Ley 32 del 2007
Resumen
Esta ley enmienda el Código de Rentas Internas de Puerto Rico para permitir retiros de Cuentas de Retiro Individual (IRA) sin penalidad antes de los 60 años, cuando los fondos se utilizan para el tratamiento de enfermedades graves, crónicas, degenerativas y terminales de un familiar hasta el cuarto grado de consanguinidad y segundo de afinidad.
Contenido
(No. 32)
(Approved April 5, 2007)
AN ACT
To add a subclause (F) to clause (2) of subsection
(g) of Section 1169 of Act No. 120 of October 31, 1994, as amended, known as the "Puerto Rico Internal Revenue Code," in order to exclude from the application of the ten (10)-percent penalty any distributions of funds from Individual Retirement Accounts (IRAs) withdrawn before the age of sixty (60), when these funds are withdrawn for the treatment of severe, chronic, degenerative and terminal illnesses of a family member, for up to the fourth degree of consanguinity and second degree of affinity.
STATEMENT OF MOTIVES
Individual Retirement Accounts (IRAs) play an essential part in the economy of many Puerto Rican families because of tax benefits and due to the fact that they constitute an excellent means to generate long-term savings. In spite of the tax benefits and advantages these accounts provide on a short-term basis, it is not less true that these accounts have their limitations, such as a ten (10)-percent penalty on distributions when funds are withdrawn before reaching the age of sixty (60), with the exception of certain circumstances, such as in cases of disability, the loss of a job, college tuition expenses for direct dependents, the acquisition or construction of a first main residence, or the repair or reconstruction of the main residence when affected by fire, a hurricane, an earthquake, or another natural cause.
The excepting circumstances mentioned above fail to include cases of treatment for severe, chronic or degenerative diseases, which most indubitably entail the expenditure of large sums for the treatment or treatments required by the patient or his/her relatives. Once a person has been diagnosed with a major disease, his/her social and financial conditions change completely; his/her primary efforts are focused on restoring his/her health, both physical and emotional.
Being aware of the need for financial resources of such a person and his/her relatives in order to tend to a situation such as the one described above, this Legislature believes it necessary for the withdrawal of Individual Retirement Accounts funds not to be penalized when these funds are to be used for the treatment of severe, chronic or degenerative diseases or to tend to the effects ensuing from these, such as expenses on account of medications, surgeries, therapies, medical-related trips, and all other matters directly related or otherwise relative to the disease.
BE IT ENACTED BY THE LEGISLATURE OF PUERTO RICO:
Section 1.-A new subclause (E) [sic] is hereby added to clause (2) of subsection
(g) of Section 1169 of Act No. 120 of October 31, 1994, as amended, to read as follows: "Section 1169.—Individual Retirement Accounts.—
(a) ...
(g) (1) ... (2) (A) ... (F) In those cases in which the taxpayer withdraws the funds for the treatment of severe, chronic, degenerative and terminal illness of any family member, up to the fourth degree of consanguinity and second degree of affinity. For purposes of
this Section, a severe, chronic, degenerative and terminal illness is a disease whose foreseeable effect, as certified by a physician, is the loss of life or the permanent physical disability of the patient."
Section 2.—This Act shall take effect immediately after its approval.
CERTIFICATION
I hereby certify to the Secretary of State that the following Act No. 32 (S.B. 919) of the $5^{ ext {th }}$ Session of the $15^{ ext {th }}$ Legislature of Puerto Rico:
AN ACT to add a subclause (F) to clause (2) of subsection
(g) of Section 1169 of Act No. 120 of October 31, 1994, as amended, known as the "Puerto Rico Internal Revenue Code," in order to exclude from the application of the ten (10)-percent penalty any distributions of funds from Individual Retirement Accounts (IRAs) withdrawn before the age of sixty (60), when these funds are withdrawn for the treatment of severe, chronic, degenerative and terminal illnesses of a family member, for up to the fourth degree of consanguinity and second degree of affinity, has been translated from Spanish to English and that the English version is correct.
In San Juan, Puerto Rico, today $30^{ ext {th }}$ of August of 2007.
Francisco J. Domenech Director