Make Your IRA Charitable Rollover Gift

Did you know you can reduce your taxes by making a gift from your IRA directly to charity? If you are 70 1/2 years old or older, you can make a charitable gift up to $100,000 directly from your IRA. This direct distribution can be made to a qualified charity such as your parish, a Catholic school, the Bishop’s Appeal, a diocesan ministry, the Catholic Foundation, or another Catholic charity.  

“At the Catholic Foundation we are seeing more and more families making a charitable gift through their IRA,” said Josh Diedrich, Catholic Foundation Executive Director. “Some families and individuals send a larger distribution to the Foundation with a list of the charities and amounts they would like to have distributed.  For example, one family sent the Catholic Foundation a charitable IRA distribution in the amount of $5,000.  They wanted $2,000 to be sent to their parish, $2,000 for the Bishop’s Appeal and $1,000 for their Catholic school. The Catholic Foundation processed those requests and the family only had to request the one distribution from their IRA. We are very grateful for their gifts which support the mission of the Church.”

An IRA charitable rollover gift is an easy way to help fulfill our Church’s mission and reduce your taxable income. Your gift will qualify for your required IRA minimum distribution. Also, you will not have to pay federal income tax on the amount given directly from your IRA to a charity. Qualified direct distributions made from your IRA are not subject to income tax.

In past years, a distribution from your IRA would have been taxed as ordinary income. However, Congress passed a law several years ago making the IRA charitable rollover permanent. Here is how the IRA charitable rollover works:

  1. You must be 70 1/2 years of age.
  2. Your gift must come from an IRA (not a TSA or 401k).
  3. Your gift is a direct transfer to a qualified charity such as the Catholic Foundation.
  4. The maximum amount you can transfer is $100,000.
  5. To qualify as an IRA charitable rollover, your gift must be made by December 31, 2021.

It is also important not to withdraw funds prior to making your gift. Instead, distribute the funds directly from your IRA to the qualified charity.

We encourage families interested in making an IRA charitable rollover gift to speak with their financial advisor. For more information about how you can benefit from an IRA charitable rollover, please contact your IRA administrator and/or tax preparer. Please consider a charitable rollover gift from your IRA to your parish, the Catholic Foundation, the Bishop’s Appeal, or other Catholic charity. Make your gift as soon as possible to avoid any processing delays at the end of December, and don’t miss the opportunity to make your IRA charitable rollover gift this year! For information about how your gift benefits the Church, contact your parish office, or the Catholic Foundation at 920-272-8197 or [email protected].

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