A bill 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 Senate
- Passed House
- To President
- Became Law
Overview
This bill amends the Internal Revenue Code to allow taxpayers to donate directly from certain employer-sponsored retirement plans, such as 401(k)s, 403(b)s, and 457(b) plans, to qualified charities without paying income tax. Specifically, it creates a ‘qualified charitable distribution’ for those age 70 1/2 and older, and establishes rules for how these distributions are treated. The bill also clarifies the application of these rules to plans like SEP and SIMPLE IRAs. It expands the types of plans eligible for this treatment.
Key provisions
- Allows qualified charitable distributions from 401(k), 403(b), and 457(b) plans.
- Defines a ‘qualified charitable distribution’ as a direct distribution from the plan to a qualified charity, made to individuals age 70 1/2 or older.
- Establishes an ‘applicable amount’ to limit the amount of charitable distributions.
- Modifies rules regarding the treatment of distributions for non-forfeitable rights in retirement plans.
- Applies the rules for qualified charitable distributions to annuity contracts under 403(b) plans.
- Expands the definition of ‘qualified employer plan’ to include plans established by the US government, state governments, and certain agencies.
- Specifies that distributions under eligible deferred compensation plans for eligible employers are also covered.
Who is affected
- Taxpayers age 70 1/2 and older
- Employers offering retirement plans (401(k), 403(b), 457(b))
Bill text
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Sponsors
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4 on record
Primary sponsor
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