Page:United States Statutes at Large Volume 120.djvu/1030

 PUBLIC LAW 109–280—AUG. 17, 2006

120 STAT. 999

(A) in the text by striking ‘‘individual retirement plan’’ and inserting ‘‘an eligible retirement plan (as defined by section 402(c)(8)(B))’’, and (B) in the heading by striking ‘‘IRA’’ the first place it appears and inserting ‘‘ELIGIBLE RETIREMENT PLAN’’. (2) Section 408A(d)(3) of such Code is amended— (A) in subparagraph (A), by striking ‘‘section 408(d)(3)’’ inserting ‘‘sections 402(c), 403(b)(8), 408(d)(3), and 457(e)(16)’’, (B) in subparagraph (B), by striking ‘‘individual retirement plan’’ and inserting ‘‘eligible retirement plan (as defined by section 402(c)(8)(B))’’, (C) in subparagraph (D), by inserting ‘‘or 6047’’ after ‘‘408(i)’’, (D) in subparagraph (D), by striking ‘‘or both’’ and inserting ‘‘persons subject to section 6047(d)(1), or all of the foregoing persons’’, and (E) in the heading, by striking ‘‘IRA’’ the first place it appears and inserting ‘‘ELIGIBLE RETIREMENT PLAN’’. (c) EFFECTIVE DATE.—The amendments made by this section shall apply to distributions after December 31, 2007. SEC. 825. ELIGIBILITY FOR PARTICIPATION IN RETIREMENT PLANS.

26 USC 408A.

26 USC 408A note. 26 USC 457 note.

An individual shall not be precluded from participating in an eligible deferred compensation plan by reason of having received a distribution under section 457(e)(9) of the Internal Revenue Code of 1986, as in effect prior to the enactment of the Small Business Job Protection Act of 1996. SEC. 826. MODIFICATIONS OF RULES GOVERNING HARDSHIPS AND UNFORSEEN FINANCIAL EMERGENCIES.

26 USC 401 note.

Within 180 days after the date of the enactment of this Act, the Secretary of the Treasury shall modify the rules for determining whether a participant has had a hardship for purposes of section 401(k)(2)(B)(i)(IV) of the Internal Revenue Code of 1986 to provide that if an event (including the occurrence of a medical expense) would constitute a hardship under the plan if it occurred with respect to the participant’s spouse or dependent (as defined in section 152 of such Code), such event shall, to the extent permitted under a plan, constitute a hardship if it occurs with respect to a person who is a beneficiary under the plan with respect to the participant. The Secretary of the Treasury shall issue similar rules for purposes of determining whether a participant has had— (1) a hardship for purposes of section 403(b)(11)(B) of such Code; or (2) an unforeseen financial emergency for purposes of sections 409A(a)(2)(A)(vi), 409A(a)(2)(B)(ii), and 457(d)(1)(A)(iii) of such Code.

Deadline.

SEC. 827. PENALTY-FREE WITHDRAWALS FROM RETIREMENT PLANS FOR INDIVIDUALS CALLED TO ACTIVE DUTY FOR AT LEAST 179 DAYS.

(a) IN GENERAL.—Paragraph (2) of section 72(t) of the Internal Revenue Code of 1986 (relating to 10-percent additional tax on early distributions from qualified retirement plans) is amended by adding at the end the following new subparagraph: ‘‘(G) DISTRIBUTIONS FROM RETIREMENT PLANS TO INDIVIDUALS CALLED TO ACTIVE DUTY.—

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