To amend the Internal Revenue Code of 1986 to treat certain price protection payments as eligible rollover distributions, and for other purposes.

This bill amends the Internal Revenue Code to treat certain price protection payments as eligible rollover distributions from retirement plans, and addresses related tax rules.

Sec. 1, Price protection payments treated as eligible rollover distributions: The bill modifies tax law so that price protection payments made under an employee stock ownership plan (ESOP) can be treated as eligible rollover distributions. For payments before 2025, this applies if the payment is made after December 12, 2019, under a price protection agreement for a participant separating due to retirement, death, or disability. For payments after 2024, it applies if the agreement is part of an ESOP, covers any separation of service, and pays upon plan distributions. The bill defines a price protection agreement as one between an employer and ESOP trustee for payments on stock distributions after an exempt loan, and a price protection payment as an amount paid within a specified period (up to 5 years or loan life) equal to the excess of fair market value at distribution over value without the loan.

Sec. 2, Price protection agreements not considered discriminatory: The bill adds that a plan is not considered discriminatory under tax rules just because it has a price protection agreement that favors highly compensated employees.

Sec. 3, Price protection payments not taken into account for deduction limits: The bill states that price protection payments are not subject to certain deduction limits for employer contributions.

Sec. 4, Effective dates: The changes for treating payments as rollover distributions apply to amounts paid after December 12, 2019. The changes for nondiscrimination and deduction limits apply to amounts paid in plan years ending after December 31, 2024.