70 1/2 or Older? IRA Charitable Rollover is now PERMANENT!

The Protecting Americans from Tax Hikes (PATH) Act of 2015, which was passed by Congress and signed into law by the president on December 18, 2015, made permanent what is popularly known as the IRA charitable rollover.

Charitably-minded taxpayers have enthusiastically embraced the IRA charitable rollover as an opportunity to transfer up to $100,000 each year to charity without it being treated as a taxable distribution. Despite its popularity since being introduced in 2006, the IRA charitable rollover has faced extinction several times and had actually expired on December 31, 2013. Now it has been reinstituted and made permanent.

Here are the requirements and restrictions for making an IRA charitable rollover gift:

  • The donor must be 70 1/2 or older.
  • The gift must be made directly from the IRA to an eligible charitable organization.
  • Gifts to all charities combined cannot exceed a total of $100,000 per taxpayer for the year.
  • The gifts must be outright, and no material benefits can be received in return for the gifts. Thus a transfer for a gift annuity, charitable remainder trust, or pooled income fund is not permitted.
  • Gifts cannot be made to a donor advised fund, supporting organization, or private foundation.
  • The gift is not included in taxable income, and no charitable deduction is allowed.
  • The gift can be made only from an IRA. Gifts from 401(k), 403(b), and 457 plans are not permitted.
  • The qualified distribution described above applies to a traditional IRA.
  • Distributions from employer-sponsored retirement plans, including simple IRA plans and simplified employee pension (SEP) plans, are not eligible for the tax-free rollover

If you want to make a qualifying transfer, contact your IRA administrator and instruct that person to transfer funds to the charity(ies) you designate. We provide instructions for completing your gift – contact our Development Director Colleen McElligott, [email protected] or 773.834.2308.