Interest for Others Act of 2016

Summary: Interest for Others Act of 2016  This bill amends the Internal Revenue Code to allow individuals, trusts, or estates to exclude from gross income up to $50 of interest and money market fund dividend income that is contributed to charity using a program adopted by a financial institution or a money market fund.  Details regarding the payments to charities must be reported to the Internal Revenue Service by any person that: (1) pays certain interest or dividends and has a charitable contribution program, or (2) is an aggregator that receives contributions and makes payments to charities under a program. 

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Interest for Others Act of 2016''.

SEC. 2. EXCLUSION FROM GROSS INCOME OF CERTAIN INTEREST AND MONEY 
              MARKET FUND DIVIDENDS PAID TO CHARITY.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by inserting after  139E the 
following:

``SEC. 139F. INTEREST AND MONEY MARKET FUND DIVIDENDS DONATED TO 
              CHARITY.

    ``(a) General Rule.--In the case of a taxpayer who is an 
individual, trust, or estate, gross income for a taxable year shall not 
include the amount of a charitable contribution pursuant to a qualified 
program made during the taxable year in which a calendar year ends.
    ``(b) Limitations.--
            ``(1) Exclusion limited to interest and dividend income.--
        The amount excluded from gross income by subsection (a) for a 
        calendar year shall not exceed the sum of--
                    ``(A) in the case of a deposit in a financial 
                institution, the lesser of--
                            ``(i) the amount of interest paid to the 
                        taxpayer on such deposit for the calendar year, 
                        and
                            ``(ii) the aggregate charitable 
                        contribution from such deposit during the 
                        calendar year, and
                    ``(B) in the case of shares in a money market fund, 
                the lesser of--
                            ``(i) the amount of dividends paid with 
                        respect to such shares for the calendar year, 
                        and
                            ``(ii) the aggregate charitable 
                        contribution from such shares during the 
                        calendar year.
            ``(2) Account limitation.--The amount excluded from gross 
        income by subsection (a) from an account for a calendar year 
        shall not exceed $50.
    ``(c) Qualified Program.--For purposes of this section--
            ``(1) In general.--The term `qualified program' means a 
        program adopted by a financial institution or a money market 
        fund (as the case may be) under which--
                    ``(A) the owner of a deposit in the financial 
                institution or of shares in the money market fund--
                            ``(i) elects to participate in the program,
                            ``(ii) elects the amount of donation from 
                        the owner's deposit or shares, and
                            ``(iii) designates an entity described in 
                        section 170(c) to receive the donation, and
                    ``(B) the financial institution or money market 
                fund makes, directly or through a qualified aggregator, 
                a contribution of the amount elected under subparagraph 
                (A)(ii) to the entity designated under subparagraph 
                (A)(iii).
            ``(2) Qualified aggregator.--
                    ``(A) In general.--The term `qualified aggregator' 
                means an organization--
                            ``(i) which is described in section 
                        501(c)(3) and exempt from tax under section 
                        501(a), and
                            ``(ii) the purpose of which is to 
                        facilitate charitable contributions under a 
                        qualified program by aggregating contributions 
                        from deposits and funds and payments to 
                        entities designated to receive such payments.
                    ``(B) Administrative costs.--An entity shall not 
                fail to be treated as a qualified aggregator solely 
                because the entity retains a portion of contributions 
                from deposits and funds to cover its administrative 
                costs if the qualified aggregator provides notice in 
                advance of its intent to retain such a portion. The 
                notice need not specify the exact amount or percentage 
                of the amount to be retained.
                    ``(C) Special rule regarding status to receive 
                charitable contributions.--A program shall not fail to 
                be described in paragraph (1) merely because the 
                ultimate recipient of a contribution is ineligible to 
                receive charitable contributions so long as the 
                qualified aggregator and the financial institution or 
                money market fund (as the case may be) made an initial 
                good faith determination that contributions to 
                recipients under the program would be qualified under 
                section 170(c) to receive charitable contributions. For 
                purposes of the preceding sentence, a financial 
                institution or money market fund may rely upon the 
                representation of the qualified aggregator that the 
                organizations to which distributions will be made 
                qualify under section 170(c) to receive charitable 
                contributions.
    ``(d) Other Definitions.--For purposes of this section--
            ``(1) Deposit.--The term `deposit' means any deposit, 
        withdrawable account, or withdrawable or repurchasable share.
            ``(2) Financial institution.--The term `financial 
        institution' means--
                    ``(A) any bank (as defined in section 581),
                    ``(B) any institution described in section 591,
                    ``(C) any credit union the deposits or accounts in 
                which are insured under Federal or State law or are 
                protected or guaranteed under State law, and
                    ``(D) any similar institution chartered and 
                supervised under Federal or State law.
            ``(3) Money market fund.--The term `money market fund' 
        means an open-end investment management company registered 
        under the Investment Company Act of 1940 and subject to Rule 
        2a-7 thereof.
            ``(4) Charitable contribution.--The term `charitable 
        contribution' means a charitable contribution as defined in 
        section 170(c).''.
    (b) Clerical Amendment.--The table of sections for part III of 
subchapter B of chapter 1 of such Code is amended by inserting after 
the item relating to section 139E the following:

