Charitable IRA Rollover 2015

The IRA Charitable Rollover provision has been renewed for 2015!  To make a gift from your Individual Retirement Account (IRA) to support students at Onondaga Community College, with no tax penalty, an IRA charitable roll-over may be an excellent option.

For example a donor age 70 1/2 and over who makes a $10,000 IRA roll-over gift to Onondaga Community College, by year-end 2015 will see the following benefits:

  • Onondaga Community College receives $10,000 to support students
  • Donor incurs no income tax on IRA withdrawal
  • Donor saves $2,500 (25% tax bracket) on taxes against required minimum distribution
  • IRA roll-over gifts up to $100,000 are free from income tax

If you would like to take advantage of this year-end tax benefit, please call Lisa Moore at 315-498-6060.  


Frequently Asked Questions   

What is a charitable IRA rollover?

The charitable IRA rollover, or qualified charitable distribution (QCD), is a special provision allowing certain donors to exclude from taxable income -- and count toward their required minimum distribution -- certain transfers of Individual Retirement Account (IRA) assets that are made directly to public charities, including the Onondaga Community College Foundation, Inc.

How does this help me?

A charitable IRA rollover makes it easier to use IRA assets, during lifetime, to make charitable gifts.

Why will lifetime IRA gifts be easier?

Under current law, withdrawals from traditional IRAs and certain Roth IRAs are taxed as income, even if they are immediately directed to a charity. The donor receives a tax deduction for his or her donation, but various other federal, and sometimes state, tax rules can prevent the deduction from fully offsetting this taxable income. As a result, many donors have chosen not to use IRA assets for lifetime gifts. The charitable IRA rollover eliminates this problem for a limited time.

What gifts would qualify for a 2015 charitable IRA rollover?

A gift that qualifies, technically termed a “qualified charitable distribution,” would be:

  • Made by a donor age 70 1/2 or older
  • Transferred from a traditional or Roth IRA directly to a permissible public charity, such as the Onondaga Community College Foundation, Inc.
  • Completed in calendar year 2015 for the 2015 tax year      
Is there a limit on the amount that can be given?

Yes, there is a limit. An individual taxpayer's total charitable IRA rollover gifts cannot exceed $100,000 per tax year.

What about the required minimum distribution?

If you have not already taken your required minimum distribution in a given year, a qualifying rollover gift can count toward satisfying this requirement.

Is an income tax deduction also available?

No. The gift would be excluded from income, so providing a deduction in addition to that exclusion would create an inappropriate double tax benefit.

Why are Roth IRAs included? Aren't withdrawals from a Roth IRA tax-free?

Withdrawals from a Roth IRA may be tax-free only if the account has been open for longer than five years or if certain other conditions apply. Otherwise, withdrawals are taxed as if they came from a traditional IRA. Therefore, certain Roth IRAs could benefit from a charitable IRA rollover.

Can other retirement plans, such as 401(k) and 403(b) accounts, be used?

No. However, it may be possible to make a tax-free transfer from such other accounts to an IRA, from which a charitable rollover can then be made.

Can a gift be made to any charity?

No. Excluded are:

  • Donor advised funds
  • Supporting organizations
  • Private foundations

Who can benefit from using the charitable IRA rollover to make a gift?

  • Persons with significant assets in an IRA
  • Persons making gifts that are large, relative to their income. (Because a charitable rollover is not included in taxable income, it does not count against the usual percentage limitations on using charitable deductions.)
  • Persons having so few deductions that they choose not to itemize  
Can a rollover gift be used to fund a charitable remainder trust or charitable gift annuity?

No. The donor can receive no benefits in return for the gift. This includes life income plan payments.

Are there any benefits that a donor can receive?

The only permissible benefits from a charitable IRA rollover gift are those that would not reduce the tax deduction for which the donor would have otherwise qualified.

What if a withdrawal does not meet the requirements of a charitable IRA rollover?

It simply will be included in taxable income as other IRA withdrawals currently are.

Is the charitable IRA rollover right for everyone?

While this is a great option, other types of gifts may provide donors with more tax benefits. As with any gift planning question, donors should consult their tax professionals for specific advice.

Can I still make a gift with an IRA beneficiary designation?

Absolutely! Whether or not you choose to make a charitable IRA rollover gift, you can still designate the Onondaga Community College Foundation Inc. as a beneficiary to receive IRA assets after your lifetime. The lifetime charitable IRA rollover is simply another option for donors who would like to see their philanthropy at work now.

If I made a charitable IRA rollover gift in other tax years, can I do this again for the 2015 tax year?

Yes. Even if you and your spouse both made the maximum $100,000 charitable IRA rollover gift to a qualifying charity during one or more previous years, you can still take advantage of this legislation again for the 2015 tax year.

More questions?

Contact the Onondaga Community College Foundation Office by phone at 315-498-6060 or email sunyoccfoundation@sunyocc.edu