1. Special rules for use of retirement funds by Federal employees and contractors affected by a lapse in appropriations (a) Waiver of 10 percent tax on early distributions Section 72(t) of the Internal Revenue Code of 1986 shall not apply to any qualified furlough distribution. (b) Income inclusion spread over 2-Year period In the case of any qualified furlough distribution, unless the taxpayer elects not to have this subsection apply for any taxable year, any amount required to be included in gross income for such taxable year shall be so included ratably over the 2-taxable-year period beginning with such taxable year. (c) Amount distributed may be repaid (1) In general Any individual who receives a qualified furlough distribution may, at any time during the 1-year period beginning on the day after the date on which such distribution was received, make 1 or more contributions in an aggregate amount not to exceed the amount of such distribution to an eligible retirement plan of which such individual is a beneficiary and to which a rollover contribution of such distribution could be made under section 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16) of the Internal Revenue Code of 1986, as the case may be. (2) Treatment of repayments of distributions from eligible retirement plans other than IRAs For purposes of the Internal Revenue Code of 1986, if a contribution is made pursuant to paragraph (1) with respect to a qualified furlough distribution from an eligible retirement plan other than an individual retirement plan, then the taxpayer shall, to the extent of the amount of the contribution, be treated as having received the qualified furlough distribution in an eligible rollover distribution (as defined in section 402(c)(4) of such Code) and as having transferred the amount to the eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution. (3) Treatment of repayments for distributions from IRAs For purposes of the Internal Revenue Code of 1986, if a contribution is