualified individual with an outstanding loan on or after
the qualified beginning date from a qualified employer plan (as defined
in section 72(p)(4) of the Internal
Revenue Code of 1986)—
“(A) if the due date pursuant to subparagraph
(B) or (C) of section 72(p)(2) of such Code for any repayment with
respect to such loan occurs during the period beginning on the qualified
beginning date and ending on December 31, 2018, such due date shall
be delayed for 1 year,
“(B) any subsequent repayments with respect
to any such loan shall be appropriately adjusted to reflect the delay
in the due date under paragraph (1) and any interest accruing during
such delay, and
“(C) in determining the 5-year period and
the term of a loan under subparagraph (B) or (C) of section 72(p)(2)
of such Code, the period described in subparagraph (A) shall be disregarded.”
TAX-FAVORED WITHDRAWALS FROM RETIREMENT PLANS
FOR RELIEF RELATING TO HURRICANE KATRINA
Section 101(a) and (b) of Pub. L. 109-73, before repeal by Pub. L. 109-135, Sec. 201(b)(4) (effective
Dec. 21, 2005) provided that:
“(a) IN GENERAL.—Section
72(t) of the Internal Revenue Code of 1986 shall not apply
to any qualified Hurricane Katrina distribution.
“(b) AGGREGATE DOLLAR LIMITATION.—
“(1) IN GENERAL.—For purposes of this section,
the aggregate amount of distributions received by an individual which
may be treated as qualified Hurricane Katrina distributions for any
taxable year shall not exceed the excess (if any) of—
“(A) $100,000, over
“(B) the aggregate amounts treated as qualified
Hurricane Katrina distributions received by such individual for all
prior taxable years.
“(2) TREATMENT OF PLAN DISTRIBUTIONS.--If a distribution
to an individual would (without regard to paragraph (1)) be a qualified
Hurricane Katrina distribution, a plan shall not be treated as violating
any requirement of the Internal Revenue Code of 1986 merely because
the plan treats such distribution as a qualified Hurricane Katrina
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) to such individual exceeds $100,000.
“(3) CONTROLLED GROUP.—For purposes of paragraph
(2), the term “controlled group” means any group treated as a single
employer under subsection (b), (c), (m), or (o) of section 414 of
such Code.”
RECONTRIBUTIONS OF WITHDRAWALS FOR HOME PURCHASES
CANCELLED DUE TO HURRICANE KATRINA
Section 102 of Pub.
L. 109-73, before repeal by Pub. L. 109-135, Sec. 201(b)(4) (effective
Dec. 21, 2005) provided that:
“(a) RECONTRIBUTIONS.—
“(1) IN GENERAL.—Any individual who received
a qualified distribution may, during the period beginning on August
25, 2005, and ending on February 28, 2006, make one or more contributions
in an aggregate amount not to exceed the amount of such qualified
distribution to an eligible retirement plan (as defined in section 402(c)(8)(B) of the Internal Revenue
Code of 1986) 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), or 408(d)(3) of such
Code, as the case may be.
“(2) TREATMENT OF REPAYMENTS.—Rules similar
to the rules of paragraphs (2) and (3) of section 101(c) of this Act
shall apply for purposes of this section.
“(b) QUALIFIED DISTRIBUTION DEFINED.—For
purposes of this section, the term “qualified distribution” means
any distribution—
“(1) described in section 401(k)(2)(B)(i)(IV),
403(b)(7)(A)(ii) (but only to the extent such distribution relates
to financial hardship), 403(b)(11)(B), or 72(t)(2)(F) of such Code,
“(2) received after February 28, 2005, and before
August 29, 2005, and
“(3) which was to be used to purchase or construct
a principal residence in the Hurricane Katrina disaster area, but
which was not so purchased or constructed on account of Hurricane
Katrina.”
LOANS FROM QUALIFIED PLANS FOR RELIEF RELATING
TO HURRICANE KATRINA
Section 103 of Pub.
L. 109-73, before repeal by Pub. L. 109-135, Sec. 201(b)(4) (effective
Dec. 21, 2005) provided that:
“(a) INCREASE IN LIMIT ON LOANS NOT TREATED AS
DISTRIBUTIONS.–In the case of any loan from a qualified employer
plan (as defined under section 72(p)(4)
of the Internal Revenue Codeof 1986) to a qualified individual
made after the date of enactment of this Act and before January 1,
2007—
“(1) clause (i) of section 72(p)(2)(A) of such
Code shall be applied by substituting “$100,000” for “$50,000”, and
“(2) clause (ii) of such section shall be applied
by substituting “the present value of the nonforfeitable accrued benefit
of the employee under the plan” for “one-half of the present value
of the nonforfeitable accrued benefit of the employee under the plan”.
“(b) DELAY OF REPAYMENT.—In the case of a
qualified individual with an outstanding loan on or after August 25,
2005, from a qualified employer plan (as defined in section 72(p)(4)
of such Code)—
“(1) if the due date pursuant to subparagraph (B)
or (C) of section 72(p)(2) of such Code for any repayment with respect
to such loan occurs during the period beginning on August 25, 2005,
and ending on December 31, 2006, such due date shall be delayed for
1 year,
“(2) any subsequent repayments with respect to
any such loan shall be appropriately adjusted to reflect the delay
in the due date under paragraph (1) and any interest accruing during
such delay, and
“(3) in determining the 5-year period and the term
of a loan under subparagraph (B) or (C) of section 72(p)(2) of such
Code, the period described in paragraph (1) shall be disregarded.
“(c) QUALIFIED INDIVIDUAL.—For purposes of
this section, the term “qualified individual” means an individual
whose principal place of abode on August 28, 2005, is located in the
Hurricane Katrina disaster area and who has sustained an economic
loss by reason of Hurricane Katrina.”
SAVINGS PROVISION
For provisions that nothing in amendment by Pub. L. 101-508 be construed to
affect treatment of certain transactions occurring, property acquired,
or items of income, loss, deduction, or credit taken into account
prior to Nov. 5, 1990, for purposes of determining liability for tax
for periods ending after Nov. 5, 1990, see section 11821(b) of Pub. L. 101-508, set out as a note
under section 29 of this title.
Section 1951(b)(1)(B) of Pub. L. 94-455 provided that: ‘Notwithstanding
subparagraph (A) (repealing subsec. (i) of this section), if the provisions
of section 72(i) applied to amounts received in taxable years beginning
before January 1, 1977, under an annuity contract, then amounts received
under such contract on or after such date shall be treated as if such
provisions were not repealed.’
APPLICABILITY OF SUBSECTION (t)
Section 1011A(c)(13) of Pub. L. 100-647 provided that: ‘Section
72(t) of the 1986 Code shall apply to any distribution without regard
to whether such distribution is made without the consent of the participant
pursuant to section 411(a)(11) or section 417(e) of the 1986 Code.’
PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1,
1989
For provisions directing that if any amendments
made by subtitle A or subtitle C of title XI (Sec. 1101-1147 and 1171-1177)
or title XVIII (Sec. 1800-1899A) of Pub.
L. 99-514 require an amendment to any plan, such
plan amendment shall not be required to be made before the first plan
year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99-514, as amended, set out
as a note under section 401 of this title.