Update on IRA Charitable Rollover Extension

What is an IRA Charitable Rollover?
The IRA Charitable Rollover provision allows individuals who have reached age 70½ to donate up to $100,000 to charitable organizations directly from their Individual Retirement Account (IRA), without treating the distribution as taxable income. The provision is part of a package of 55 temporary tax extenders that were reinstated retroactively for only the 2014 tax year, but expired again on January 1, 2015.

What is making news?
On July 21st the Senate Finance Committee approved by a 23-3 vote, a $95 billion tax extenders package that would retroactively renew 52 expired tax provisions – including the IRA Charitable Rollover – through the end of 2016.  This vote marks the latest step in Congressional efforts this year to revive the Rollover, which lapsed once again at the end of 2014.   

Individuals may begin taking distributions from their Individual Retirement Accounts (IRAs) as early as age 59½, but are required to begin taking them at age 70½. Normally, these distributions are subject to income taxes. The IRA Charitable Rollover provision, established under the Pension Protection Act, allows individuals who have reached age 70½ to donate up to $100,000 to charitable organizations directly from their IRA, without treating the distribution as taxable income. In order to qualify, contributions must go directly to a public charity and be made from traditional IRAs or Roth IRAs. Donors may receive no goods or services in return for their contributions, and must obtain written documentation of their contribution from each recipient charity.

Background on the IRA Charitable Rollover:
Beneficiaries include religious organizations, social service providers, cultural institutions and colleges – organizations that benefit communities and improve lives every day. Since the provision was enacted, hundreds of millions of dollars have been donated to charities through IRA contributions. Last year, at one local United Way, a donor who had previously given an average annual gift of $500 increased her giving to $100,000 once she turned 70 ½ and qualified for this tax incentive. Another local United Way received nearly 75 percent of their IRA rollover gifts in the last two weeks of 2014, indicating that donors were waiting until the tax incentive was back in effect before making their gifts. All kinds of community organizations benefit from this kind of charitable giving. For example, in the first year this provision was available, the Vermont Symphony Orchestra, which employs 60 people, received nearly $272,000 in gifts through IRA rollovers. Independent Sector hears these inspiring stories from around the country.

Source: https://www.independentsector.org/uploads/Policy_PDFs/IRARollover.pdf

Learn More:
For more information on how you can make a gift, please visit the Stewardship page of our website or contact Jackie Abel, Director of Stewardship & Development.