Congress Reinstates Charitable Roth IRA Rollover

Dec 22, 2015

On December 18, 2015, Congress passed legislation that reinstates the Charitable IRA Rollover and makes the IRA rollover permanent and retroactive to December 31, 2014. This allows people to make tax-free distributions from Traditional or Roth Individual Retirement Accounts (IRA) to qualified non-profit organizations, such as WCQS - Western North Carolina Public Radio. 

If you are 70 1/2 or older, you may request direct transfers from your IRA in any amount, up to $100,000 to a charity before December 31, 2015, without reporting it as taxable income. Thus, it may be possible for couples who each have separate IRA accounts to transfer up to $200,000 between now and the end of 2015. The total amount of your contribution will count towards your required minimum distribution (RMD), and you may exclude up to $100,000 of the gift from your federal gross income—resulting in a lower taxable income and possible tax savings.

This provision is now permanent (allowing you to consider this charitable gift option for future gift planning) and is retroactive to December 31, 2014 (meaning gifts transferred directly from an IRA to a charitable organization at any point during 2015 qualify as a rollover gift). If you’d like to make a permanent impact on WCQS, please indicate that you’d like us to add your gift – of any amount – to our endowment

Advantages to you:

  • You can use an overlooked asset to make a gift to WCQS.
  • The IRA Charitable Rollover permits you to make donations directly to charitable organizations such as WCQS from your IRA without counting the distribution as part of your AGI and, consequently, without paying taxes on it.
  • You don’t recognize the distribution as income for federal income tax purposes.
  • The distribution counts towards your minimum required distribution for the year.

To qualify:

  • You must be 70-1/2 or older and required to make an annual distribution from your IRA.
  • 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 for the tax-free treatment. Distribution must be made directly from the IRA trustee payable to WCQS 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 acknowledgement from WCQS or other charity for each rollover contribution.

We encourage you to check with your financial advisor about the best way to take advantage of this opportunity. For more information about making an Charitable IRA Rollover contribution to WCQS, contact our Membership team / membership@wcqs.org / 828-210-4800.

As you take time to support the organizations that are meaningful to your life, thank you for considering WCQS. You will hear our thanks every day in 2016.