Ira charitable rollover gifts permanently extended
Use Your Traditional IRA to Make Your Charitable Gifts
The IRA Charitable Rollover provides you with an excellent opportunity to make a gift during your lifetime from an asset that would be subject to multiple levels of taxation if it remained in your taxable estate.
- You must be age 70½ or older at the time of gift.
- Transfers must be made directly from a traditional IRA account by your IRA administrator to the Harvard T.H. Chan School of Public Health. Funds that are withdrawn by you and then contributed do NOT qualify. Gifts from 401k, 403b, SEP and other plans do not qualify.
Benefits — qualified charitable distributions
- Can total up to $100,000.
- Are not included in your gross income for federal income tax purposes on your IRS Form 1040 (no charitable deduction is available, however).
- Count towards your required minimum distribution for the year from your IRA.
How do I make an IRA Charitable Rollover gift?
Suppose John wants to make a contribution to the Harvard T.H. Chan School of Public Health. He has $500,000 in his IRA and he wants the contribution to be $20,000. He can authorize the administrator of his IRA to transfer $20,000 to the Harvard T.H. Chan School of Public Health and $5,000 to himself. The $20,000 distributed to the Harvard T.H. Chan School of Public Health will not be subject to federal tax and will be counted toward his annual minimum required distribution.
Use our calculator at harvardchan.irarollover.info to estimate your MRD.
Questions and Answers
Who qualifies? Individuals who are age 70½ or older at the time of the contribution. (You have to wait until 6 months after your 70th birthday to make the transfer).
From what accounts can I make transfers? Transfers must come from your IRAs directly to Harvard University to benefit the Harvard T.H. Chan School of Public Health. If you have retirement assets in a 401k, 403b etc., you must first roll those funds into an IRA.
How will the Harvard T.H. Chan School of Public Health count the gift? We will give you full credit for the entire gift amount.
Can this gift help fulfill a pledge to the Harvard Chan School? Yes—just note in your letter that you are fulfilling a pledge. See sample letters.
What are the tax implications to me?
- Federal — You do not recognize the transfer to the Harvard T.H. Chan School of Public Health as income, provided it goes directly from the IRA administrator to us; therefore, you are not entitled to an income tax charitable deduction for your gift.
- State — Each state has different laws, so you will need to consult with your own advisors. Some states have a state income tax and will include this transfer as income. Within those states, some will allow for a state income tax charitable deduction and others will not. Other states base their state income tax on the federal income or federal tax paid. Still other states have no income tax at all.
Does this transfer qualify as my required minimum distribution? Yes.
Can my spouse also make an IRA Charitable Rollover, even if we are married and file jointly? Yes, every individual can use the IRA Charitable Rollover for up to $100,000 each year.
For more information, please contact us.
Important: Be sure to check with your financial advisor to determine whether this provision is right for you. This information is not meant as tax or legal advice.