Kathryn Manginelli Act of 2019

II 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 ter- minal illnesses. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Kathryn Manginelli 4 Act of 2019’’ or the ‘‘Compassionate Retirement Act of 5 2019’’. 6 VerDate Sep 11 2014 20:56 Sep 20, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2495.IS S2495 kjohnson on DSK79L0C42 with BILLS 2 •S 2495 IS SEC. 2. EXCEPTION TO PENALTY ON EARLY DISTRIBUTIONS 1 FROM QUALIFIED PLANS FOR INDIVIDUALS 2 WITH A TERMINAL ILLNESS. 3 (a) IN GENERAL.—Section 72(t)(2) of the Internal 4 Revenue Code of 1986 is amended by adding at the end 5 the following new subparagraph: 6 ‘‘(H) TERMINAL ILLNESS.— 7 ‘‘(i) IN GENERAL.—Distributions 8 which are made to the employee on or 9 after the date on which such employee has 10 been diagnosed with a terminal illness. 11 ‘‘(ii) DEFINITION.—For purposes of 12 this subparagraph, the term ‘terminal ill- 13 ness’ means an illness or physical condi- 14 tion, as diagnosed by a physician (as de- 15 fined in section 1861(r)(1) of the Social 16 Security Act (42 U.S.C. 1395x(r)(1))), 17 which can reasonably be expected to result 18 in death in 7 years or less after the date 19 of such diagnosis. 20 ‘‘(iii) DOCUMENTATION.—For pur- 21 poses of this subparagraph, an employee 22 shall not be considered to have been diag- 23 nosed with a terminal illness described in 24 clause (i) unless such employee furnishes 25 VerDate Sep 11 2014 20:56 Sep 20, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2495.IS S2495 kjohnson on DSK79L0C42 with BILLS 3 •S 2495 IS sufficient evidence in such form and man- 1 ner as the Secretary may require.’’. 2 (b) EFFECTIVE DATE.—The amendment made by 3 this section shall apply to distributions after the date of 4 the enactment of this Act. 5 Æ VerDate Sep 11 2014 20:56 Sep 20, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6301 E:\BILLS\S2495.IS S2495 kjohnson on DSK79L0C42 with BILLS