H.R. 2524: Dave Thomas Adoption Act of 2009

Full title:
To amend the Internal Revenue Code of 1986 to allow penalty-free withdrawals from individual retirement plans for adoption expenses.

Summary:
Dave Thomas Adoption Act of 2009- Amends the Internal Revenue Code to allow penalty-free withdrawals from individual retirement plans if used to pay adoption expenses, including an enhanced allowance for expenses related to the adoption of a special needs child.

Text:

HR 2524 IH

111th CONGRESS1st SessionH. R. 2524

To amend the Internal Revenue Code of 1986 to allow penalty-free withdrawals from individual retirement plans for adoption expenses.

IN THE HOUSE OF REPRESENTATIVES

May 20, 2009

Mr. KING of New York (for himself, Mr. PAUL, and Mr. BURTON of Indiana) introduced the following bill; which was referred to the Committee on Ways and Means

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A BILL

To amend the Internal Revenue Code of 1986 to allow penalty-free withdrawals from individual retirement plans for adoption expenses.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Dave Thomas Adoption Act of 2009'.

SEC. 2. PENALTY-FREE WITHDRAWALS FROM INDIVIDUAL RETIREMENT PLANS FOR ADOPTION EXPENSES.

(a) In General- Paragraph (2) of section 72(t) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:

`(H) QUALIFIED ADOPTION EXPENSES-

`(i) IN GENERAL- Distributions from an individual retirement plan to the extent that the amount of such distributions does not exceed the lesser of--

`(I) $10,000 for the taxable year with respect to the adoption of a child, or

`(II) the amount determined under clause (ii).

`(ii) DETERMINATION OF EXPENSES NOT COVERED BY CREDIT- The amount determined under this clause is the excess (if any) of--

`(I) the qualified adoption expenses (as defined in section 23(d)) paid by the taxpayer during the taxable year with respect to the adoption of such child, over

`(II) the amount of the credit allowable under section 23 for such expenses (determined as if such credit were allowed for such year without regard to any limitation based on liability for tax).

`(iii) SPECIAL RULES FOR CHILD WITH SPECIAL NEEDS- In the case of an adoption of a child with special needs (as defined in section 23(d)(3))--

`(I) subclauses (I) and (II) of clause (i) shall not apply, and

`(II) a distribution during the applicable period from an individual retirement plan with respect to such adoption shall not be taken into account under this subparagraph to the extent that such distribution, when added to all other distributions with respect to such adoption from individual retirement plans for the applicable period, exceeds $10,000.

For purposes of subclause (II), the term `applicable period' means the 3-taxable year period beginning with the taxable year in which such adoption becomes final.

`(iv) ORDERING RULE- Distributions shall not be taken into account under clause (i) if such distributions are described in subparagraph (A), (C), (D), (E), (F), or (G) or to the extent paragraph (1) does not apply to such distributions by reason of subparagraph (B).'.

(b) Effective Date- The amendment made by this section shall apply to distributions after the date of the enactment of this Act.