This bill proposes a gross income tax exclusion for distributions made from individual retirement accounts (IRAs) to qualified charitable organizations in New Jersey. Specifically, it amends N.J.S.54A:5-1 and P.L.1998, c.57 to include provisions that allow for tax-exempt distributions from both Roth IRAs and traditional IRAs when these funds are donated to organizations recognized as tax-exempt under section 501(c)(3) of the federal Internal Revenue Code. The bill defines a "qualified charitable organization" and outlines the conditions under which distributions from these accounts can be made without incurring state income tax.

Key amendments include the addition of language that specifies distributions from a traditional IRA to a qualified charitable organization are not included in gross income, as well as the inclusion of qualified distributions from a Roth IRA. The bill also clarifies the definitions of "qualified distribution" and "traditional IRA," ensuring that the tax benefits apply specifically to contributions made to eligible charitable entities. The act is set to take effect immediately and will apply to taxable years beginning on or after January 1 of the year following its enactment.

Statutes affected:
Introduced: 54A:6-28