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New law extends IRA charitable rollovers

Updated December 21, 2010

A new bill signed by President Obama this afternoon will allow taxpayers to make tax-free donations to charities from traditional and Roth IRAs for 2010 and 2011.

Among other measures, the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 extends the IRA Charitable Rollover. That provision allows people 70 ½ and older to donate up to $100,000 a year tax free to qualifying charities. The provision expired in 2009.

“Over the past several years this provision has been extremely popular with CFCA donors," said Michael Calabria, CFCA director of planned giving. "They have used tax-free distributions from their IRAs to pre-pay sponsorship, fund higher education costs for their sponsored child, or simply as contributions to the CFCA general fund.”

The extension is retroactive, which means it will apply to distributions made through January 2011. To qualify for the current tax year, donations from IRAs must be received directly from trustee financial institutions no later than the end of January 2011.

For more information, contact a CFCA representative at (800) 875-6564 or (913) 384-6500.

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