President and Congress Pass IRA Rollover Legislation

Congress and the President passed the Protecting Americans from Tax Hikes Act of 2015, or PATH, on Friday, December 18, 2015. This legislation provides a critical benefit to donors.

The provision allows IRA owners 70½ and older to donate as much as $100,000 of account assets a year directly to one or more charities, including A New Leaf. The donations count as part of the IRA owner’s required annual withdrawal—so if the owner’s required payout is $25,000 in 2015 and she donates $10,000 of IRA assets to A New Leaf, she only has to withdraw $15,000 from the IRA. The lower income can help charitably minded donors avoid taxes on Social Security benefits, higher Medicare premiums, higher tax brackets, and surtaxes such as the 3.8% net investment income tax.

To qualify for this break, the donation of IRA assets must be to a charity, not a donor-advised fund or grant-making foundation, and the assets must be transferred directly from the IRA custodian, such as a brokerage firm or bank, to the charity. The law is retroactive to January, so it blesses IRA transfers made earlier this year. Gifts for 2015 must be made by the year-end. For more information about this legislation or to give to A New Leaf, please call Deborah Oberhamer at 480-464-4648.