Charitable IRA Rollover

Charitable IRA Rollover Made Permanent

On December 18, 2015, the Protecting Americans from Tax Hikes (PATH) Act, was signed into law.  Among the Act’s many provisions is the permanent provision allowing charitable gifts from Individual Retirement Accounts.

This “charitable IRA rollover” allows individuals age 70½ or older to transfer up to $100,000 annually from their IRA accounts directly to charity without first having to recognize the distribution as income.

Any IRA administrator can help accomplish this type of giving.  For a sample letter of instruction to your administrator, click: sample letter.  The recipient of the gift must be a church or other qualified charity—a donor advised fund or supporting organization is not eligible.

This opens up dependable flexibility in planning and making your charitable gifts each year:

  • Special gifts, up to $100,000 annually, can be paid to the church for projects, missions or other Gospel opportunities.
  • The Required Minimum Distribution (RMD) can now regularly be paid to the church as you tithe or as a special gift.
  • Only an Individual Retirement Account is eligible to provide such charitable gifts.  In some instances, it may be possible to roll other retirement plan assets into an IRA and still take advantage of this giving opportunity—check with your plan administrator to find out for sure.

Why give the RMD or other gifts directly from an IRA?  The charitable IRA rollover sends pre-tax dollars directly to the church.  You never pay tax on the withdrawal and the church never pays tax on it either.

The dollars in your checking or savings account are already taxed.  It is very often more tax-wise to give IRA funds directly to charity rather than an equal amount from your checking account.  Since most seniors do not have enough deductions to itemize on their federal tax return, charitable giving from the IRA makes sense for many—check with your professional advisor to be sure.

Making a gift through the IRA charitable rollover provision is simple. If you have questions or need help, please submit the form below and our partners at PhilanthroCorp (a Christ-centered estate planning firm) will call.

Thank you for your faithfulness to Hume Lake Christian Camps in so many ways.

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