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.
- Bill Number
- S. 4511
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 2
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2026-05-13: Read twice and referred to the Committee on Finance.
- Last Updated
- 2026-06-01T16:28:34Z
AI-Generated Summary
Summary of S. 4511
Purpose
This legislation amends the Internal Revenue Code to allow certain tax-free donations from employer-sponsored retirement plans directly to charities. It extends existing rules that already permit such donations from individual retirement accounts (IRAs).
Key Provisions
- Exclusion from Taxable Income: Distributions from qualified employer plans to eligible charities are excluded from gross income (taxable earnings) up to a set limit, provided they are made directly by the plan and the individual is at least age 70½.
- Qualified Charitable Distributions: These must go to public charities (excluding certain supporting organizations or donor-advised funds) and would otherwise be taxable.
- Limit Calculation: The maximum excluded amount equals the annual IRA donation limit minus any amounts already excluded from IRA donations in the same year.
- Plan Coverage: Applies to 401(k)-style plans, 403(b) plans, governmental 457(b) plans, SEPs, and SIMPLEs.
- Special Rules: Includes provisions for how taxes and rights to funds are considered across multiple plans.
Significant Changes to Existing Law
- Previously, tax-free charitable distributions were limited to IRAs under section 408(d)(8) of the Internal Revenue Code.
- This bill adds new rules in section 402(m) for employer plans and extends similar treatment to 403(b) and 457(b) plans.
- It removes prior restrictions that excluded SEPs and SIMPLEs from IRA-style charitable donation rules.
Potential Impacts
- On Citizens: Individuals with employer-sponsored retirement plans gain the ability to donate pre-tax funds to charity without adding to their taxable income, which may encourage more giving.
- On Government Agencies: The Internal Revenue Service would need to update forms, guidance, and enforcement for these new distribution options.
- On International Relations: No direct effects identified in the legislation.
- On Charities: Organizations may receive additional direct donations from retirement accounts.
Main Stakeholders Affected
- Individuals participating in employer-sponsored retirement plans.
- Charitable organizations eligible to receive such distributions.
- Employers and plan administrators responsible for handling distributions.
- The Internal Revenue Service for tax administration and compliance.
Notable Legal, Constitutional, or Political Implications
- The bill operates within Congress's authority to set tax rules under the Internal Revenue Code, with no apparent constitutional conflicts.
- It represents a targeted expansion of tax incentives for philanthropy using retirement savings.
- The legislation applies starting in the first tax year after it becomes law.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (3)
Sen. Coons, Christopher A. [D-DE], Sen. Marshall, Roger [R-KS], Sen. Warner, Mark R. [D-VA]
Recent Actions
- 2026-05-13: Read twice and referred to the Committee on Finance.
- 2026-05-13: Introduced in Senate
Bill Versions
- 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. — issued 2026-05-13 — PDF (5 pages)