S. 2495 - Kathryn Manginelli Act of 2019 - Compassionate Retirement Act of 2019

116TH CONGRESS
1ST SESSION

S. 2495

To amend the Internal Revenue Code of 1986 to establish
an exception to the penalty on early distributions from qualified plans
for individuals diagnosed with certain terminal illnesses.

IN THE SENATE OF THE UNITED STATES

SEPTEMBER 18, 2019

Mr. BURR (for himself and Mr. BENNET) 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 establish an exception to the penalty on early distributions from qualified plans for individuals diagnosed with certain terminal illnesses.

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

SECTION 1. SHORT TITLE.

This Act may be cited as the "Kathryn Manginelli Act of 2019" or the "Compassionate Retirement Act of 2019".

SEC. 2. EXCEPTION TO PENALTY ON EARLY DISTRIBUTIONS FROM QUALIFIED PLANS FOR INDIVIDUALS WITH A TERMINAL ILLNESS.

(a) IN GENERAL. — Section 72(t)(2) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:

"(H) TERMINAL ILLNESS. —  

"(i)INGENERAL. — Distributions which are made to the employee on or after the date on which such employee has been diagnosed with a terminal illness.

"(ii) DEFINITION. — For purposes of this subparagraph, the term 'terminal illness' means an illness or physical condition, as diagnosed by a physician (as defined in section 1861(r)(1) of the Social Security Act (42 U.S.C. 1395x(r)(1))), which can reasonably be expected to result in death in 7 years or less after the date of such diagnosis.

"(iii) DOCUMENTATION. — For purposes of this subparagraph, an employee shall not be considered to have been diagnosed with a terminal illness described in clause (i) unless such employee furnishes sufficient evidence in such form and manner as the Secretary may require.".

(b) EFFECTIVE DATE. — The amendment made by this section shall apply to distributions after the date of the enactment of this Act.