Three tax incentives for charitable giving are now permanent. The tax extenders package, known as the Protecting Americans from Tax Hikes (PATH) Act of 2015, includes a number of provisions, including the IRA charitable rollover and enhanced deductions for the donation of food inventory and land conservation easements.
The law extends the special IRA rollover incentive for gifts completed in 2015 and future years, allowing people who are 70½ or older to donate up to $100,000 to a charity directly from their Individual Retirement Accounts (IRA) without treating the distribution as taxable income.
JB+A encourages nonprofits to reach out to donors who were waiting on the IRA Rollover provision and let them know the President has signed the bill into law.
Prepare a message to update all donors about the opportunity to make charitable gifts through IRA rollovers. Educate them about how the rollover provision is a powerful and unique way they can support charitable causes they care about.
We’ve provided sample language for messaging below:
Tax-free IRA Gifts
For those 70½ or older, it is once again possible to make tax-favored charitable gifts from IRA accounts.
The President recently signed into law legislation that retroactively extends the charitable IRA rollover for 2015 and makes this provision permanent for future years. A total of up to $100,000 can be transferred directly from IRAs to one or more qualified charities such as <Organization Name>, free from federal income tax each year. There may also be state income tax savings.
Amounts given in this way count toward required IRA minimum withdrawal amounts for the year of the gift. Check with your IRA administrator or your tax advisor for more information on how to make such gifts.
These incentives strengthen the charitable community’s ability to improve American lives and our communities, and nonprofit advocacy groups have pushed for years to make these incentives a permanent part of the tax code. This is a victory for fundraising and philanthropy.
JB+A will continue to monitor and alert you on other public policy issues affecting philanthropy going into 2016.