Fertility Cost Relief Act

This legislative proposal aims to alleviate the financial burden of fertility treatments by creating an exemption from the 10% early withdrawal tax on distributions from certain retirement plans. Specifically, it allows individuals to use funds from applicable eligible retirement plans, excluding defined benefit plans, to cover qualified fertility treatment expenses for themselves, their spouse, or domestic partner. The bill sets a lifetime dollar limitation of $20,000 for these tax-exempt distributions, with this amount subject to inflation adjustments starting in 2026. Qualified expenses encompass a broad range of services, including the preservation of reproductive materials, various forms of artificial insemination, assisted reproductive technologies like in vitro fertilization, genetic testing of embryos, fertility medications, and gamete donation. To qualify for the exemption, the distributed funds must be used within one year of receipt. The legislation also includes provisions for the repayment of these distributions, similar to rules for birth or adoption distributions, and clarifies that plans will not be penalized for treating these as qualified distributions. This measure applies to distributions made after December 31, 2025.