This bill proposes a gross income tax exclusion for distributions made from individual retirement accounts (IRAs) to qualified charitable organizations in New Jersey. It amends existing tax law, specifically N.J.S.54A:5-1 and P.L.1998, c.57, to include provisions that allow for tax-free distributions from both Roth IRAs and traditional IRAs when the funds are directed 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 specifying that distributions from a traditional IRA to a qualified charitable organization are exempt from gross income, as well as clarifying the definition of a Roth IRA and what constitutes a qualified distribution. The bill aims to encourage charitable giving by allowing individuals to support qualified organizations without facing tax liabilities on their IRA distributions. 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