Special Charitable Contributions for Certain IRA Owners
As an alternative method for donating to a charity, certain taxpayers may
transfer funds from their IRA to an eligible charitable organization. Here are
ten things taxpayers who are thinking about making such a donation will need to
1. The IRA owner must be age 70 ½ or older.
2. The donor must directly transfer the money tax-free to an eligible
3. The maximum amount that an IRA owner may transfer annually tax-free is
$100,000 to an eligible organization.
4. This option, created in 2006 and recently extended through 2009, is
available to eligible IRA owners, regardless of whether they itemize their
5. Distributions from employer-sponsored retirement plans, including SIMPLE
IRAs and simplified employee pension plans – commonly referred to as SEP Plans –
are not eligible.
6. To qualify, the funds must be contributed directly by the IRA trustee to
the eligible charity.
7. Amounts transferred are not taxable and no deduction is available for the
amount given to the charity unless nondeductible contributions are transferred.
8. Not all charities are eligible. For example, donor-advised funds and
supporting organizations are not eligible recipients.
9. Transferred amounts are counted in determining whether the owner has met
the IRA’s required minimum distribution rules. Where individuals have made
nondeductible contributions to their traditional IRAs, a special rule treats
transferred amounts as coming first from taxable funds, instead of
proportionately from taxable and nontaxable funds, as would be the case with
regular distributions. If nondeductible contributions are transferred to an
eligible organization, a charitable contribution deduction may be allowed if
10. More information about qualified charitable distributions can be found in
Publication 590, Individual Retirement Arrangements.