Sec. 323. Clarification of substantially equal periodic payment rule
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Paragraph
(4)of section 72(t) is amended by inserting at the end the following new subparagraph: If— payments described in paragraph (2)(A)(iv) are being made from a qualified retirement plan, a transfer or a rollover from such qualified retirement plan of all or a portion of the taxpayer's benefit under the plan is made to another qualified retirement plan, and distributions from the transferor and transferee plans would in combination continue to satisfy the requirements of paragraph (2)(A)(iv) if they had been made only from the transferor plan, such transfer or rollover shall not be treated as a modification under subparagraph (A)(ii), and compliance with paragraph (2)(A)(iv) shall be determined on the basis of the combined distributions described in clause (iii). . Paragraph
(3)of section 72(q) is amended— by redesignating clauses
(i)and
(ii)of subparagraph
(B)as subclauses
(I)and (II), and by moving such subclauses 2 ems to the right; by redesignating subparagraphs
(A)and
(B)as clauses
(i)and (ii), by moving such clauses 2 ems to the right, and by adjusting the flush language at the end accordingly; by striking and inserting “ payments .—If payments .— If— ; and by adding at the end the following new subparagraph: If— payments described in paragraph (2)(D) are being made from an annuity contract, an exchange of all or a portion of such contract for another contract is made under section 1035, and the aggregate distributions from the contracts involved in the exchange continue to satisfy the requirements of paragraph (2)(D) as if the exchange had not taken place, such exchange shall not be treated as a modification under subparagraph (A)(ii), and compliance with paragraph (2)(D) shall be determined on the basis of the combined distributions described in clause (iii). . Section 6724 is amended by inserting at the end the following new subsection: No penalty shall be imposed under section 6721 or 6722 if— a person makes a return or report under section 6047(d) or 408(i) with respect to any distribution, such distribution is made following a rollover, transfer, or exchange described in section 72(t)(4)(C) or section 72(q)(3)(C), in making such return or report the person relies upon a certification provided by the taxpayer that the distributions satisfy the requirements of section 72(t)(4)(C)(iii) or section 72(q)(3)(B)(iii), as applicable, and such person does not have actual knowledge that the distributions do not satisfy such requirements. . Subparagraph
(A)of section 72(t)(2) is amended by adding at the end the following flush sentence: For purposes of clause (iv), periodic payments shall not fail to be treated as substantially equal merely because they are amounts received as an annuity, and such periodic payments shall be deemed to be substantially equal if they are payable over a period described in clause
(iv)and satisfy the requirements applicable to annuity payments under section 401(a)(9). . Paragraph
(2)of section 72(q) is amended by adding at the end the following flush sentence: For purposes of subparagraph (D), periodic payments shall not fail to be treated as substantially equal merely because they are amounts received as an annuity, and such periodic payments shall be deemed to be substantially equal if they are payable over a period described in subparagraph
(D)and would satisfy the requirements applicable to annuity payments under section 401(a)(9) if such requirements applied. . The amendments made by subsections (a), (b), and
(c)shall apply to transfers, rollovers, and exchanges occurring after December 31, 2023. The amendment made by subsection
(d)shall apply to distributions commencing on or after the date of the enactment of this Act. Nothing in the amendments made by this section shall be construed to create an inference with respect to the law in effect prior to the effective date of such amendments.