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Public Policy
IRA Charitable Rollover
Resource Center
Restoring the IRA Charitable Rollover
The IRA charitable rollover was a tax incentive in effect in 2006 and 2007 that allowed individuals aged 70½ and older to donate up to $100,000 from their Individual Retirement Accounts (IRAs) and Roth IRAs to public charities without having to count the distributions as taxable income. Because the provision expired on December 31, 2007, it will take Congressional action to restore it.
Special Alert
Independent sector and a coalition of charities sent a July 15 letter to all Senate members requesting that they take immediate action to restore the package of expired charitable giving tax incentives.
Current Status
By a vote of 52 to 44, the Senate failed June 16 to end debate on a procedural motion to proceed to the House-passed bill, H.R.6049, which would provide a one-year extension of expired or expiring tax provisions, including an extension of the IRA Charitable Rollover and other charitable giving incentives. When the Senate takes up H.R.6049 Senate Finance Chairman Max Baucus (D-MT) intends to offer a substitute amendment that would add one-year fix to the alternative minimum tax and additional energy provisions. The Baucus amendment would offset the cost of all of the expired and expiring tax provisions, but not the AMT patch. Republican Leader Mitch McConnell (R-KY) introduced a bill June 6, titled the Alternative Minimum Tax and Extenders Tax Relief Act of 2008 (S.3098), that would extend most of the same tax provisions through 2009 and fix the AMT, but would not include revenue raisers to offset their costs. The next steps on the bill in the Senate are unclear as Democratic and Republican leaders seek to work out their differences over the question of whether to pay for the extension of the expired and expiring tax incentives.
Members of the nonprofit community are encouraged to continue stressing the urgency of extending the giving incentives and letting Senators know the impact they are having in their states.
See Take Action below for things you can do right now to help make this happen.
Separate bills have been introduced in the House and Senate to extend ( H.R.3596, S.2264 ) or expand ( S.819, H.R.1419 ) the IRA charitable rollover measure, but none is expected to be taken up separately from other tax provisions in this session of Congress. Recently, as part of the nonbinding Budget Resolution for fiscal year 2009, the Senate included a call for enacting the IRA rollover. This encouraging language is not in the House Budget Resolution and the difference will have to be worked out in a conference committee.
Why We Support It
Since enactment in August 2006, the IRA charitable rollover generated a significant amount of new charitable giving by eliminating the barrier in the tax law that had discouraged transfers from individual retirement accounts to charities. The giving incentive was particularly beneficial to those individuals who do not itemize their tax deductions and would not otherwise have received any tax benefit for their charitable contributions . The IRA charitable rollover enabled older Americans to make millions of dollars of new contributions to the nonprofits —including hospitals, museums, educational institutions, and religious organizations —that benefit people every day.
Take Action
We encourage IS members to urge their members of Congress to include the IRA rollover in 2008 legislation, retroactive to January 1. Here are three things you can do to make a difference:
- Send a Letter to your Senators
Senators need to know that people back home really do care about issues, and a thoughtful letter with real life experiences is still one of the most effective ways of communicating with policymakers. Click here for a sample letter that can be tailored to fit your organization. Please share with us any response you get.
- Talk to your Senators
A telephone call or in-person discussion with policymakers or their staff can help demonstrate the impact of the IRA charitable rollover on the lives of their constituents and make clear the urgency with which they must act to restore the legislation. Here are talking points you can use to bring the point home. Let us know what they have to say by dropping us an email at publicpolicy@independentsector.org.
- Send us your IRA charitable rollover success stories
Help us demonstrate how donations through IRA charitable rollovers have transformed lives and improved communities by e-mailing us at publicpolicy@independentsector.org.
Click here for Background Materials
Last updated: July 18, 2008
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