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IRA Charitable Rollover

IRA Charitable Rollover

In late 2015, after years of last minute renewals, Congress made permanent and the President signed into law the Individual Retirement Account (IRA) Charitable Rollover legislation which allows individuals age 70 1/2 or older to transfer up to $100,000 of tax-free gifts on an annual basis from their IRA directly to charitable organizations like NDES and NDMS.

While taxpayers age 59 1/2 may begin taking distributions from their IRA, they are required to take annual distributions at age 70 1/2 and older. These distributions are normally included in the tax payers' adjusted gross income (AGI), and therefore subject to taxes.

  • The IRA charitable rollover permits those taxpayers age 70 1/2 or older to make donations directly to NDES and from their IRAs without counting them as part of their AGI, and consequently without paying taxes on the contribution.
  • The annual cap on a donor's total combined charitable IRA rollover contributions is $100,000. Couples can contribute individually from their IRAs, resulting in potential annual gifts of up to $200,000 from one couple to their favorite charity.
  • Distributions can be made from traditional IRA accounts or Roth IRAs, and the charitable contributions from the IRA must be payable directly from the IRA trustee to an eligible public charity (excluded are donor advised funds, supporting organizations and private foundations).
  • Donors cannot receive any goods or services in return from their charitable IRA rollover contributions in to order to qualify for the tax-free provision, and must obtain written substantiation of each rollover contribution from each recipient charity. Since the IRA charitable rollover is a tax-exempt distribution, in many cases it provides an incentive to eligible donors to increase the size of their contribution.
Interested in making a gift to NDES through your IRA? Call Keven Krajnak, Director of Development, at (440) 279-1068 or [email protected] to discuss your gift intentions.