University of Southern Indiana

IRA Charitable Rollover

In December 2015, Congress reinstated a law that allows you to make a tax-free gift from your individual retirement account (IRA). Known as the IRA “charitable rollover,” this law no longer has an expiration date, so you are free to make annual gifts to the USI Foundation from your IRA any year well into the future.

The law allows individuals who have reached the age of 70 ½ and older the ability to transfer up to $100,000 from their IRA directly to a qualified charitable organization without being subject to income taxes on the distribution.

In December 2019, Congress also approved a federal budget with a provision increasing the age for mandatory withdrawal from retirement accounts to 72 – effective for people who turn 70 ½ on January 1, 2020 or afterward. However, anyone who is 70 ½ years of age or older can still withdraw money from retirement accounts tax free if the dollars are issued directly to charity.

The legislation does not permit direct transfers to charitable trusts, donor advised funds, charitable gift annuities or supporting organizations.

Information cited here is from the January 2020 newsletter published by The Fund Raising School, Indianapolis, Indiana. 

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