[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3600 Introduced in House (IH)]







105th CONGRESS
  2d Session
                                H. R. 3600

   To amend the Internal Revenue Code of 1986 to allow penalty-free 
withdrawals from retirement plans to provide medical care for relatives 
                     who are 55 years old or older.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 30, 1998

  Mr. Saxton introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
   To amend the Internal Revenue Code of 1986 to allow penalty-free 
withdrawals from retirement plans to provide medical care for relatives 
                     who are 55 years old or older.

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

SECTION 1. PENALTY-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT PLANS, 
              401(K) PLANS, ETC. FOR MEDICAL CARE FOR QUALIFIED 
              RELATIVES.

    (a) Unlimited Penalty-Free Distributions for Medical Care for 
Relatives.--Subparagraph (B) of section 72(t)(2) is amended to read as 
follows:
                    ``(B) Medical expenses.--Distributions made to the 
                employee (other than distributions described in 
                subparagraph (A), (C), or (D)) to the extent such 
                distributions do not exceed the qualified medical 
                expenses (as defined in paragraph (9)) of the taxpayer 
                for the taxable year.''.
    (b) Definition of Qualified Medical Expenses.--Subsection (t) of 
section 72 of such Code (relating to 10-percent additional tax on early 
distributions from qualified retirement plans) is amended by adding at 
the end the following new paragraph:
            ``(9) Qualified medical expenses.--For purposes of 
        paragraph (2)(B)--
                    ``(A) In general.--The term `qualified medical 
                expenses' means expenses that would be allowable to the 
                taxpayer as a deduction under section 213 for amounts 
                paid during the taxable year for medical care for a 
                qualified relative, determined--
                            ``(i) without regard to whether the 
                        taxpayer itemizes deductions for such taxable 
                        year, and
                            ``(ii) in the case of a qualified relative 
                        who has attained age 55 before the close of the 
                        taxable year, without regard to whether the 
                        qualified relative is a dependent of the 
                        taxpayer.
                    ``(B) Qualified relative.--The term `qualified 
                relative' means an individual who--
                            ``(i) bears a relationship to the taxpayer 
                        described in any of paragraphs (1) through (8) 
                        of section 152(a), or
                            ``(ii) is the spouse of an individual 
                        described in paragraph (7) of such section.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1997.
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