‘(a) In General- In the case of an individual who is separated from employment as a result of a reduction in force of the employer, gross income shall not include--
‘(1) the last regular payment of wages (as defined in section 3121) or compensation (as defined in section 3231), as the case may be, for service performed before such separation, and
‘(2) any severance amount received in connection with such separation.
‘(b) Employment Taxes- Amounts excluded from gross income under subsection (a) shall not be taken into account as wages for purposes of subtitle C.
‘(c) Severance Amount- For purposes of this section, severance amount includes--
‘(1) any amount based on months of service which is not in the nature of retirement,
‘(2) any amount in lieu of unused vacation time or sick leave,
‘(3) any amount in lieu of a required notice period, and
‘(4) any stock option offered as part of a severance package.’.
(b) Trust Funds Held Harmless- There is hereby appropriated (out of any money in the Treasury not otherwise appropriated) for each fiscal year to each employment-related fund an amount equal to the reduction in the transfers to such fund for such fiscal year by reason of the amendment made by subsection (a). For purposes of the preceding sentence, the term ‘employment-related fund’ means a fund the contributions to which are determined in relation to taxes imposed under subtitle C of the Internal Revenue Code of 1986.
(c) Clerical Amendment- The table of sections for part III of subchapter B of chapter 1 of such Code is amended by inserting after the item relating to section 139B the following new item:
(d) Effective Date- The amendment made by this section shall apply to amounts received after December 31, 2007.
U.S. Congress - Text of H.R.1312 as Introduced in House Unemployed Tax Relief Act of 2009
