Legislation enacted in December 2015 authorized charitable gifts from IRAs for 2016 and future years. Among the provisions of the bill is an exclusion from gross income for income tax purposes of up to $100,000 (per IRA account owner) for “qualified charitable distributions” from an Individual Retirement Account (IRA). The distribution will count toward an individual’s Required Minimum Distribution (RMD).
To be a “qualified charitable distribution” the following must be met:
Deadlines for Gifts
- The distribution must be made from an IRA (other retirement accounts are not eligible).
- The recipient must be an eligible charitable organization.
- The IRA’s owner must be at least age 70½.
- The distribution must be made directly to the charity by December 31.
- The distribution must otherwise be fully deductible as a charitable contribution.
- The distribution must otherwise be included in gross income.
Distributions by check must have a postmark (on the envelope) no later than December 31 of the same tax year. Distributions by wire transfer must be received in Salus University’s account by December 31. There will be no
opportunity to make IRA rollovers retroactively in the spring. Because of the high volume of year-end gifts, contact your IRA administrator as soon as possible to allow enough time for them to issue your gift before the end of December.
Donors of qualified IRA gifts do not receive a federal income tax charitable deduction for the IRA gift, as they are not being taxed on the withdrawal.
Additionally, qualified IRA gifts are not subject to percentage of adjusted gross income (AGI) limitations for charitable contributions and are not reportable as income for federal income tax or for Social Security income purposes. The amounts withdrawn are not subject to state income taxes in most states. Donors who do not itemize deductions on their federal income tax returns may benefit from qualified IRA gifts for their exclusion from gross income. Amounts withdrawn from an IRA account are removed from the donor’s taxable estate. Talk to your tax advisor to see which benefits apply to your specific situation.
Gifts that are Not
Eligible for IRS Rollover Gifts
Most gifts to a private foundation, donor-advised fund, or supporting organization are not eligible. Gifts to a charitable remainder trust, lead trust, pooled income fund, or charitable gift annuity are not eligible. Gifts for which the donor receives a benefit that reduces the donor’s tax deduction (such as tickets or dinner) are not eligible.
Gifts from other types of retirement funds such as 401(k), 403(b), SEP or SIMPLE plans do not qualify. However, donors may be able to make qualified transfers from their pension or retirement plan to their IRA, and then make a charitable gift from their IRA account.
How to initiate an IRA Charitable Rollover
Sample transfer instructions by check can be found here.
Our legal name is: Salus University
Our tax ID number is: 23-1413680
Our address and contact information regarding charitable giving is:
Office of Institutional Advancement
8360 Old York Road
Elkins Park, PA 19027
Please notify the Office of Institutional Advancement when you have contacted your IRA administrator to authorize a transfer to the University. Also indicate if the contribution is to be used for a particular purpose. Please contact Lynne Corboy, Director of Institutional Advancement with any additional questions at 215-780-1392 or Lcorboy@salus.edu
This is not intended to be legal or tax advice. We encourage you to consult your own legal or tax advisor.