• Overview
  • Disclaiming Inherited IRAs
  • IRA Charitable Distributions
  • Estate Planning 101: Fitting Your Assets into Your Estate Plan (PDF)
  • Gifts to Individuals Can Benefit Your Estate (PDF)
  • Estate Planning Scenarios for the Single Person (PDF)

IRA Charitable Distributions

Under the Pension Protection Act of 2006, if you're an IRA owner over age 70½ who wishes to give money to charity, you can make tax-free IRA distributions of up to $100,000 to public charities. This new provision will remain in effect only for the 2006 and 2007 tax years. The IRS allows these distributions from Traditional IRAs and Roth IRAs, but not from SEP IRAs, SIMPLE IRAs or employer-sponsored retirement plans.

To receive tax-free treatment, your donation must be made to a qualified charity, which doesn't include gifts to grant-making foundations, charitable gift annuities and donor-advised funds. If your charity qualifies, you can use your donation to meet your minimum distribution requirements.

About your donation

Your donation must be made directly from your IRA to the charity you select. If you make a qualified contribution to a charity for the 2007 tax year, you'll see this contribution as a regular IRA distribution on your Form 1099-R. However, this doesn't mean that your distribution will be taxable; the IRS has introduced a procedure on Form 1040 for taxpayers who are eligible under the new law to exclude direct distributions to charities from their IRAs from being taxed.

For additional information about this new law, consult with your tax advisor, read Understanding the Pension Protection Act of 2006: What the Changes Mean to You (PDF) , or call 1 800 842-2776 to speak with a representative. You can also visit the IRS website for more detailed information.

The tax information contained herein (including any attachments) is not intended to be used, and cannot be used, by any taxpayer for the purpose of avoiding any tax penalties that may be imposed on the taxpayer. It was written to support the promotion of the products and services addressed herein. Taxpayers should seek advice based on their own particular circumstances from an independent tax advisor.