Flexible giving accounts

(a)

In general

Subsection (a) of section 132 of the Internal Revenue Code of 1986 is amended by striking or at the end of paragraph (7), by striking the period at the end of paragraph (8) and inserting , or, and by inserting after paragraph (8) the following:

(9)flexible giving account.

(b)

Flexible giving account

Section 132 of such Code is amended by redesignating subsection (o) as subsection (p) and by inserting after subsection (n) the following:

(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.(B)

Maximum reduction

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

Highly compensated employee

The term highly compensated employee has the meaning given such term by section 414(q).(iii)

Key employee

The term key employee has the meaning given such term by section 416(i).(B)

Certain employees may be excluded

(i)

In general

For purposes of subparagraph (A), an employer may elect to exclude under the arrangement described in paragraph (1) any employee who—(I)has not attained the age of 21 before the close of a plan year of the arrangement,(II)has less than 1 year of service with the employer as of any day during the plan year, or(III)is described in section 410(b)(3)(C) (relating to nonresident aliens working outside the United States).(ii)

Shorter service period; younger age

For purposes of clause (i), an employer may elect to—(I)reduce the applicable minimum age under subclause (I) of such clause, or(II)reduce the applicable period of service under subclause (II) of such clause.(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.(B)

Coordination with section 170

(i)

Denial of deduction

No deduction shall be allowed under section 170(a) with respect to any amount distributed from the flexible giving account of an eligible employee.(ii)

Treatment as charitable contribution

Except as provided in clause (i), any distribution from the flexible giving account of an eligible employee shall otherwise be treated as a charitable contribution made by such employee for purposes of section 170, including for purposes of any limitation applicable under subsection (b) of such section.(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.

(c)

Effective date

The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.