IRA Charitable Rollover Gifts

The SECURE Act, which was signed into law on 12/20/2019, raised the required minimum distribution (RMD) age to 72 from 70 1/2. This change applies to distributions required after 12/31/2019 with respect to individuals who turn 70 1/2 in 2020 and beyond.

Under the rollover provisions, qualified donors (previously age 70 1/2 or older) are able to contribute up to $100,000 annually from an IRA account and avoid federal tax consequences. When the amount withdrawn from the IRA account is paid directly to the charity, it is not counted as federally taxable income. In addition, the IRA charitable gift amount counts against the donor's required minimum distribution (RMD). However, the gift may not be counted as a charitable deduction on federal tax returns.

History: The IRA Charitable Rollover was first enacted in 2006 as part of the Pension Protection Act. The Rollover and other critical giving incentives were reinstated through 2011 as part of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.On January 2, 2013, the President signed into law the American Taxpayer Relief Act of 2012. In addition to the extension of the IRA Rollover provision for 2013, Congress provided two special transition rules: 1) Qualified distributions made by February 1, 2013, could be counted retroactively for the 2012 tax year. 2) Taxpayers who took a withdrawal from an IRA (mandatory or otherwise) during December 2012 could make a cash contribution to a qualified charity before Feb. 1, 2013 and treat the gift as if it had been a direct distribution to charity that qualified as an IRA Rollover gift for 2012.

On December 19, 2014, President Obama signed into law the Tax Increase Prevention Act of 2014 (H.R. 5771) which is a combination of five bills that provide incentives for charitable giving. The law applied to gifts made through December 31, 2014.

On December 18, 2015,Congress voted to make the IRA Charitable Rollover benefit permanent and retroactive to January 1, 2015.

Always consult a tax professional when thinking about making a major charitable gift or a gift under this law. IRA custodians may send your gift to the Tau Beta Pi Association, P.O. Box 2697, Knoxville, TN 37901-2697. Our federal tax ID number is 62-0479545. For more information about how to help Tau Beta Pi, please contact Executive Director Curt Gomulinski, at 865/546-4578 or tbp@tbp.org. There are several opportunities for gifts that could be provided by this new law; but because we are prohibited from offering advice, this information should not be construed as tax or legal advice.