S. 2495 — Introduced in Senate

II 116th CONGRESS 1st Session S. 2495 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. 1. Short title This Act may be cited as the Kathryn Manginelli Act of 2019 or the Compassionate Retirement Act of 2019. 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) In general 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.