Bush Signs 401(k) Tax Suspension Bill into Law
U.S. Rep. George Miller, D-Calif. and chairman of the House Education and Labor Committee, said a bill signed into law today by President George W. Bush is a big relief for seniors who have 401(k)-style retirement plans because the bill suspends for a year the IRS tax penalty on Americans age 70 1/2 or older who fail to withdraw a minimum amount of money each year. The bill affects 2009 withdrawals only.
The Worker, Retiree and Employer Recovery Act, H.R. 7327, was introduced by Miller, committee Ranking Member Howard "Buck" McKeon, R-Calif., and Reps. Charles Rangel, D-N.Y., and Jim McCrery, R-La. The suspension will be available to everyone regardless of their retirement account balances, Miller said in a statement posted on the committee's Web site.
"Americans have seen trillions of dollars evaporate from their retirement accounts over the last few months as a result of our economic crisis," he said. "Congress worked swiftly, and in a bipartisan way, in order to provide important relief to seniors who may face a steep tax if they do not make a withdrawal from their depleted retirement accounts."