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S. 1889: Compassionate Retirement Act of 2021


The text of the bill below is as of May 27, 2021 (Introduced).


II

117th CONGRESS

1st Session

S. 1889

IN THE SENATE OF THE UNITED STATES

May 27, 2021

(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.

1.

Short title

This Act may be cited as the Kathryn Manginelli Act of 2021 or the Compassionate Retirement Act of 2021.

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:

(I)

Terminal illness

(i)

In general

Distributions which are made to the employee who is a terminally ill individual on or after the date on which such employee has been certified by a physician as having a terminal illness.

(ii)

Definition

For purposes of this subparagraph, the term terminally ill individual has the same meaning given such term under section 101(g)(4)(A), except that 84 months shall be substituted for 24 months.

(iii)

Documentation

For purposes of this subparagraph, an employee shall not be considered to be a terminally ill individual 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.