Cramer, Coons Introduce Legislation to Expand Options for Retirement Charitable Contributions

WASHINGTON, D.C. – As seniors and retirees across America consider estate planning for retirement, they have more options than ever before. In 2022, U.S. Senator Kevin Cramer (R-ND) successfully led an effort to include the Legacy IRA Act as part of the SECURE 2.0 Act, allowing seniors to make qualified charitable distributions (QCDs) from their individual retirement accounts (IRAs) and deduct up to $100,000 in QCDs from their gross income each year. However, other types of retirement accounts are restricted from making tax-free charitable distributions. To make charitable distributions from non-IRA employer-sponsored retirement accounts, like a 401(k), existing law requires seniors to first roll over funds to an IRA. Today, Cramer and U.S. Senator Chris Coons (D-DE) introduced the Charity Parity Act to expand the Legacy IRA program to include common employer-sponsored retirement accounts. These include private sector 401(k)s, public school 403(b)s, and government 457 plans. Making this change means previously idle retirement money can be donated to charities to do beneficial work in local economies and communities. U.S. Senators Roger Marshall (R-KS) and Mark Warner (D-VA) cosponsored the legislation, and U.S. Representatives Don Beyer (D-VA) and Mike Kelly (R-PA) introduced the Charity Parity Act in the U.S. House of Representatives. “For millions of seniors, restrictive rules on retirement accounts limit their ability to use their hard-earned money to support charitable giving,” said Cramer. “Three years ago, we passed the Legacy IRA Act, opening new possibilities for seniors to make charitable contributions. Our Charity Parity Act builds on this success by making other retirement funds eligible to make sure every senior can make donations, regardless of how they saved for retirement.” “Delawareans have always risen to the occasion to support our neighbors and communities,” said Coons. “Government should encourage that generosity, not tie it down in bureaucratic red tape. This bipartisan bill will make sure every American who wants to give charitably receives the same tax benefits, giving more people the opportunity to help those in need.” The Charity Parity Act is supported by the American Heart Association; Association of Fundraising Professionals; American Retirement Association; Mental Health America; Salvation Army; National Council of Nonprofits; Independent Sector; The Nonprofit Alliance; National Association of Charitable Gift Planners (CGP); Infant Crisis Services; Mountain Area Health Education Center; The Church Alliance; and Mountain Aging Partners, Inc. Click here for bill text.