basically. If you’ve collected on unemployment checks and are still unemployed. you can withdraw 50k/year in your 401k/ira penalty free.
http://www.cnbc.com/id/102454775
this shoulda been done a logn time ago like during the the crisis. this would incentivize saving/investing. gives a tax break to the middle class at the present date. and helps out individuals that are unemployed. this would turn the 401k. w00t a tax deferred emergency piggy bank.
^I want to clarify–this is not current tax law. This is one of Obama’s proposals for 2016.
And it’s unlikely to pass, simply because there’s lots of other stuff in the bill that the Republicans probably won’t like. (Such as caps on IRA’s/401k’s, limits on deductability, limits on the backdoor Roth, etc.)
I did think that one of the laws that would be passed in the years after the Financial Crisis was a provision saying that if you had withdrawn money from IRA or 401k to survive on (being unemployed for more than X months, and having other income sources compose no more than say 1/3 of total income, you would be able to replenish that amount tax-free, and perhaps be able to use the penalties paid on withdrawals going forward.
It seemed like a reasonable modification to acknowledge the unusual severity of the crisis.