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Good News for IRA Charitable Rollovers

Will Wrobel photo
Will Wrobel photo

There’s some good news for anyone thinking of making a year-end gift to Keene State, while at the same time reducing your taxable income.  This week, Congress voted to extend the IRA Charitable Rollover through 2014. This provision, originally enacted as part of the Pension Protection Act of 2006, allows owners of a traditional or Roth IRA to instruct their IRA custodian to distribute directly to a public charity up to $100,000 without the distribution being included in federal taxable income, and that distribution will count toward the IRA owner’s mandatory withdrawal amount.

To qualify for IRA Rollover treatment, the donor must direct the IRA custodian to transfer funds directly to a charity. The donor must be at least age 70½ and the donee must be a tax-exempt organization—such as Keene State College—to which deductible contributions can be made.

The gift must be outright; rollovers to a planned gift, such as a gift annuity or a charitable remainder trust, do not qualify. Similarly, outright distributions to a charity from employer-sponsored retirement plans, such as Simple IRAs, 401(k)s, and 403(b)s, do not qualify. Also note that it may be possible to include IRA rollovers in a donor’s income for state and local tax purposes and may not earn an offsetting charitable deduction, depending on state and local law.   Dorothy Reed Megna ’58 and Nelson J. Megna ’59 utilized these provisions in 2013 to make a significant gift to create the Megna Family Scholarship Endowment to assist students enrolled in Keene State’s Teacher Education program. Other alumni have used it to make gifts of varying amounts to the College over the years. In all cases, the donors, Keene State College, and its students benefited!

Here’s some sample language for your IRA custodian (always consult your financial advisor to determine whether using the Pension Protection Act makes sense for you and your personal financial situation):


Sample Language for your IRA Custodian:

Congressional renewal of the IRA Charitable Rollover permits a rollover donation directly from an IRA to a qualified public charity. As the owner of IRA account [INSERT ACCT NUMBER] that is in the custody of your organization, I request that you transfer from that account the sum of $____ to Keene State College Development Office, 229 Main Street, Keene, NH 03435-2701. The Treasury Tax ID Number for Keene State College is: 02-6000937.

It is my intention to make a Qualified Charitable Distribution (QCD) to Keene State College from my IRA, which may fulfill part or all of my IRA required minimum distribution for this year.

This letter is sufficient authorization for you to make this QCD gift. However, if you require any further documents, please forward those to me for my signature.

Cordially yours,
[Your Name]


Questions? Please email Sean Gillery, Senior Major Gifts Officer, or give him a call at 603-358-2371. For more information, read IRA Rollovers and Tax Extenders.

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