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IRA Rollover Provision Included in Senate’s EXPIRE Act

The IRA Charitable Rollover provision, which allows donors age 70½ and older to exclude from their taxable income any IRA funds up to $100,000 that have been withdrawn and transferred to a charity when filing a tax return, is one step closer to being reinstated back into law.

Read AFP's Written Comments House Committee on Ways and Means Hearing on the Benefits of Permanent Tax Policy for America’s Job Creators (April 21, 2014)

The rollover provision expired on Dec. 31, 2013. It has been included in the Senate’s Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act, a tax extenders package introduced by Sen. Ron Wyden (D-OR), Chair of the Senate Finance Committee, meaning that the provision would be reinstated through Dec. 31, 2015 if the bill is enacted into law. You can read Sen. Wyden’s press release about the bill here.

The provision was originally enacted as part of the Pension Protection Act of 2006 and was reinstated a number of times, most recently in Jan. 2013 as part of the American Taxpayer Relief Act.

Urgency Needed: Last Extenders Bill?

What’s different this time around in moving the IRA Charitable Rollover provision is that the EXPIRE Act could be the last extenders bill for a long time. In his press release, Sen. Wyden stated, “Now that everybody knows what tax extenders are, and that it’s possible for Democrats and Republicans to share some ideas on reform, I want to be straightforward on one point – this will be the last tax extenders bill the committee takes up as long as I’m chairman. That’s why the bill is called the EXPIRE Act.  It is meant to expire.”

Because of this dynamic, AFP is working diligently to ensure that the IRA Rollover provision is made permanent beyond its potential expiration date of Dec. 31, 2015.

The Senate Finance Committee passed the EXPIRE Act on Apr. 3, 2014, and the full Senate is expected to take up the bill shortly after it reconvenes on April 28.

On the House side, the House Ways and Means Committee recently held a hearing on expired business tax provisions requiring extension. In response, AFP submitted the following comments.

How You Can Help

AFP urges members to reach out to their Members of Congress and urge them to 1) support the reinstatement of the IRA Rollover provision in the EXPIRE Act and 2) support the creation of a permanent IRA Rollover provision.

You can find your House Member’s contact information by entering your zip code here.

You can find your Senators’ contact information here.

Members can use these bullet points:

  • Tax incentives such as the IRA Charitable Rollover provision play a vital role in encouraging donors to make gifts. The rollover provision is a powerful and unique way that donors can support charitable causes in their communities.
  • Private donations help leverage the impact of government investments and allow charities to provide the programs and services that do much to augment the work of the government. In that sense, the IRA Rollover provision reduces the burden on the government while having a positive impact in our communities.
  • It is estimated that there is more than $3 trillion in retirement funds such as IRAs. Many individuals have more than sufficient funds to retire comfortably. Even if only a small percentage of these funds were donated to charitable purposes, it could add millions of dollars to support the vital work that nonprofit organizations do in communities across America. 
  • The IRA Charitable Rollover has worked very successfully over the last few years, but it would be far more effective if it were made permanent. Because donors are unable to count on the IRA Rollover being in effect every year, they rarely plan ahead to set aside funds to utilize the provision. Similarly, charities and financial planners cannot counsel donors about the IRA Rollover provision given the almost annual uncertainty surrounding it.
  • We believe that the provision’s impact could reach billions of dollars annually if it were made permanent or at least extended much longer than one or two years.

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