S 3191 — Everyday Philanthropist Act

Summary

Everyday Philanthropist Act This bill allows employers to offer certain employees a tax-advantaged flexible giving account as a fringe benefit. Flexible giving accounts allow employees to set aside up to $2,700 of their annual pretax earnings to make tax-deductible charitable contributions without having to itemize tax deductions.

Bill Text

• Introduced Introduced in Senate Current html November 04, 2021

AI-generated reading aid from the bill's amendatory text — verify against the official bill.

The bill creates a new type of account called a 'flexible giving account' which allows employees to make tax-exempt contributions for charitable purposes.

• Section 132

  (9) flexible giving account.

  Adds a new type of account for flexible giving to the list of excluded benefits.

• Section 132

  Subsection (o) → Subsection (p)

  Redesignates subsection (o) to subsection (p) to make room for the new subsection on flexible giving accounts.

• Section 132

  (o) Flexible Giving Account.-- (1) In general.-- (A) Flexible giving account.--For purposes of this subsection, a flexible giving account is an account under an arrangement which is a separate written plan of an employer for the exclusive benefit of all eligible employees under which-- (i) an employee may elect-- (I) to receive a reduction in compensation and have the employer deposit the amount of the reduction in a flexible giving account of the electing employee, and (II) before the reduction under subclause (I), to designate 1 or more eligible entities to which distributions are to be made from the account, (ii) the employer will not make any reduction under clause (i)(I) unless 1 or more entities have been designated under clause (i)(II), (iii) the employer, as soon after the deposit under clause (i)(I) as practicable, makes the disbursements designated under clause (i), (iv) the employer provides reasonable notification of the availability and terms of the arrangement to all eligible employees, (v) the employer maintains a separate flexible giving account on behalf of each employee for whom an election is in effect under clause (i), and (vi) the employer agrees to furnish to each participating employee, on or before January 31 of each year, a written accounting of the employee's flexible giving account showing deposits and disbursements during the previous calendar year.

  Defines what a flexible giving account is and outlines the employer's obligations regarding it.

• Section 132

  (B) Maximum reduction.--The amount of a reduction under subparagraph (A) for a taxable year shall not exceed $2,700.

  Sets a maximum contribution limit for the flexible giving account.

• Section 132

  (2) Eligible employee.--For purposes of this subsection-- (A) In general.-- (i) Eligible employee.--The term `eligible employee' means, with respect to a flexible giving account, any employee who-- (I) is not a highly compensated or key employee, and (II) has not been excluded from the arrangement pursuant to subparagraph (B).

  Defines who qualifies as an eligible employee for the flexible giving account.

• Section 132

  (3) Tax treatment of distributions.-- (A) In general.--Any distribution from a flexible giving account shall not be includible in the gross income of the eligible employee.

  Establishes that distributions from a flexible giving account are not taxable income.

• Section 132

  (4) Eligible entity.--For purposes of this subsection, the term `eligible entity' means any entity described in paragraphs (1) through (5) of section 170(c) other than a private foundation described in subsection (b)(1)(F) of section 170.

  Clarifies which entities are eligible to receive distributions from the flexible giving account.

Action History

1. November 04, 2021

   Introduced in Senate

2. November 04, 2021

   Read twice and referred to the Committee on Finance.

Sponsors

• Ben Sasse · Primary

Subjects