# 114-hr-4972: Expanding Penalty Free Withdrawal Act of 2016

114-hr-4972, Expanding Penalty Free Withdrawal Act of 2016, is a 114th Congress bill sponsored by Rep. Watson Coleman, Bonnie [D-NJ-12] (D-NJ); status Referred to the House Committee on Ways and Means. (as of 2025-11-18).

- Canonical: https://policyrisk.com/legislation/114-hr-4972
- As of: 2025-11-18
- Plain-text twin of the page above; the HTML and this file carry the same facts.

## Facts
- Bill: 114-hr-4972
- Congress: 114
- Title: Expanding Penalty Free Withdrawal Act of 2016
- Status: Referred to the House Committee on Ways and Means.
- Introduced: 2016-04-15
- Sponsor: Rep. Watson Coleman, Bonnie [D-NJ-12] (D-NJ)
- Cosponsors: 0
- Policy area: Taxation
- Touches household money: no
- Last recorded action: 2025-11-18

## Summary

Expanding Penalty Free Withdrawal Act of 2016 This bill amends the Internal Revenue Code to expand the exceptions that permit penalty-free distributions to unemployed individuals from retirement plans. The 10% additional tax on early distributions from retirement plans does not apply to an individual after separation from employment if: (1) the individual has received federal or state unemployment compensation for 26 consecutive weeks or, if less, the maximum period available under state law, and (2) the distributions are made during the year or the succeeding year in which the compensation is paid. The exception is limited to the lesser of: (1) $50,000 from all plans of the individual over a one-year period, or (2) the greater of $10,000 or one-half of the fair market value of the individual's retirement plans and the nonforfeitable portion of the individual's defined contribution plans. The exception does not apply to distributions that are: (1) included in the existing exception for distributions to unemployed individuals for health insurance premiums, or (2) are made after the individual has been employed for at least 60 days after the separation.

## Related bills

- 114-hr-6525: Lead-free Students Act
- 114-hr-6446: Student Borrower HELP Act of 2016
- 114-hr-6434: FIRST Cap Profits Act of 2016
- 114-hr-6318: Fair Pay for Presidential Protection Act
- 114-hr-6293: Fair SHARE Act of 2016
- 114-hr-6211: Fair Housing for Domestic Violence and Sexual Assault Survivors Act of 2016

## Sources
- [114-hr-4972 on Congress.gov](https://www.congress.gov/bill/114th-congress/house-bill/4972)

## Related
- [114-hr-6525: Lead-free Students Act](https://policyrisk.com/legislation/114-hr-6525)
- [114-hr-6446: Student Borrower HELP Act of 2016](https://policyrisk.com/legislation/114-hr-6446)
- [114-hr-6434: FIRST Cap Profits Act of 2016](https://policyrisk.com/legislation/114-hr-6434)
- [114-hr-6318: Fair Pay for Presidential Protection Act](https://policyrisk.com/legislation/114-hr-6318)
- [114-hr-6293: Fair SHARE Act of 2016](https://policyrisk.com/legislation/114-hr-6293)
- [114-hr-6211: Fair Housing for Domestic Violence and Sexual Assault Survivors Act of 2016](https://policyrisk.com/legislation/114-hr-6211)
- [All bills in Congress](https://policyrisk.com/legislation)

Source: PRIA, https://policyrisk.com/legislation/114-hr-4972 (as of 2025-11-18).