This bill amends New Jersey's gross income tax law to provide an exclusion for distributions made from individual retirement accounts (IRAs) to qualified charitable organizations. Specifically, it allows for tax-free distributions from both Roth IRAs and traditional IRAs when the 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 retirement accounts can be made without incurring state income tax.

The bill also clarifies the definitions of Roth IRAs and traditional IRAs, including the conditions for what constitutes a qualified distribution from a Roth IRA. Notably, it adds provisions that allow for tax-free distributions to qualified charitable organizations, thereby encouraging charitable giving from retirement accounts. The changes will take effect immediately and apply to taxable years beginning on or after January 1 of the year following the enactment of the bill.

Statutes affected:
Introduced: 54A:6-28