IRA Qualified Charitable Distributions

The IRA Charitable Rollover provision of the PATH Act (Protecting Americans from Tax Hikes, permanently signed into legislation by the President in December 2015) allows individuals who have reached age 70½ to donate up to $100,000 to charitable organizations directly from their Individual Retirement Account (IRA), without treating the distribution as taxable income.

Individuals may begin taking distributions from their Individual Retirement Accounts (IRAs) as early as age 59½, but are required to begin taking them at age 70½. Normally, these distributions are subject to income taxes unless they are made to a qualifying charity.

To qualify, the funds must be contributed to a public charity like the Blue Ridge Area Food Bank, and be made from traditional IRAs or Roth IRAs. Donors may receive no goods or services in return for their contributions, and must obtain written documentation of their contribution from each recipient charity.

These gifts count toward the required minimum distribution you must take annually from traditional IRAs, but aren’t included in your adjusted gross income thereby reducing your tax burden. To be clear, since the gifts aren’t counted in your income, you can’t claim an itemized charitable deduction for them as well.

The IRA rollover provision removes negative tax consequences and encourages Americans to give back to their communities during their lifetime.

Contact the company managing your IRA or call or email Karen Ratzlaff, Chief Philanthropy Officer, at 540.213.8404 to learn more about how the charitable IRA rollover provision can help you support the Blue Ridge Area Food Bank.

In case you need it for the required paperwork, our EIN or Tax Identification Number is 52-1202644.