IRA Charitable Rollover
Since 2006, the current IRA charitable rollover allows taxpayers age 70 ½ or older to make charitable gifts up to $100,000 per year directly from their IRAs to eligible charities. The rollovers are excluded from the donor’s ordinary taxable income. Over the last few years, the sector has seen a surge in the number of rollover gifts, and it is expected to continue in importance as the average age of a U.S. donor is 64 and Baby Boomers account for 43 percent of all current charitable donations.
The Legacy IRA Act
The bipartisan Legacy IRA Act (S. 243/H.R. 2909) would expand the IRA Charitable Rollover by incentivizing seniors to make donations from traditional IRAs though life-income plans, such as charitable gift annuities or charitable remainder trusts, and increase rollover cap above $100,000 for the first time in more than 15 years.
With many Americans unable to afford to give away their retirement income during their lifetimes, this would give prospective donors one more critical way to support the philanthropic sector in a way that works for them. After the donor passes away, the remaining amount is used by the charity for their mission.
Forum’s Policy Position
Consistent with the Forum’s mission to enhance and expand philanthropy, the Forum supports public policy that encourages charitable giving. The Forum supports the role that tax policy plays in encouraging and structuring gifts that support nonprofit organizations and communities and has endorsed the Legacy IRA Act. Access the Forum’s letter of support on our Resources page.
Legacy IRA Act Coalition
The Forum is a member of the Legacy IRA Act Coalition, a national coalition of 60 nonprofit and philanthropic organizations working to pass this legislation to incentive more giving from seniors. Learn more and access resources on the Legacy IRA Act coalition website, including this recent coalition letter signed by the Forum.
Status of Legislation in Congress
On July 24, 2022, the Senate Finance Committee unanimously passed a modification of the Legacy IRA Act as part of a broader bipartisan retirement reform package, known as “SECURE 2.0.” This change in law, which has already passed the House by a vote of 414-5 as H.R. 2954.
The modification of the Legacy IRA Act supported by the House and passed by the Senate Committee would expand the IRA Charitable Rollover by incentivizing seniors to make charitable donations with tax-free IRA rollovers through life-income plans such as charitable gift annuity or charitable remainder trust with a one-time limit of $50,000. The rollover cap would also be permanently raised from $100,000 to reflect inflation.
SECURE 2.0 was introduced by House Ways and Means Chairman Neal (D-MA) and Ranking Member Brady (R-TX) and Senate Finance Committee Chairman Wyden (D-OR) and Ranking Member Crapo (R-ID).
The original stand-alone Legacy IRA Act (S. 243/H.R. 2909), before it was incorporated into the larger retirement reform package, was championed by Representatives Beyer (D-VA) and Kelly (R-PA) and Senators Stabenow (D-MI) and Cramer (R-ND).