Compassionate Retirement Act of 2021

Bill: 117-s-1889
Sponsor: full_name: Sen. Burr, Richard [R-NC]
Introduced: 2021-05-27
Policy area: Taxation
Subjects: Employee benefits and pensions

Income tax deferral

Income tax exclusion

Long-term, rehabilitative, and terminal care
Latest action: action_date: 2021-05-27
text: Read twice and referred to the Committee on Finance.

Summaries:
action_date: 2021-05-27
action_desc: Introduced in Senate
text: <p><strong>Kathryn Manginelli Act of 2021 or the Compassionate Retirement Act of 2021</strong></p> <p>This bill allows premature distributions, without penalty, from tax-exempt retirement plans that are made to an individual who is certified by a physician as terminally ill. It also modifies the definition of <em>terminally ill individual</em> to increase from 24 to 84 the number of months after certification that an individual's illness can reasonably be expected to result in death.</p>

tv_txt: II 117th CONGRESS 1st Session S. 1889 IN THE SENATE OF THE UNITED STATES May 27, 2021 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.

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.