Tax break for older workers donating retirement savings to charity

What it does

This bill allows people age 70½ and older to exclude from taxable income charitable donations made directly from their employer retirement plans (401(k)s, 403(b)s, 457(b)s, and similar plans) up to a specified annual limit. The donation must go directly from the plan to a qualified charity, and the amount excluded cannot exceed the annual limit that applies to similar distributions from IRAs. This is a tax benefit for older workers who want to give to charity while drawing down retirement savings.

Why we flagged it

The bill's sole operative mechanism is a tax exclusion for charitable distributions from employer retirement plans. It is a straightforward tax incentive designed to encourage charitable giving by older workers without increasing their taxable income.

What the text implies

• The exclusion applies only to distributions that would otherwise be includible in gross income, meaning it does not create a new deduction for non-taxable distributions — it preserves the tax-free status of amounts that would have been taxed.
• The 'applicable amount' is capped by reference to the annual limit under IRC §408(d)(8) (the IRA charitable distribution limit, currently $100,000 indexed for inflation), so the benefit is bounded and does not grow without legislative action.
• By extending the rule to 403(b) plans (tax-sheltered annuities for nonprofits and schools) and 457(b) plans (deferred compensation for government and tax-exempt employers), the bill equalizes tax treatment across different types of employer retirement plans.
• The bill does not require the employer plan to adopt the provision — it is automatic under tax law once enacted, so all qualifying plans are immediately affected without plan amendment.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

Older workers and retirees who donate to charity gain a tax deduction they did not previously have for employer-plan distributions, reducing their tax burden. The benefit is available only to those age 70½+ with employer retirement plans and charitable intent, so it is narrowly targeted but genuinely beneficial to those who qualify.

Who stands to gain

• Individuals age 70½+ with employer retirement plans and charitable intent
• Qualified charitable organizations (indirect benefit via increased donations)

Named in the bill

Internal Revenue Code §402, Internal Revenue Code §408(d)(8), Internal Revenue Code §403, Internal Revenue Code §457(e), Qualified charitable organizations under IRC §170(b)(1)(A), Employer-sponsored retirement plans (401(k), 403(b), 457(b), SEP, SIMPLE)

Where it stands

3 cosponsors: 2 Democrats, 1 Republicans.

• May 13, 2026 — Introduced · Congress.gov: “Introduced in Senate”
• May 13, 2026 — Referred to Senate Committee on Finance · Congress.gov: “Read twice and referred to the Committee on Finance”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

9 lobbying clients named this bill on 9 disclosure filings across 1 quarter, Jun 2026 to Jun 2026. Those filings disclosed $1,913,661 in lobbying spend. A filing names 13 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 89% of bills with at least one filing.

Kevin Cramer, the sponsor, reported $203,312 in PAC receipts in the 2026 cycle.

• American Cancer Society Cancer Action Network Inc — $1,240,000 on 1 filing
• American Society of Pension Professionals & Actuaries — $428,151 on 1 filing
• National Council of Nonprofits (formerly Known As the National Council of Nonpro — $95,510 on 1 filing
• American Retirement Association — $60,000 on 1 filing
• The Nonprofit Alliance — $30,000 on 1 filing

Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.