The Pension Protection Act of 2006 permits IRA owners starting at age 70½ to make tax-free charitable gifts totaling up to $100,000 per year from their IRAs directly to eligible charities, such as Carlow University. Charitable distributions from an IRA may be used to satisfy the annual required minimum distribution (RMD).
Details of the provision:
Please note: Information found on this page is intended to provide general information and is not intended as legal advice nor should be relied upon as such.
- Donors must be age 70½ or older on the date of the distribution
- A maximum of $100,000 per year per taxpayer may be distributed to qualified charitable organizations
- Couples with separate IRAs can each gift up to $100,000 per year
- Distributions must be transmitted directly from your IRA's plan administrator to the charity
- Distributions to charity may be applied to satisfy required minimum distribution (RMD)
- Receipt from the charity is required for a donor to substantiate a charitable IRA distribution
- Donors may not receive any personal benefit in exchange for the distribution
- Opportunity for IRAs only, it does not apply to other forms of retirement plans such as 401(k), 403(b)
- Because no income is reported on the donor's tax return, donors do not receive a charitable income tax deduction for the distribution