Exclude from gross income charitable distributions from certain employer-sponsored retirement plans

Section 402 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

Gross income for any taxable year shall not include so much of the aggregate amount of qualified charitable distributions made with respect to a taxpayer during such taxable year which does not exceed the applicable amount.

For purposes of this subsection, the term qualified charitable distribution means any distribution from a qualified employer plan— A distribution shall be treated as a qualified charitable distribution only to the extent that the distribution would be includible in gross income without regard to paragraph (1).

(A) which is made directly by the plan to an organization described in section 170(b)(1)(A) (other than any organization described in section 509(a)(3) or any fund or account described in section 4966(d)(2)), and

(B) which is made on or after the date that the individual on whose behalf the distribution is made has attained age 70 1/2.

Rules similar to the rules of subparagraphs (C), (E), and (F) of section 408(d)(8) shall apply for purposes of this subsection.

Rules similar to the rules of section 408(d)(8)(D) shall apply for purposes of this subsection, by taking into account all amounts to which the taxpayer has a nonforfeitable right in all qualified employer plans maintained by the employer in lieu of all amounts in all individual retirement plans of the individual.

For purposes of this subsection—

The term applicable amount means the excess of—

(i) the dollar amount in effect under section 408(d)(8) for the taxable year, over

(ii) the total amount of distributions not includible in the gross income of the taxpayer for the taxable year by reason of section 408(d)(8).

The term qualified employer plan means—

(i) an eligible retirement plan described in clause (iii) or (vi) of subsection (c)(8)(B), or

(ii) a plan established for its employees by the United States, by a State or political subdivision thereof, or by an agency or instrumentality of any of the foregoing.

Section 408(d)(8)(B) of such Code is amended by striking (other than a plan described in subsection (k) or (p)).

Section 403 of such Code is amended by adding at the end the following new subsection:

The rules of section 402(m) shall apply to distributions under an annuity contract described in subsection (b).

Section 457(e) of such Code is amended by adding at the end the following new paragraph:

The rules of section 402(m) shall apply to distributions under an eligible deferred compensation plan established and maintained by an eligible employer described in subsection (e)(1)(A).

The amendments made by this section shall apply to distributions made in taxable years beginning after the date of the enactment of this Act.