Charitable Contributions from IRAs

Legislation recently passed by Congress and signed into law by President Obama on December 18, 2015, permanently extends the provision allowing direct charitable gifts from Individual Retirement Accounts (IRAs).

Under this law, known as the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), IRA owners age 70 ½ and older may donate as much as $100,000 a year directly to one or more qualifying charities from their IRAs. The direct donation counts as part of the owner's Required Minimum Distribution (RMD) and is excluded from income for tax purposes.

The donation must be distributed directly from the IRA custodian to the charity (i.e., from Pension Fund to the charity). Since the donated amount is not reported for income tax purposes, the IRA owner cannot take a tax deduction for the gift. The provision is retroactive to January, 2015. Direct charitable gifts from IRAs must be made by December 31, 2015 to take advantage of this provision. Specifically, Pension Fund must hear from you immediately pursuant to the specifics provided below if you wish to utilize the direct charitable gift option.

The provision applies only to Individual Retirement Accounts (IRAs) and does not apply to other types of retirement accounts, such as 403(b) Tax Deferred Retirement Accounts (TDRAs).

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