WASHINGTON – On Tuesday, U.S. Senators Todd Young (R-Ind.), Michael Bennet (D-Colo.), James Lankford (R-Okla.), Catherine Cortez Masto (D-Nev.), and Maria Cantwell (D-Wash.) introduced the IRA Charitable Rollover Facilitation and Enhancement Act, legislation that would amend the tax code to support more charitable giving options for older Americans.
Under current law, American taxpayers age 70½ or older are allowed to make Qualified Charitable Distributions (QCDs) from an individual retirement account (IRA) to a qualifying 501(c)(3) charity without counting the distribution as taxable income. The law, however, does not allow these older Americans to make QCDs to a donor-advised fund (DAF) – an increasingly popular charitable giving account managed by a public charity. This has created an obstacle for donors who want to simplify and coordinate their charitable giving by supporting multiple charities with a single gift. The IRA Charitable Rollover Facilitation and Enhancement Act would remove this unnecessary barrier to generosity by amending the tax code to allow charitable rollovers from IRAs to DAFs.
“Charitable giving has long been a way for Americans to support their local communities and causes they believe in. Our bill will make a small fix to the tax code to enable more flexibility for older Americans to generously give to the people, places, and organizations they care about,” said Senator Young.
“The IRA Charitable Rollover Facilitation and Enhancement Act will streamline the charitable donation process, empower Coloradans to do more with their giving, and direct larger amounts back to Colorado communities,” said Senator Bennet. “Community foundations are one of the most powerful tools we have. They know their neighbors, understand local needs, and come up with creative ways to reinvest charitable contributions back into the places donors call home.”
“This bill makes a simple fix. It allows Qualified Charitable Distributions to work better with donor-advised funds, which help families set money aside and support the causes they care about over time. For smaller and rural charities in Oklahoma, that means more steady, local support. If we want stronger communities, we should make it easier for Americans to give and make a difference close to home,” said Senator Lankford.
“The current tax code makes it harder for generous Nevadans to give to charitable organizations,” said Senator Cortez Masto. “This simple, commonsense fix will make it easier for Americans to give donations to the causes that they value and will spur more people to invest in their communities.”
“Community foundations in Washington State do incredible work supporting multiple, community-based organizations—food banks, childcare centers, housing programs, health clinics, and environmental groups—many of which rely heavily on local philanthropy. This bill will make it easier for donors who want to use some of their retirement assets to help these smaller, local nonprofits that often get overlooked when gifting becomes complicated,” said Senator Cantwell.
The IRA Charitable Rollover Facilitation and Enhancement Act is supported by American Endowment Foundation, Community Foundation Awareness Initiative, Council on Foundations, National Association of Charitable Gift Planners, National Christian Foundation, National Philanthropic Trust, Philanthropy Roundtable, Ren, Indiana Philanthropy Alliance, and over 50 Indiana community foundations.
“Indiana has one of the strongest networks of community foundations in the nation, serving urban, suburban, and rural communities across our state. Community foundations exist to connect donors to local needs. In Indiana, many retirees rely on Qualified Charitable Distributions to support multiple hometown charities. Senator Young’s legislation removes an outdated barrier, restores donor choice, and gives community foundations the flexibility they need to help charitable dollars move efficiently and responsibly into local communities,” said Indiana Philanthropy Alliance Vice President Maddison Miller.
A full list of supportive organizations and statements can be found here. A letter of support from Indiana Philanthropy Alliance and over 50 community foundations can be found here.
U.S. Representatives Adrian Smith (R-NE-3) and Jimmy Panetta (D-CA-19) introduced companion legislation in the House last year.
Full text of the IRA Charitable Rollover Facilitation and Enhancement Actcan be found here.
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