Incentivizing Giving through the IRA Charitable Rollover

If you are comfortable, you can contact Senator Crapo to communicate your opinion of the bipartisan Legacy IRA Act.
​
Background: In 2015, Congress passed the PATH Act, which included the IRA Charitable Rollover provision allowing individuals to make direct tax-free charitable gifts up to $100,000 annually from their IRA starting at age 70 ½. Since its enactment, the IRA Charitable Rollover has generated millions of dollars in new or increased contributions to local and national charities. The Legacy IRA Act builds on that success to expand the existing IRA Charitable Rollover, allowing seniors starting at age 65 to make tax-free IRA rollovers to charities through life-income plans (charitable gift annuity or charitable remainder trust).  It is estimated that seniors have up to $5 trillion in IRA assets. This offers a way for middle-income donors to combine charitable gifts with retirement income. It helps existing charities, as seniors typically make up more than half of their donors.

Score/Cost of the Bill The Joint Committee on Taxation has scored the Legacy IRA Act at $38 million per year. The cost is minimal because the income on any life income gift is fully taxable at ordinary income levels. Planned giving experts indicate that the Legacy IRA Act could raise up to $1 billion each year for charities.
 
Sample Language (replace italicized copy with your own):
 
The NAME relies on legacies and bequests to fulfill our mission of______serving X Idahoans each year. NAME averaged $X annually and received a total of $X of legacy and bequest revenue over the past 5 years. 
 
The expansion of the IRA Rollover is of even greater importance as charities like the NAME are serving more and more people due to the COVID-19 pandemic doing _________.  This legislation would offer Congress the opportunity to support middle-income seniors who have a charitable intent but still need retirement income and incentivize Giving through the IRA Charitable Rollover

• Since its enactment, the IRA Charitable Rollover has generated millions of dollars in new or increased contributions that benefit charities, such as the NAME, and our missions.
• Individuals age 72 and above must take mandatory distributions from their individual retirement accounts (IRAs). These distributions are fully taxed.
• The IRA Charitable Rollover allows individuals to give up to $100,000 annually of their IRA distributions directly to charitable organizations, such as NAME, without counting the distributions as income. –
• For charities across the country, IRA rollover gifts have increased over 70% in the past year due to demographic and tax changes.
• While this form of charitable giving by seniors is skyrocketing, at the same time, the latest IRS numbers indicate that Americans itemized $54 billion less in charitable contributions in the past year.
• Seniors are a large share of charities’ donor base and it is estimated that they have about $3 to $5 trillion in IRA assets.
• Because the IRA Charitable Rollover allows seniors to exclude charitable distributions from income and is not tied directly to the charitable deduction, taxpayers with significant IRA resources, regardless of itemizing status, will still benefit from this important charitable giving incentive.

 
Congress Should Support the Legacy IRA Act

• There are 45 national charitable partners are working to support the passage of the bipartisan Legacy IRA Act (S. 1257/H.R. 3832).
• The Legacy IRA Act is a bill that would expand the IRA Charitable Rollover by allowing taxpayers age 65 or over to direct up to $400,000 annually in IRA distributions to charities through split interest entities such as charitable gift annuities and charitable remainder trusts.
• The Legacy IRA Act will allow more seniors to benefit from the IRA charitable rollover and, who make up at least half of a charity’s most loyal donors, to make tax-free gifts and will also help charities continue raising the funds they need to achieve their critical missions.

 
THE ASK - We respectfully ask Senator Crapo  to support the bipartisan Legacy IRA Act language as it stands in the SECURE Act 2.0 retirement package from the House Ways and Means committee.

Contact Senator Crapo