Charitable IRA Rollover

President Obama signed the Protecting Americans from Tax Hikes Act (PATH Act) in December 2015 and, with it, he made the charitable IRA rollover a permanent law. The rules for making a qualified charitable distribution from an IRA are that the donor must be at least 70 ½, the gift must be made directly from a traditional or Roth IRA to a public charity such as Lighthouse Guild. Total distributions cannot exceed $100,000 in a year.

To Qualify

  • You must be age 70 ½ or older at the time of gift.
  • Transfers must be made directly from a traditional IRA account by your IRA administrator to Lighthouse Guild. Funds that are withdrawn by you and then contributed do NOT qualify. Gifts from 401k, 403b, SEP and other plans do not qualify.
  • Gifts must be outright. Distributions to donor-advised funds or life-income arrangements such as charitable remainder trusts and charitable gift annuities are not allowed.

Benefits of qualified charitable distributions

  • Count towards your minimum required distribution for the year from your IRA.
  • Can total up to $100,000.
  • Are not included in your gross income for federal income tax purposes on your IRS Form 1040 (* see note below).

How do I know if an IRA Charitable Rollover is right for me? You are at least 70 ½, and:

  • You do not need the additional income necessitated by your minimum required distributions, OR
  • Your charitable gifts already equal 50% of your adjusted gross income, so you do not benefit from an income tax charitable deduction for additional gifts, OR
  • You do not itemize deductions, OR
  • You are subject to income phase-outs on your income tax deductions.

What is the procedure to execute an IRA Charitable Rollover?

We offer a sample letter you can send to your plan provider to initiate a rollover. Make sure that you contact us when you direct the rollover so we can look for the check from your IRA administrator.

For more information, please Annette Dorsky, Director, Gift Planning, at (646) 874-8443 or dorskya@lighthouseguild.org.

* Although charitable IRA contributions are not included in your gross income for federal income tax purposes, they do not qualify as charitable deductions.