Independent Sector | Public Policy -- Tax Issues

Public Policy

IRA Charitable Rollover -- History
Tax-Free Withdrawals from IRAs for Charitable Contributions

Current Law
President Bush signed the IRA Charitable Rollover into law on August 17, 2006, as part of the Pension Protection Act of 2006, which also included a series of other important charitable giving incentives and safeguards.

Learn more about current IRA Charitable Rollover, including tools for donors and charities.

In Brief: What is the IRA Charitable Rollover?
Taxpayers age 70½ and older are required to make annual distributions from their Individual Retirement Accounts (IRAs). The distributions are included in the taxpayers’ adjusted gross income (AGI), and taxpayers pay taxes on them. The IRA Charitable Rollover permits taxpayers to make donations directly to charitable organizations from their IRAs or Roth IRAs without counting them as part of their AGI and, consequently, without paying taxes on them.

Previous IRA Rollover proposals have included various versions of this incentive. See the chart below for details.

Independent Sector Position
Independent Sector supports allowing individuals to make direct charitable contributions from their IRA and other retirement account assets without incurring adverse tax consequences.

Previous Legislative Proposals

109th Congress
Legislation	Description of Proposal	IS Actions	Final Outcome
H.R. 4297, Tax Relief Extension Reconciliation Act of 2005	Although excluded from the enacted legislation, the Senate originally included a package of charitable provisions in H.R. 4297. The Senate's IRA Rollover provision would have allowed donors age 59½ and older to rollover amounts from a traditional or Roth IRA to create a life income gift to a charity; and would have permitted donors age 70½ and older to make direct cash contributions to charity.	Independent Sector joined with other charities in sending a letter (PDF) to the conference committee tasked with reconciling differences between the Senate and House legislation. IS asked them to include the IRA rollover provision in the final bill.	H.R. 4297, as enacted, did not include the IRA Charitable Rollover or other charitable provisions.
S, 1366 / H.R. 1607, The Public Good IRA Rollover Act	Would have allowed donors age 59½ and older to rollover amounts from an IRA to create a life income (deferred) gift to a charity; and would have permitted donors age 70½ and older to make direct cash contributions to charity.	IS joined over 80 nonprofit organizations in signing a letter of support to Representatives Wally Herger (R-CA) and Earl Pomeroy (D-ND).	Neither bill passed out of committee.
S. 1780, The CARE Act of 2005	Would have allowed donors age 59½ and older to rollover amounts from a traditional or Roth IRA to create a life income gift to a charity; and would have permitted donors age 70½ and over to make direct cash contributions to charity.	IS joined 20 other nonprofit organizations in signing a letter (PDF) in support of the CARE Act.	Did not pass out of committee.
H.R. 3908, The Charitable Giving Act of 2005	Would have allowed donors age 70½ and older to rollover amounts from an IRA as direct or deferred gifts.	Diana Aviv, IS President and CEO, testified (PDF) at the May 25, 2006, House Committee on Small Business Subcommittee on Rural Enterprises, Agriculture, and Technology hearing on H.R. 3908.	Did not pass out of committee.
108th Congress
Legislation	Description of Proposal	IS Actions	Final Outcome
S. 476, CARE Act	Would have permitted donors age 59½ and older to rollover amounts from traditional or Roth IRAs to create a life income gift to charity. Donors aged 70½ and older would have been able to make direct cash contributions to charity.	IS joined over 40 organizations in a letter (PDF) of support to the White House. IS sent a letter of support to the White House. IS joined 20 organizations on a letter to Senators William Frist (R-TN) and Tom Daschle (D-SC).	Passed in the Senate. Not brought to conference before end of legislative session.
H.R. 7, The Charitable Giving Act	Would have allowed individuals 70½ years and older to make direct or deferred gifts from their individual retirement accounts to charity.	IS joined over 40 organizations in a letter (PDF) of support to the White House. IS sent a letter of support to the White House.	Passed in the House. Not brought to conference before end of legislative session.
107th Congress
Legislation	Description of Proposal	IS Actions	Final Outcome
CARE Act of 2002	Would have permitted donors aged 59½ and older to rollover amounts from traditional or Roth IRAs to create a life income gift to a charity. Donors aged 70½ and older would have been able to make direct cash contributions to charity.	Over 110 organizations joined IS on a letter supporting the CARE Act.	Passed committee, but not brought to Senate floor.

Last updated: December 4, 2006