HR9081-118

2. Special disaster-related rules for use of retirement funds Section 72(t) of the Internal Revenue Code of 1986 shall not apply to any qualified Iowa disaster distribution. For purposes of this subsection, the aggregate amount of distributions received by an individual which may be treated as qualified Iowa disaster distributions for any taxable year shall not exceed the excess (if any) of— $100,000, over the aggregate amounts treated as qualified Iowa disaster distributions received by such individual for all prior taxable years. If a distribution to an individual would (without regard to subparagraph (A)) be a qualified Iowa 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 Iowa 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. 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. Any individual who receives a qualified Iowa 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. For purposes of the Internal Revenue Code of 1986, if a contribution is made pursuant to subparagraph (A) with respect to a qualified Iowa 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 Iowa 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. For purposes of the Internal Revenue Code of 1986, if a contribution is made pursuant to subparagraph (A) with respect to a qualified Iowa 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 Iowa 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. For purposes of this subsection— Except as provided in paragraph (2), the term qualified Iowa disaster distribution means any distribution from an eligible retirement plan made on or after the applicable date, and before January 1, 2026, to an individual whose principal place of abode on the applicable date, is located in the Iowa disaster area. For purposes of paragraph (1), the term Iowa disaster area means— any area within the Iowa counties of Clarke, Harrison, Mills, Polk, Pottawattamie, Ringgold, Shelby, or Union with respect to which a major disaster was declared, during the period beginning on April 26, 2024, and ending on the date which is 60 days after the date of the enactment of this Act, by the President under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, and any area within the Iowa counties of Clay, Emmet, Lyon, Plymouth, or Sioux with respect to which a major disaster was declared, during the period beginning on June 16, 2024, and ending on the date which is 60 days after the date of the enactment of this Act, by the President under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act. For purposes of this paragraph, the term applicable date means— in the case of a disaster area described in subparagraph (B)(i), April 26, 2024, and in the case of a disaster area described in subparagraph (B)(ii), June 16, 2024. The term eligible retirement plan has the meaning given such term by section 402(c)(8)(B) of the Internal Revenue Code of 1986. In the case of any qualified Iowa 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. 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. For purposes of sections 401(a)(31), 402(f), and 3405 of the Internal Revenue Code of 1986, qualified Iowa disaster distributions shall not be treated as eligible rollover distributions. For purposes the Internal Revenue Code of 1986, a qualified Iowa 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. Any individual who received a qualified distribution may, during the period beginning on the applicable date, and ending on December 31, 2024, 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. Rules similar to the rules of subparagraphs (B) and (C) of subsection (a)(3) shall apply for purposes of this subsection. For purposes of this subsection, the term qualified distribution means any distribution— 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, received on or after the applicable date, and before December 31, 2024, and which was to be used to purchase or construct a principal residence in the Iowa disaster area. For purposes of this subsection, the term applicable date means— in the case of a qualified distribution received with respect to the Iowa disaster area described in subsection (a)(4)(B)(i), April 26, 2024, and in the case of a qualified distribution received with respect to the Iowa disaster area described in subsection (a)(4)(B)(ii), June 14, 2024. 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 period beginning on the date of the enactment of this Act and ending on December 31, 2025— clause (i) of section 72(p)(2)(A) of such Code shall be applied by substituting $100,000 for $50,000, and 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. 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)— 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, 2025, such due date shall be delayed for 1 year, 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 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. For purposes of this subsection, the term qualified individual means an individual whose principal place of abode on the applicable date described in subsection (a)(4)(C) is located in the Iowa disaster area and who has sustained an economic loss by reason of severe storms, flooding, straight-line winds, or tornadoes beginning on such date. For purposes of this subsection, the qualified beginning date is the applicable date described in subsection (a)(4)(C). 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). This subsection shall apply to any amendment to any plan or annuity contract which is made— 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 on or before the last day of the first plan year beginning on or after January 1, 2026, or such later date as the Secretary may prescribe. This subsection shall not apply to any amendment unless— during the period— 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 ending on the date described in subparagraph (A)(ii) (or, if earlier, the date the plan or contract amendment is adopted), such plan or contract amendment applies retroactively for such period.