PRINTER'S NO. 3456
No. 2543 Session of 1998
INTRODUCED BY STETLER, TRELLO, PESCI, DeWEESE, WASHINGTON,
SAINATO, CALTAGIRONE, SHANER, HALUSKA, EACHUS, COLAFELLA,
MANDERINO, PETRONE, COY, MICHLOVIC, BISHOP, VAN HORNE,
GRUITZA, MYERS, M. COHEN, LLOYD, MELIO, CASORIO, McCALL,
GEORGE, JAROLIN, ITKIN, BLAUM, STURLA, C. WILLIAMS, SURRA,
MUNDY, STEELMAN, ROONEY, KAISER, GIGLIOTTI, RAMOS, EVANS,
ROBERTS, LEVDANSKY, HORSEY, LAUGHLIN, TIGUE, YEWCIC, JAMES,
YOUNGBLOOD, STABACK, VEON, BELFANTI, COWELL, LUCYK, BATTISTO,
SANTONI, PISTELLA, A. H. WILLIAMS, TRICH, GORDNER, DeLUCA,
LaGROTTA, OLIVER, BELARDI, CAPPABIANCA, LESCOVITZ, COLAIZZO,
HARHAI, ROEBUCK AND CURRY, APRIL 22, 1998
REFERRED TO COMMITTEE ON FINANCE, APRIL 22, 1998
AN ACT
1 Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
2 act relating to tax reform and State taxation by codifying
3 and enumerating certain subjects of taxation and imposing
4 taxes thereon; providing procedures for the payment,
5 collection, administration and enforcement thereof; providing
6 for tax credits in certain cases; conferring powers and
7 imposing duties upon the Department of Revenue, certain
8 employers, fiduciaries, individuals, persons, corporations
9 and other entities; prescribing crimes, offenses and
10 penalties," further defining "compensation" for personal
11 income tax purposes to exclude certain distributions
12 transferred from individual retirement accounts into Roth
13 Individual Retirement Accounts.
14 The General Assembly of the Commonwealth of Pennsylvania
15 hereby enacts as follows:
16 Section 1. Section 301(d) of the act of March 4, 1971
17 (P.L.6, No.2), known as the Tax Reform Code of 1971, amended May
18 7, 1997 (P.L.85, No.7), is amended to read:
19 Section 301. Definitions.--The following words, terms and
1 phrases when used in this article shall have the meaning
2 ascribed to them in this section except where the context
3 clearly indicates a different meaning. Unless specifically
4 provided otherwise, any reference in this article to the
5 Internal Revenue Code shall include the Internal Revenue Code of
6 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.), as amended to
7 January 1, 1997:
8 * * *
9 (d) "Compensation" means and shall include salaries, wages,
10 commissions, bonuses and incentive payments whether based on
11 profits or otherwise, fees, tips and similar remuneration
12 received for services rendered, whether directly or through an
13 agent, and whether in cash or in property.
14 The term "compensation" shall not mean or include: (i)
15 periodic payments for sickness and disability other than regular
16 wages received during a period of sickness or disability; or
17 (ii) disability, retirement or other payments arising under
18 workmen's compensation acts, occupational disease acts and
19 similar legislation by any government; or (iii) payments
20 commonly recognized as old age or retirement benefits paid to
21 persons retired from service after reaching a specific age or
22 after a stated period of employment, including distributions
23 transferred from an existing individual retirement account into
24 a Roth Individual Retirement Account; or (iv) payments commonly
25 known as public assistance, or unemployment compensation
26 payments by any governmental agency; or (v) payments to
27 reimburse actual expenses; or (vi) payments made by employers or
28 labor unions, including payments made pursuant to a cafeteria
29 plan qualifying under section 125 of the Internal Revenue Code
30 of 1986 (Public Law 99-514, 26 U.S.C. § 125), for employe
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1 benefit programs covering hospitalization, sickness, disability
2 or death, supplemental unemployment benefits or strike benefits:
3 Provided, That the program does not discriminate in favor of
4 highly compensated individuals as to eligibility to participate,
5 payments or program benefits; or (vii) any compensation received
6 by United States servicemen serving in a combat zone; or (viii)
7 payments received by a foster parent for in-home care of foster
8 children from an agency of the Commonwealth or a political
9 subdivision thereof or an organization exempt from Federal tax
10 under section 501(c)(3) of the Internal Revenue Code of 1954
11 which is licensed by the Commonwealth or a political subdivision
12 thereof as a placement agency; or (ix) payments made by
13 employers or labor unions for employe benefit programs covering
14 social security or retirement.
15 * * *
16 Section 2. This act shall apply to all transfers occurring
17 on or after January 1, 1998.
18 Section 3. This act shall take effect immediately.
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