• Overview
  • Disclaiming Inherited IRAs
  • Qualified IRA Charitable Distribution Rule Extended Through 2009
  • 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)

Qualified IRA Charitable Distribution Rule Extended Through 2009

If you're over age 70½, have an IRA, and plan to give money to charity, the Emergency Economic Stabilization Act of 2008 (EESA), signed by President Bush into law on October 3, offers an extension of the charitable IRA rollover rule that expired at the end of 2007.

This earlier legislation, which was part of the Pension Protection Act of 2006, enabled IRA owners over age 70½ to make tax-free distributions of up to $100,000 directly to a qualified charitable organization. The EESA extends these distributions for the current tax year through December 31, 2009.

Please note that IRS rules allow these distributions from Traditional IRAs and Roth IRAs, but not from SEP IRAs, SIMPLE IRAs or employer-sponsored retirement plans. Also, to receive tax-free treatment, your donation must be made to a qualified charity, which doesn't include certain types of charitable giving such as 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.

How to Make a Tax-Free 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 2008 or 2009 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.

To learn more, consult with your tax advisor or call 1 800 842-2776 to speak with a consultant.

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.