IRA Charitable Rollover

The IRA charitable rollover allows taxpayers age 70½ or older to make tax-free charitable gifts of up to $100,000 per year directly from their Individual Retirement Accounts to eligible charities, including colleges, universities and independent schools.

The Pension Protection Act of 2006 (PPA) permitted individuals to roll over up to $100,000 from an individual retirement account (IRA) directly to a qualifying charity without recognizing the assets transferred to the qualifying charity as income. While this initial provision expired on December 31, 2007, it has been extended several times. On December 18, 2015, the President signed the PATH Act making this special provision permanent.

To qualify:

  • You must be 70-1/2 or older and required to make an annual distribution from your IRA. The IRA Charitable Rollover permits you to make donations directly to charitable organizations such as WaterFire Providence from your IRA without counting the distribution as part of your AGI and, consequently, without paying taxes on it.
  • Your total combined charitable IRA rollover contribution cannot exceed $100,000 in any one year.
  • Charitable contributions from an IRA must go directly to a public charity that is not a supporting organization. Contributions to donor-advised funds and private foundations, except in narrow circumstances, do not qualify for tax-free IRA rollover contributions.
  • Distributions can only be made from traditional Individual Retirement Accounts or Roth IRAs. Charitable donations from 403(b) plans, 401(k) plans, pension plans, and other retirement plans are ineligible. Distribution must be made directly from the IRA trustee payable to WaterFire Providence or another non-profit.
  • You cannot receive any goods or services in return for your charitable IRA rollover contribution in order to qualify for tax-free treatment.
  • You must receive an acknowledgment from WaterFire Providence or other charity for each rollover contribution.

We recommend that you seek advice from your accountant prior to making a charitable rollover as personal circumstances can have a significant impact on whether charitable rollovers are advantageous. In order to benefit from the 2013-eligible IRA contribution, contact your IRA plan administrator. Please let us know the name of your plan provider so we can look for your check and notify you accordingly. We are happy to provide you with a sample transfer request letter to your plan administrator.

For more information about making an IRA contribution to WaterFire Providence, contact Ed Cabral by email or call (401) 443-5546.

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