IRA Charitable Rollover

IRA CHARITABLE ROLLOVER

In December 2015 Congress made permanent the IRA charitable rollover, which is a great opportunity for donors and charities alike.

Included in the PATH (Protecting Americans from Tax Hikes) Act of 2015, the legislation makes permanent the IRA charitable rollover, along with two additional charitable giving incentives - the food donation tax deduction provision and the enhanced tax deduction for conservation easement donations.

This is great news for charities and donors. Individuals aged 70 ½ or older may transfer up to $100,000 from their IRAs directly to a qualified charity, such as the West Virginia University Foundation (to benefit a school, college or unit of WVU) and will not have to pay income tax on this rollover.

Here are important provisions:

  • The donor must be age 70 ½ or older on the day of the gift.
  • The donor transfers up to $100,000 directly from the donor’s IRA to one or more qualified charities, such as the WVU Foundation. 
  • The donor DOES NOT pay income tax on this gift. The transfer generates neither taxable income nor a tax deduction, so a donor benefits even if they don’t itemize their deductions.
  • This transfer can satisfy all or part of the required minimum distribution (RMD) for the year.
  • Transfers from an IRA may not be used to fund a gift annuity or charitable remainder trust.
  • This is available only to Individual Retirement Accounts (IRA), and not to other types of retirement plans.
  • If a donor is a West Virginia resident, the state provides no income tax deduction for charitable contributions. Donors will save taxes by making a transfer from their IRA rather than from their checking account. While other states do allow for charitable income tax deductions, similar situations to West Virginia’s exist in Ohio, Indiana, Massachusetts, Michigan, and New Jersey. As always, donors should consult their tax advisor or financial planner.

Contact Karen E. Galentine, Director of Development for the School of Public Health at kegalentine@hsc.wvu.edu, (O) 304-293-1828 or (M) 304-288-3436 for additional information on making an IRA Charitable Rollover to benefit the School of Public Health or another part of West Virginia University.