Exclude Charitable Distributions From Retirement

Full Title:
To amend the Internal Revenue Code of 1986 to exclude from gross income charitable distributions from certain employer-sponsored retirement plans, and for other purposes.

Summary#

This bill would change the tax code to let certain direct charitable transfers from employer-sponsored retirement plans be excluded from a taxpayer's gross income. The exclusion applies only to distributions made directly by the retirement plan to certain charities and only for individuals who are at least 70½ years old. The bill defines which employer plans are included, extends the rule to 403(b) and 457(b) plans, and removes a prior exception for SEPs and SIMPLE IRAs so those plans can qualify. The bill uses an "applicable amount" limit tied to the dollar amount referenced in section 408(d)(8) of the tax code and includes special rules similar to existing IRA charitable-distribution rules. The changes apply to taxable years beginning after the law is enacted.

What it means for you#

  • If you are age 70½ or older and have an eligible employer-sponsored retirement plan, you may be able to have your plan send money directly to an eligible charity without counting that money as taxable income.
  • The charity must be one described in section 170(b)(1)(A) of the tax code; some organizations and certain funds/accounts named in the bill are excluded.
  • The exclusion is limited by an "applicable amount" the bill defines using existing tax-code limits for IRA charitable distributions; amounts already excluded under those rules reduce the remaining limit.
  • The rule covers certain employer plans added or clarified in the bill (including 403(b), 457(b), SEPs, and SIMPLEs as described).
  • The change starts for taxable years beginning after the date the bill becomes law.

Expenses#

No publicly available information on estimated costs, revenue effects, or budgetary offsets is included in the bill text or metadata provided.

Proponents' View#

No publicly available information on supporters' statements or detailed legislative findings is included in the bill text or metadata provided.

Opponents' View#

No publicly available information on opponents' statements or objections is included in the bill text or metadata provided.