The Protecting Americans from Tax Hikes (PATH) Act of 2015 has permanently extended the benefits of the IRA charitable rollover provision. These benefits are retroactive to January 1, 2015.
From now on, taxpayers 70 1/2 or older can make an IRA transfer of up to $100,000 directly to charity and claim it as a tax-free IRA Charitable Rollover gift.
To qualify as an IRA Charitable Rollover gift, donors must meet several conditions:
If a donor made a gift from his or her IRA on or after January 1, 2015, that meets the requirements of an IRA charitable rollover, then the amount distributed from the IRA to the charity qualifies as a tax-free distribution and will not be included in AGI, which prevents that amount from adversely affecting calculations that are based on AGI, such as the 3.8 percent Medicare surtax.
Donors should work directly with their IRA custodian to request a distribution directly to charity. Please consult your tax adviser and reference the above, as other requirements may apply.
Click here to download instructions and a sample distribution request letter. If you need more information, or if you are preparing to make a direct wire transfer charitable gift from your IRA, please contact our office at 212.727.9955 or by email to firstname.lastname@example.org.
If you wish to make sure that the contribution is treated as made in 2015 to count against your 2015 minimum required distribution, your mailing must be postmarked by December 31, 2015, or the wire initiated on or before December 31, 2015.
This information should not be treated as professional legal or tax advice and is provided for informational purposes only. Consult with your own accountant or attorney about how the tax laws apply to you.