Certificate of Terminal
Illness for Exception to the 10% Additional Tax
New
collection (Request for a new OMB Control Number)
No
Emergency
12/20/2023
12/18/2023
Requested
Previously Approved
6 Months From Approved
500
0
125
0
0
0
Section 72(t)(1) generally imposes a
10 percent additional tax on any distribution from a qualified
retirement plan within the meaning of section 4974(c), unless the
distribution qualifies for one of the exceptions listed in section
72(t)(2). Section 72(t)(2)(L)(iii) provides that, in order to be
considered a terminally ill individual, an employee must furnish
sufficient evidence to the plan administrator. This information
will be used by a plan administrator to determine whether an
individual is eligible for a terminal illness distribution and thus
eligible for the exception to the 10 percent additional tax under
section 72(t)(2)(L).
The Department of the
Treasury (Treasury) and the Internal Revenue Service (IRS) are
requesting an OMB Control Number under emergency procedures in
connection with provision §§ 326 of Division T of the Consolidated
Appropriations Act, 2023, Pub. L. 117-328, 136 Stat. 4459 (2023),
known as the Setting Every Community Up for Retirement Enhancement
Act of 2022 (SECURE 2.0 Act) on December 29, 2022. Treasury and IRS
will issue a notice providing guidance on various sections of the
SECURE 2.0 Act. Background on the Collection Section 72(t)(1) of
the Code generally imposes a 10 percent additional tax on any
distribution from a qualified retirement plan within the meaning of
§ 4974(c), unless the distribution qualifies for one of the
exceptions listed in § 72(t)(2). Section 326 of the SECURE 2.0 Act,
amended § 72(t)(2) of the Code to add a new exception to the 10
percent additional tax for any distribution made to a terminally
ill individual. Section 72(t)(2)(L) permits an employee who is a
terminally ill individual to receive a distribution (terminally ill
distribution) on or after the date on which the employee has been
certified by a physician as having a terminal illness. Section
72(t)(2)(L)(iii) provides that, in order to be considered a
terminally ill individual, an employee must furnish sufficient
evidence to the plan administrator in such form and manner as the
Secretary of the Treasury may require. A terminally ill
distribution is includible in gross income but is not subject to
the 10 percent additional tax under § 72(t)(1). Section 326 applies
to distributions made by terminally ill individual after December
29, 2022. Information Being Collected As required by section 326 of
the SECURE 2.0 Act, the notice provides that a written
certification of terminal illness from a physician must be provided
to the plan administrator and include the following: (1) a
statement that the individual’s illness or physical condition that
can be reasonably expected to result in death in 84 months or less;
(2) a narrative description of the evidence that was used to
support the statement of illness or physical condition; (3) the
name and contact information of the physician making the statement;
(4) the date the physician examined the individual or reviewed the
evidence provided by the individual, and the date that the
certification is signed by the physician; and (5) the signature of
the physician making the statement, and an attestation from the
physician that, by signing the form, the physician confirms that
the physician composed the narrative description based on the
physician’s examination of the individual or the physician’s review
of the evidence provided by the individual. Request Section 326 of
the SECURE 2.0 Act is effective for plan years beginning after
December 29, 2022. Because many plans are calendar year plans,
these provisions are currently effective for many employers and
employees. Therefore, employers may now offer financial incentives,
and terminally ill taxpayers may now take terminally ill
distributions. Taxpayers need immediate guidance as to how to
satisfy the Code requirements. Therefore, due to the extraordinary
circumstances for implementing §§ 326 of the SECURE 2.0 Act,
Treasury, and IRS request emergency processing of this information
collection request by December 20. Given the inability to seek
public comment during such a short timeframe, IRS also respectfully
requests a waiver from the requirement to publish a notice in the
Federal Register seeking public comment during the period of Office
of Management and Budget review. However, public comment will be
solicited in the notice in conjunction with the subsequent approval
to collect this information.
US Code:
26 USC
72 Name of Law: Annuities; certain proceeds of endowment and
life insurance contracts
PL: Pub.L. 117 - 328 326 Name of Law: SECURE
2.0 Act of 2022
This is a new collection due to
enactment of Section 326 of the SECURE 2.0 Act.
$0
No
No
No
No
No
No
No
Andre's Garcia 202
317-4542
No
On behalf of this Federal agency, I certify that
the collection of information encompassed by this request complies
with 5 CFR 1320.9 and the related provisions of 5 CFR
1320.8(b)(3).
The following is a summary of the topics, regarding
the proposed collection of information, that the certification
covers:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a
benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control
number;
If you are unable to certify compliance with any of
these provisions, identify the item by leaving the box unchecked
and explain the reason in the Supporting Statement.
Emergency Justification - SECURE Act 2.0.docx
Notice 2024-2