On December 18, 2015, Congress passed and President Obama signed into law a permanent extension of the IRA Charitable Rollover. This law allows an individual over the age of 70½ to make direct gifts of up to $100,000 per year to charity directly from his/her IRA without having to take such amount into taxable income.
The prior law that permitted the IRA Charitable Rollover expired on December 31, 2014. The new law provides that all distributions made after December 31, 2014 (and beyond) will qualify for the $100,000 exclusion from gross income.
Now that this tax incentive is a permanent part of the tax code, retirement plan owners finally have certainty when planning to assist their favorite charities through an IRA gift. The IRA Charitable Rollover counts toward an individual’s required minimum distribution and because it is not reported in taxable income, it is a very convenient and simple way to help a charitable cause and simplify taxes by reducing adjusted gross income.