Thursday, November 10, 2005

House Passes Potential Modification of Tax Law for Pensions

The House Ways and Means Committee passed a $70 million bill related to tax provisions affecting pension and retirement plans. Among provisions are indefinite extension of certain IRA legislation passed in 2001, allow National Guardsmen to withdraw IRS contributions early without penalty if on active duty, exclude combat pay from gross income in determining whether taxpayer is eligible for IRA and allow direct deposit to IRAs. Additionally, it would allow up to $500 of "use it or lose it" medical flexible spending accounts to be carried forward and modify rules for defined benefit pensions.


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