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 —
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(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)(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)(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 —
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)(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)(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)(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(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)(3) Change In Substantially Equal Payments —
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(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 —
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
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)(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)(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, or
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.
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 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)(ii), 403(b)(11), and 457(d)(1)(A).
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 —
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)(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 —
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)(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)(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 In Governmental Plans
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)), paragraph (2)(A)(v) shall be applied by substituting “age 50” 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 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(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)(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)(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.)
BACKGROUND NOTES
AMENDMENTS
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 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.
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 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 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.
