PRINTER'S NO. 1526
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1306
Session of
2019
INTRODUCED BY MURT, ISAACSON, JAMES, CALTAGIRONE, NEILSON,
READSHAW, ZABEL AND ROZZI, APRIL 25, 2019
REFERRED TO COMMITTEE ON FINANCE, APRIL 25, 2019
AN ACT
Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
act relating to tax reform and State taxation by codifying
and enumerating certain subjects of taxation and imposing
taxes thereon; providing procedures for the payment,
collection, administration and enforcement thereof; providing
for tax credits in certain cases; conferring powers and
imposing duties upon the Department of Revenue, certain
employers, fiduciaries, individuals, persons, corporations
and other entities; prescribing crimes, offenses and
penalties," in personal income tax, providing for retirement
plan withdrawal tax exemption for student loan debt; and
abrogating regulations.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of March 4, 1971 (P.L.6, No.2), known as
the Tax Reform Code of 1971, is amended by adding a section to
read:
Section 304.3. Retirement Plan Withdrawal Tax Exemption for
Student Loan Debt.--(a) An individual may make a one-time
withdrawal from a retirement plan under section 401(k) of the
Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. ยง
401(k)) which shall be exempt from all taxation by the
Commonwealth and its political subdivisions if:
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(1) The withdrawal is used for the purposes of paying
student loan debt of a family member.
(2) The withdrawal does not exceed twenty-five per cent of
the balance of the retirement plan.
(b) As used in this section, the following words and phrases
shall have the meanings given to them in this subsection unless
the context clearly indicates otherwise:
"Family member." A spouse, domestic partner, child,
stepchild, daughter-in-law, son-in-law, sibling, parent,
grandparent, grandchild, stepsibling, stepparent, mother-in-law,
father-in-law, brother-in-law, sister-in-law, aunt, uncle,
niece, nephew, ward, guardian or legal guardian.
"Student loan debt." Money owed that was used to pay for
educational expenses, including tuition, fees, books, supplies
or equipment required for enrollment or attendance at an
institution included under Title IV of the Higher Education Act
of 1965 (Public Law 89-329, 78 Stat. 1219), and expenses for
special needs services, as well as room and board for students
who are enrolled at least part time at a college or university.
Section 2. All regulations are abrogated to the extent of
any inconsistency with the provisions of this act.
Section 3. This act shall take effect in 60 days.
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