Bill > HR3899

This bill allows current or former employees of commercial passenger airlines who received payments from their airline due to bankruptcy proceedings filed between September 11, 2001, and January 1, 2007, to roll over these "airline payment amounts" into a traditional Individual Retirement Account (IRA) tax-free within 180 days of receiving the payment or the bill's enactment, whichever is later. It also permits those who previously rolled such amounts into a Roth IRA to transfer them to a traditional IRA within 180 days of the bill's enactment, also tax-free, and allows for refunds if taxes were previously paid on these amounts. The bill sets an overall limit on the total amount that can be transferred to traditional IRAs, generally 90% of the total airline payment amounts received. Importantly, this provision does not apply to executives who held certain positions with the airline. The bill defines "airline payment amount" as money or property paid by an airline in bankruptcy for claims, notes, or other fixed obligations, excluding payments based on future earnings. A "qualified airline employee" is defined as someone who participated in a specific type of defined benefit pension plan that was terminated or restricted. The bill also clarifies that these payments will still be considered wages for employment tax purposes in the year they were paid, even if excluded from gross income. Surviving spouses are also granted the same rollover rights as the deceased employee.