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.
Individuals may begin taking distributions from their Individual Retirement Accounts (IRAs) as early as age 59½, but are required to begin taking them at age 70½. Normally, these distributions are subject to income taxes. The IRA Charitable Rollover provision, established under the Pension Protection Act, allows individuals who have reached age 70½ to donate up to $100,000 to charitable organizations directly from their IRA, without treating the distribution as taxable income. In order to qualify, contributions must go directly to a public charity and be made from traditional IRAs or Roth IRAs. Donors may receive no goods or services in return for their contributions, and must obtain written documentation of their contribution from each recipient charity.
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. 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 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). Please note that if you have already taken your minimum distribution for 2015 you can still make a tax deductible donation to Island Harvest Food Bank. If you intend to take your minimum distribution in 2016, you will now be able to make a contribution directly to Island Harvest Food Bank and qualify for this provision.
· 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 Island Harvest Food Bank as a 501 c3 public charity.
· Distributions can only be made from traditional Individual Retirement Accounts or Roth IRAs.
· You may not receive any goods or services in return for your charitable IRA rollover contribution in order to qualify for tax-free treatment.
Please check with your financial advisor about the best way to take advantage of this opportunity. Some restrictions apply.
For more information about making a IRA Rollover contribution to Island Harvest Food Bank please contact Stacy Parsell at (631) 873-4775