Senate Votes to Extend Charitable IRA Rollover

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In an effort to encourage older Americans to give charitably out of their Individual Retirement Accounts, the charitable IRA rollover was enacted in 2006. This means that IRA owners age 70-1/2 or older can donate up to $100,000 per year directly from their IRA without paying taxes as income. Other charitable provisions that will be extended include conservation donations of land, and incentives encouraging farmers to donate to food banks.

These provisions, which had expired on December 31, 2013, would be retroactively extended until December 31, 2014. The House had voted to extend them this summer, and the Senate has passed it December 16. President Obama is expected to sign it into law.

In the past, these tax extensions made near the end of the year were for two years, retroactively covering the current year and the year following. This extension, however, only covers 2014. There is little certainty about what will happen next year. A separate bill has been introduced in the House to make these tax breaks permanent.

Nonprofit organizations should act quickly to promote this information:

  • Follow up with any donors who were waiting on this provision and encourage them to be ready to make this gift as soon as it is signed. They must make gifts by December 31.
  • Contact donors via email as quickly as possible to inform them of the approval for any donors still considering making a year-end gift.