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.
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Progress
Where this bill stands in the legislative process.
- Introduced
- Passed House
- Passed Senate
- To President
- Became Law
Overview
This bill amends the Internal Revenue Code to allow taxpayers to make charitable donations directly from certain employer-sponsored retirement plans, such as 403(b), 402(m), SEP, and SIMPLE plans, without having to first withdraw funds from the plan. These distributions must be made after the individual turns 70 1/2 and directly to qualified charities. The bill also clarifies rules regarding how these distributions are treated for tax purposes and expands the types of plans covered.
Key provisions
- Allows qualified charitable distributions from 403(b), 402(m), SEP, and SIMPLE retirement plans.
- Requires distributions to be made after the individual turns 70 1/2.
- Directs distributions to qualified charities as defined in Section 170(b)(1)(A).
- Establishes an ‘applicable amount’ to limit the amount of charitable distributions.
- Applies rules similar to Section 408(d)(8) and 408(d)(8)(D) for tax treatment.
- Excludes certain plans (like those described in subsection (k) or (p)) from the definition of ‘qualified employer plan’.
- Applies the rules from Section 402(m) to 457(b) plans.
- Clarifies that annuity contracts under 403(b) plans are also subject to the charitable distribution rules.
Who is affected
- Taxpayers
- Employers offering retirement plans
- Charitable organizations
- Retirement plan administrators
- Employees participating in retirement plans
Bill text
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Sponsors
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3 on record
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