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Pension and Employee Benefits: Code, ERISA, & Regulations
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CCH® PENSION AND BENEFITS — 5/29/08

House committee OKs extenders package with pension, deferred comp provisions

The House Ways and Means Committee, on May 15, 2008, approved the Energy and Tax Extenders Bill of 2008 (H.R. 6049), legislation that includes provisions affecting IRAs, qualified plan distributions, and nonqualified deferred compensation. The measure was scheduled to be considered by the full House on May 20, 2008.

IRA contributions to charity

An exclusion from gross income was provided for otherwise taxable IRA distributions of up to $100,000 that were made as “qualified charitable distributions” from either a traditional or Roth IRA.

The rule applies to distributions made in tax years beginning after December 31, 2005, and sunsets for distributions made in tax years beginning after December 31, 2007. The bill would extend the exclusion for qualified charitable distributions to distributions made in taxable years beginning after December 31, 2007, and before January 1, 2009.

Qualified reservist distributions

A “qualified reservist distribution” from an IRA or attributable to elective deferrals under a 401(k) plan, 403(b) annuity, or certain similar arrangements are not subject to the 10% early withdrawal tax if the qualified reservist was ordered or called to active duty for a period in excess of 179 days or for an indefinite period. The qualified reservist distribution rules apply to individuals ordered or called to active duty after September 11, 2001, and before December 31, 2007. Under the bill, these rules would be extended to individuals ordered or called to active duty before January 1, 2009.

Offshore deferred compensation

Among the revenue raising items in the bill is a proposal to modify the tax treatment of offshore deferred compensation. The change would generally be effective with respect to amounts deferred which are attributable to services performed after December 31, 2008.