Long-Term Care Act of 2004

Long-Term Care Act of 2004 - Amends the Internal Revenue Code to exclude from gross income distributions from an individual retirement account and other tax-exempt retirement plans used to pay long-term care insurance premiums.

[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 2918 Introduced in Senate (IS)]

  2d Session
                                S. 2918

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


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                   IN THE SENATE OF THE UNITED STATES

                            October 7, 2004

   Mr. Allen introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

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                                 A BILL


 
      To amend the Internal Revenue Code of 1986 to provide that 
  distributions from an individual retirement plan, a section 401(k) 
  plan, or a section 403(b) contract 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 2004''.

SEC. 2. EXCLUSION FROM GROSS INCOME FOR DISTRIBUTIONS FROM INDIVIDUAL 
              RETIREMENT PLANS, SECTION 401(K) PLANS, AND SECTION 
              403(B) CONTRACTS 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, AND SECTION 403(B) CONTRACTS 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) from amounts attributable to employer contributions 
        made pursuant to elective deferrals described in subparagraph 
        (A) or (C) of section 402(g)(3),
to the extent that such distributions do not exceed the long-term care 
insurance premiums 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)) or a contract described in section 403(b) by reason of 
permitting distributions for the payment of long-term care insurance 
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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