The CARES Act passed by Congress in March provided stimulus money to millions of Americans, and it also gave retirees a reprieve from having to take mandatory annual withdrawals from their retirement savings, including 401(k) plans and individual retirement accounts.
Qualified Charitable Distribution from IRAs Permanently Extended
Officially approved by Congress on December 18th, 2015, there will be no more waiting until the final weeks of December (or beyond) to see if Congress will extend the Qualified Charitable Distribution from IRAs. The Protecting Americans from Tax Hikes (PATH) Act of 2015 includes a provision to permanently extend the ability of individuals at least 70½ years of age to exclude from gross income qualified charitable distributions from Individual Retirement Accounts (IRAs) of up to $100,000 per taxpayer in any tax year.
Qualified Charitable Distributions from IRAs on Hold in 2015
On December 16, 2015, there was an update to this post.
Before reading this, please reference the up-to-date information at:
Qualified Charitable Distribution from IRAs Permanently Extended
For those of you at least 70½ years old, you are probably very aware of minimum required distributions (MRDs) that you are required to withdraw every year from your retirement account(s). What you may not know is that The Pension Protection Act of 2006 enabled IRA owners, age 70½ or over, to directly transfer up to $100,000 per year tax-free to an eligible charity. This option could be used for distributions from IRAs, regardless of whether the owners itemize their deductions. Moreover, the transfer counts as your required minimum distribution (RMD) but does not boost your adjusted gross income. As of this writing, however, Congress has not passed legislation permitting tax-free transfers from IRAs to charity.