Fertility Cost Relief Act
- Sponsor
- Rep. Levin, Mike [D-CA-49]
- Committees
- Ways and Means Committee (primary)
- Last action
- Jul 16, 2026
Bottom line
The bill aims to alleviate the financial burden of fertility treatments by allowing penalty-free access to retirement savings, potentially at the cost of long-term retirement security.
What it actually does
This bill amends the Internal Revenue Code of 1986 to allow individuals to withdraw up to $20,000 (adjusted for inflation) from their retirement plans without incurring the usual 10% early withdrawal penalty. These penalty-free distributions must be used to cover qualified fertility treatment expenses for the individual, their spouse, or domestic partner. The bill also defines a broad range of fertility treatments that qualify for this exemption.
Proponents argue
Supporters argue that the high costs of fertility treatments, which are often not covered by insurance, create significant financial barriers for individuals and couples seeking to build families. They contend that allowing penalty-free withdrawals from retirement accounts provides a crucial financial lifeline, making these essential medical procedures more accessible and aligning with other life event exemptions for early withdrawals.
Opponents contend
Critics might argue that while the intent to support families is laudable, encouraging early withdrawals from retirement accounts undermines the fundamental purpose of these plans: ensuring financial security in old age. They may contend that this bill could exacerbate the retirement savings crisis, particularly for those who are already struggling to save, and that alternative funding mechanisms for fertility treatments should be explored that do not compromise long-term financial stability.
The bill is short and focused, making it accessible for a reader to understand its core provisions within a reasonable timeframe.
Section 2(a), amending Section 72(t)(2) of the Internal Revenue Code of 1986
Exemption for Qualified Fertility Treatment Distributions
This provision creates a new exception to the 10% additional tax on early distributions from retirement plans. It allows individuals to withdraw funds from their eligible retirement plans (excluding defined benefit plans) without penalty if the money is used within one year to pay for qualified fertility treatment expenses for themselves, their spouse, or domestic partner. There is a lifetime limit of $20,000 on these penalty-free withdrawals, which will be adjusted for inflation in future years.
Supporters argue
Proponents argue that this exemption directly addresses a major financial hurdle for families, allowing them to pursue necessary medical treatments without being penalized for accessing their own savings. They highlight the broad definition of qualified expenses as a strength, ensuring comprehensive coverage for various fertility-related needs.
Critics contend
Opponents might argue that while the goal is noble, this provision encourages individuals to tap into funds intended for their long-term financial security, potentially leaving them with insufficient savings for retirement. They may also raise concerns about the administrative complexity for plan providers and the potential for misuse if oversight is insufficient.
Tradeoffs
The provision balances the immediate need for financial assistance for fertility treatments against the long-term goal of ensuring retirement security. It also introduces a new layer of complexity for retirement plan administration while aiming to simplify access for individuals.
The $20,000 lifetime dollar limitation for qualified fertility treatment distributions will be adjusted for inflation in calendar years after 2026, using the cost-of-living adjustment method defined in section 1(f)(3) of the Internal Revenue Code, with a specific base year substitution.
Section 2(a), subparagraph (O)(ii)(II)
Why it matters:This is standard legislative practice for incorporating existing inflation adjustment mechanisms into new provisions, ensuring the value of the exemption is maintained over time without requiring future legislative action.
Case for: Supporters would argue that indexing the limit to inflation is crucial to ensure the benefit remains meaningful as the cost of fertility treatments rises over time, preventing its erosion by economic factors.
Case against: Critics might argue that while inflation adjustment is common, it adds a layer of complexity for individuals trying to understand their maximum benefit and for administrators calculating the annual limit.
Estimated impact: Ensures the real value of the $20,000 exemption is preserved over time, potentially increasing the total amount that can be withdrawn penalty-free in future years.
The definition of 'qualified fertility treatment distribution' explicitly includes expenses for the 'domestic partner' of the individual, in addition to the individual or their spouse.
Section 2(a), subparagraph (O)(iii)(I)
Why it matters:While a significant policy choice, including 'domestic partner' in a definition is a common legislative technique to broaden the scope of a benefit without making it a standalone provision.
Case for: Proponents would argue that this inclusion ensures equitable access to the benefit for diverse family structures, recognizing the reality of modern partnerships and preventing discrimination based on marital status.
Case against: Some might argue that expanding tax benefits to domestic partners could complicate tax administration or raise questions about the definition and verification of such partnerships for federal tax purposes.
Estimated impact: Expands the eligibility for penalty-free withdrawals to a broader range of individuals in committed relationships, increasing the number of potential beneficiaries.