A bill to amend the Internal Revenue Code of 1986 to exclude certain severance payment amounts from income.

Amends the Internal Revenue Code to exclude from gross income up to $5,000 of any "qualified severance payment." Defines such payment. Excludes from such definition payments exceeding $125,000.

[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1332 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                S. 1332

To amend the Internal Revenue Code of 1986 to exclude certain severance 
                      payment amounts from income.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             August 2, 2001

Mr. Torricelli introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to exclude certain severance 
                      payment amounts from income.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. EXCLUSION FROM INCOME OF SEVERANCE PAYMENT AMOUNTS.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to items specifically excluded 
from gross income) is amended by redesignating section 139 as section 
140 and by inserting after section 138 the following:

``SEC. 139. SEVERANCE PAYMENTS.

    ``(a) In General.--In the case of an individual, gross income shall 
not include any qualified severance payment.
    ``(b) Limitation.--The amount to which the exclusion under 
subsection (a) applies shall not exceed $5,000 with respect to any 
separation from employment.
    ``(c) Qualified Severance Payment.--For purposes of this section--
            ``(1) In general.--The term `qualified severance payment' 
        means any payment received by an individual if--
                    ``(A) such payment was paid by such individual's 
                employer on account of such individual's separation 
                from employment,
                    ``(B) such separation was in connection with a 
                reduction in the work force of the employer, and
                    ``(C) such individual does not attain employment 
                within 6 months of the date of such separation in which 
                the amount of compensation is equal to or greater than 
                95 percent of the amount of compensation for the 
                employment that is related to such payment.
            ``(2) Limitation.--Such term shall not include any payment 
        received by an individual if the aggregate payments received 
        with respect to the separation from employment exceed 
        $125,000.''.
    (b) Clerical Amendment.--The table of sections for part III of 
subchapter B of chapter 1 of the Internal Revenue Code of 1986 is 
amended by striking the item relating to section 139 and inserting the 
following:

                              ``Sec. 139. Severance payments.
                              ``Sec. 140. Cross references to other 
                                        Acts.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2001.
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