Expansion of the IRA Charitable Rollover was signed into law on December 29, 2022, by President Biden as part of the Omnibus Spending Bill, which among its provisions was the Securing a Strong Retirement Act. This law enables the maximum annual contribution (currently $100,000) to an IRA Charitable Rollover  to increase each year based on the annual rate of inflation (the Consumer Price Index or CPI). Additionally, the legislation allows seniors to use their IRA to fund a gift annuity, enabling middle-income seniors to make charitable contributions while maintaining retirement income. In 2024 the CPI inflation adjustment provided for under the law raised the maximum annual contribution limit from $100,000 to $105,000. The new limit for 2025 is expected to be announced by the IRS in January.

IRA Charitable Rollover: What is it?

The IRA charitable rollover allows taxpayers to make tax-free charitable gifts directly from their Individual Retirement Accounts to eligible charities, 

Through the IRA Charitable Rollover, taxpayers can meet the annual Required Minimum Distribution, exclude the distributions from their taxable income, and simultaneously support the charities of their choice.

Why do nonprofits care?

This is a significant incentive for individual donors to give to charitable causes. 

With 10,000 Baby Boomers turning 65 each day, an expansion of this law could mean significantly more resources going to support nonprofits and charitable causes.

Expanding the IRA Charitable Rollover is important not just in the case of large donors, but also for mid-level and smaller donors, as the average IRA Charitable Rollover gift is $7,600.

What is the Ideal Policy?

The Nonprofit Alliance calls on Congress to expand the IRA Charitable Rollover legislation. Ideally, Congress would lower the minimum age to establish an IRA Charitable Rollover from 70 1/2 to 65.

What is the current situation?

Under current law individuals are required to wait until age 70 1/2 before establishing an IRA Charitable Rollover.