The Federal Pension Protection Act of 2006 (P.L. 109-280) enables anyone age 70½ or older to use as much as $100,000 a year from their tax-deferred IRA for charitable gifts, without paying federal income taxes on the amount they use. This option, created in 2006, has been extended through tax year 2009.
For New Jersey Gross Income tax purposes, no similar legislation has been proposed. As such, there is no change to the New Jersey income tax treatment of distributions from an IRA account that corresponds to the federal income tax treatment.
Any amounts considered income for New Jersey gross income tax purposes received from a distribution from a pension plan are taxed as pension and annuity income on the NJ-1040. For additional information on the taxation of pension income, see Tax Topic Bulletin GIT-1