``Sec. 139F. Interest and money market fund dividends donated to 
                            charity.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to all interest and money market fund dividends paid after 
December 31, 2015.

SEC. 3. DENIAL OF DEDUCTION OF AMOUNTS EXCLUDED FROM INCOME UNDER 
              SECTION 139F.

    (a) In General.--Section 170(f) of the Internal Revenue Code of 
1986 is amended by adding at the end the following:
            ``(19) Certain donated interest and money market fund 
        dividends.--Amounts excluded from gross income under section 
        139F shall not be taken into account as a charitable 
        contribution for purposes of this section.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to all charitable contributions made after December 31, 2015.

SEC. 4. INFORMATION RETURNS.

    (a) Money Market Funds.--Section 6042(b)(2) of the Internal Revenue 
Code of 1986 is amended by striking ``or'' at the end of subparagraph 
(A), by striking the period at the end of subparagraph (B) and 
inserting ``, or'' and by adding at the end the following:
                    ``(C) which is specifically excluded from gross 
                income of the payee by section 139F(a).''.
    (b) Payments of Interest.--Section 6049(b)(2) of such Code is 
amended by striking ``and'' at the end of subparagraph (B), by striking 
the period at the end of subparagraph (C) and inserting ``, and'', and 
by adding at the end the following:
                    ``(D) interest which is specifically excluded from 
                gross income of the payee by section 139F(a).''.
    (c) Returns Regarding Payments Excluded From Gross Income Under 
Section 139F.--Subpart B of part III of subchapter A of chapter 61 of 
such Code is amended by inserting after section 6049 the following:

``SEC. 6049A. RETURNS REGARDING INTEREST AND MONEY MARKET FUND 
              DIVIDENDS CONTRIBUTED TO CHARITY.

    ``Every person who, during any calendar year--
            ``(1) makes payments of interest or dividends aggregating 
        $10 or more and who has in effect a qualified program (as 
        defined in section 139F(c)(1)), or
            ``(2) is a qualified aggregator (as defined in section 
        139F(c)(2)) and who, under such a qualified program, receives 
        contributions and makes payments aggregating $10 or more to any 
        entity described in section 170(c),
shall make a return according to the forms or regulations prescribed by 
the Secretary setting forth the aggregate amount of such payments, and 
the name and address of the person to whom paid.''.
    (d) Conforming Amendment.--The table of sections for subpart B of 
part III of subchapter A of chapter 61 of such Code is amended by 
inserting after the item relating to section 6049 the following new 
item:

``Sec. 6049A. Returns regarding interest and money market fund 
                            dividends contributed to charity.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to all payments made after December 31, 2015.