Sec. 5. Transfer of required minimum distribution from retirement plan to health savings account
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Section 408(d) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: In the case of an individual who has attained the age of 70 ½ and who elects the application of this paragraph for a taxable year, gross income of the individual for the taxable year does not include a qualified HSA transfer to the extent such transfer is otherwise includible in gross income. For purposes of this paragraph, the term qualified HSA transfer means any distribution from an individual retirement plan— to a health savings account of the individual in a direct trustee-to-trustee transfer, to the extent such distribution does not exceed the required minimum distribution determined under section 401(a)(9) for the distribution calendar year ending during the taxable year.
Notwithstanding section 72, in determining the extent to which an amount is treated as otherwise includible in gross for purposes of subparagraph (A), the aggregate amount distributed from an individual retirement plan shall be treated as includible in gross income to the extent that such amount does not exceed the aggregate amount which would have been so includible if all amounts from all individual retirement plans were distributed. Proper adjustments shall be made in applying section 72 to other distributions in such taxable year and subsequent taxable years.
An election may not be made under subparagraph
(A)for a taxable year for which an election is in effect under paragraph (9). . Section 402 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: In the case of an individual who has attained the age of 70 ½ and who elects the application of this subsection for a taxable year, gross income of the individual for the taxable year does not include a qualified HSA transfer to the extent such transfer is otherwise includible in gross income. For purposes of this subsection, the term qualified HSA transfer means any distribution from a retirement plan— to a health savings account of the individual in a direct trustee-to-trustee transfer, to the extent such distribution does not exceed the required minimum distribution determined under section 401(a)(9) for the distribution calendar year ending during the taxable year. Notwithstanding section 72, in determining the extent to which an amount is treated as otherwise includible in gross for purposes of paragraph (1), the aggregate amount distributed from an individual retirement plan shall be treated as includible in gross income to the extent that such amount does not exceed the aggregate amount which would have been so includible if all amounts from all individual retirement plans were distributed. Proper adjustments shall be made in applying section 72 to other distributions in such taxable year and subsequent taxable years. For purposes of this subsection, the term eligible retirement plan has the meaning given such term by subsection (c)(8)(B) (determined without regard to clauses
(i)and
(ii)thereof). . Subparagraph
(A)of section 223(d)(1) of such Code is amended by striking or at the end of clause (i), by striking the period at the end of clause (ii)(II) and inserting , or , and by adding at the end the following new clause: unless it is in a qualified HSA transfer described in section 408(d)(10) or 402(m). . Paragraph
(1)of section 4973(g) of such Code is amended by inserting or in a qualified HSA transfer described in section 408(d)(10) or 402(m) after or 223(f)(5) . The amendments made by this section shall apply to distributions made after the date of the enactment of this Act.