[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 1809 Introduced in Senate (IS)]







110th CONGRESS
  1st Session
                                S. 1809

      To amend the Internal Revenue Code of 1986 to provide that 
  distributions from an individual retirement plan, a section 401(k) 
  plan, a section 403(b) contract, or a section 457 plan shall not be 
  includible in gross income to the extent used to pay long-term care 
                          insurance premiums.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                July 18 (legislative day, July 17), 2007

   Mr. Thune 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 provide that 
  distributions from an individual retirement plan, a section 401(k) 
  plan, a section 403(b) contract, or a section 457 plan shall not be 
  includible in gross income to the extent used to pay long-term care 
                          insurance premiums.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Long-Term Care Act of 2007''.

SEC. 2. EXCLUSION FROM GROSS INCOME FOR DISTRIBUTIONS FROM INDIVIDUAL 
              RETIREMENT PLANS, SECTION 401(K) PLANS, SECTION 403(B) 
              CONTRACTS, AND 457 PLANS WHICH ARE USED TO PAY LONG-TERM 
              CARE INSURANCE PREMIUMS.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to items specifically excluded 
from gross income) is amended by inserting after section 139A the 
following new item:

``SEC. 139B. DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT PLANS, SECTION 
              401(K) PLANS, SECTION 403(B) CONTRACTS, AND SECTION 457 
              PLANS WHICH ARE USED TO PAY LONG-TERM CARE INSURANCE 
              PREMIUMS.

    ``(a) In General.--Gross income shall not include any distribution 
to an individual from--
            ``(1) an individual retirement plan, or
            ``(2) amounts attributable to--
                    ``(A) any elective deferrals described in 
                subparagraph (A) or (C) of section 402(g)(3), or
                    ``(B) any elective deferral under an eligible 
                deferred compensation plan (as defined in section 
                457(b)) of an eligible employer described in section 
                457(e)(1)(A),
to the extent that such distributions do not exceed the eligible long-
term care premiums (as defined in section 213(d)(10)) paid during the 
taxable year for insurance covering the individual or the individual's 
spouse.
    ``(b) Denial of Double Benefit.--The limitation in section 
213(d)(10) shall be reduced by the amount which would (but for 
subsection (a)) be includible in the taxpayer's gross income for the 
taxable year.
    ``(c) No Effect on Qualification.--An arrangement shall not fail to 
be treated as a qualified cash or deferred arrangement (as defined in 
section 401(k)), a contract described in section 403(b), or an eligible 
deferred compensation plan (as defined in section 457(b)) by reason of 
permitting distributions for the payment of eligible long-term care 
premiums.''.
    (b) Clerical Amendment.--The table of sections for such part III is 
amended by inserting after the item relating to section 139A the 
following new item:

``Sec. 139B. Distributions from individual retirement plans, section 
                            401(k) plans, and section 403(b) contracts 
                            which are used to pay long-term care 
                            insurance premiums.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to distributions after the date of the enactment of this Act.
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