The Benefits of a Tax-Free Gift
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United Way of Greater Milwaukee & Waukesha County

The Benefits of a Tax-Free Gift

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You may have heard the news – the IRA Charitable Rollover provision is back! But what does that mean?

This provision allows individuals who have reached age 70½ to donate up to $100,000 to charitable organizations directly from their IRA, without treating the distribution as taxable income. Basically, your 2014 end-of-year charitable giving can be made tax-free from your required IRA distribution.

So what’s the catch? The distribution must be taken by December 31, 2014. 

A few notes about this opportunity:

  • This provision is retroactive from January 1, 2014, meaning any deduction taken in 2014 that was paid directly to a nonprofit is eligible for the tax savings.
  • While you cannot claim a charitable deduction for IRA gifts, this distribution from your IRA counts toward your minimum required distribution for the account AND does not trigger income tax for you.
  • In order to qualify, contributions must go directly to a public charity, like United Way, and be made from traditional IRAs or Roth IRAs. Donors may receive no goods or services in return for their contributions, and must obtain written documentation of their contribution from each recipient charity.
  • The IRA provider can assist in facilitating the transfer, and while these transactions generally take a few weeks, providers are prepared to act quickly due to the severe time constraints of this provision.

United Way is happy to answer any questions about the IRA Charitable Rollover provision.