An IRA charitable rollover allows individuals 70 ½ and older to make a sizable gift from an individual retirement account (IRA) to charity AND receive significant tax benefits in return.
Give a tax-wise gift up to $100,000 per year in IRA assets directly to your favorite Kingdom causes.
Benefits of an IRA Charitable Rollover
- Convenient. An easy way to give to your favorite charity.
- Tax-wise. Distributions made directly to charity are not treated as taxable income. Advantageous even if you don’t itemize deductions on your tax returns!
- Promises kept. Gifts from your IRA can be used to fulfill any charitable giving pledges previously made.
- Impactful. Gifts are tax-free to the charity. The entirety of your gift will go toward ministry!
Requirements of a Qualified Charitable Distribution
Through IRA charitable rollovers, you can make gifts to charity without any federal tax liability, as long as the gifts are qualified charitable distributions (QCDs). Distributions qualify for all or part of an IRA owner’s required minimum distribution (RMD).
- IRA holders must be age 70 ½ or older at the time of the gift.
- Give up to $100,000 per year as a single person or $200,000 per year as a married couple from separate accounts.
- Gifts must be outright gifts made directly to a charitable organization.
- Distributions to donor-advised funds, charitable trusts, or for charitable gift annuities are not permissible.
- Distributions may only be made from traditional IRAs or Roth IRAs; other retirement accounts are not eligible.
Frequently Asked Questions
Who benefits most from this gift option?
There are a few groups of individuals who benefit from the IRA charitable rollover…
- The non-itemizer. Those who normally don’t itemize their deductions can avoid taking the IRA distribution as income and send it directly to charity. This may reduce both their federal and state income tax liability.
- The financially stable. Those in high income brackets who have large IRAs may want to make a qualified charitable distribution to reduce their income. In addition, they may have income tax savings not otherwise available because of charitable deduction limitations. A QCD up to $100,000 may have the triple benefit of reducing their taxable income, reducing the value in their IRA and meeting their RMD.
Do I receive a deduction for my gift?
No. Because the IRA assets haven’t been taxed, no deduction is allowed. To receive the deduction, you would be required to
first treat the distribution as taxable income before taking the deduction. In most cases, it is better to not take the distribution as
How do I make a gift to charity through an IRA charitable rollover?
Simply contact your IRA plan administrator, and inform them you want to make a charitable gift directly from your IRA. They will provide you with the forms required to do so.
To learn more about IRA gifts or other smart and powerful giving options, contact Barnabas Foundation at 888.448.3040 or by clicking on the button below.