In a Nutshell
An IRA charitable rollover may be a tax-smart way for you to make a gift to Hadassah.
If you are 70 ½ or older, the IRA charitable rollover provision of the Internal Revenue Code (now permanent!) allows you to transfer directly from your Individual Retirement Account (IRA) any amount up to $100,000 in the aggregate annually to all qualified charities, including Hadassah, without having to recognize those funds as income for federal tax purposes.
What are the requirements?
- Age: You must be at least 70½ years old at the time of the distribution.
- Limited to traditional or Roth IRAs. Section 401(k), 403(b), SEPs, and other tax-deferred retirement plans do not qualify; however, you may be able to roll such a plan into an IRA and then make a charitable rollover gift. If you are the beneficiary of an inherited IRA, you may also make an IRA charitable rollover, so long as you are 70 ½ or older.
- Amount. You may transfer up to $100,000 (total to all qualified charities), per calendar year. A married couple may transfer up to $200,000 (total to all qualified charities), if each spouse has at least $100,000 in his or her IRA. In order to receive the tax benefits in a particular calendar year, you must make the gift to Hadassah by December 31st of that year.
- Direct Transfer from IRA. Distributions must be made directly to Hadassah from your IRA; that is, the check from the IRA custodian must be made payable to Hadassah, or the funds must be wired directly to Hadassah. Many IRA custodians mail the check directly to Hadassah, but some mail the check to the donor, and the donor mails it to Hadassah. This is fine so long as the check is made payable to Hadassah. If the check is made payable to you and you endorse it over to Hadassah, the gift will not qualify as an IRA charitable rollover.
What are the advantages of an IRA Charitable Rollover Gift?
- Not recognized as income for federal income tax purposes. An IRA charitable rollover allows you to transfer ("roll over") funds directly from your IRA account to eligible charities like Hadassah without having to recognize those funds as income for federal tax purposes. You will receive no income tax deduction, but the distribution will also not count as income in the first place. Please check with your tax advisor or accountant with regard to any state income tax issues.
- Excluded from AGI. The funds transferred to Hadassah through an IRA charitable rollover are excluded from your Adjusted Gross Income (AGI) for federal income tax purposes.
- May satisfy required minimum distribution. The funds distributed may count toward your annual required minimum distribution from your IRA.
- May be used for a variety of purposes at Hadassah.The funds distributed may be used to make:
- your annual Keeper’s gift
- a payment on a pledge to Hadassah
- a new gift to Hadassah for Hadassah’s unrestricted charitable purposes or ongoing support of Hadassah Medical Organization (including medical research, patient care, treatment and services), the Sarah Wetsman Davidson Hospital Tower, yahrzeits, Youth Aliyah, or Young Judaea scholarships. Unfortunately, the law does not permit using an IRA charitable rollover gift to establish a charitable gift annuity or a charitable remainder trust.
If you would like to designate your IRA charitable rollover gift for another Hadassah purpose or project, please contact Isha Tendolkar at 212-303-8095 or firstname.lastname@example.org prior to making any rollover gift.
- May provide tax benefits even if you do not or cannot claim charitable deductions. For example, if you make charitable gifts but do not itemize your deductions on your federal tax return, or if your charitable deductions for the year already exceed 50% of your Adjusted Gross Income, you could still benefit from making an IRA charitable rollover gift because the funds are excluded from your federal taxable income. Please check with your tax advisor or accountant with regard to any state income tax issues.
How do I make an IRA Charitable Rollover Gift to Hadassah?
- Contact your IRA custodian to obtain the appropriate form to make an IRA charitable rollover. The form may refer to the rollover by its technical name, “qualified charitable distribution,” or QCD. If your IRA custodian requires you to submit your request by letter, please contact Isha Tendolkar at 212-303-8095 or email@example.com for a sample.
- On the form, specify the amount to be transferred to Hadassah to receive, identify Hadassah by Hadassah’s full legal name, Hadassah, The Women's Zionist Organization of America, Inc., and include Hadassah’s tax ID no. (13-1656651), if asked.
- The IRA plan custodian should make the check payable to Hadassah, The Women's Zionist Organization of America, Inc., and mail it to:
P.O. Box 1100
New York, New York 10268-1100
- Please instruct the IRA plan custodian to reference your name and address on the check; otherwise, it may be difficult to identify that you are the donor when the check arrives.
- If the IRA plan custodian makes the check payable to Hadassah but mails the check to you, please mail the check with a cover letter to Hadassah Fundraising, P.O. Box 1100, New York, New York 10268-1100.
Please let us know!
Contact Isha Tendolkar,
at 212-303-8095 or firstname.lastname@example.org
if you have any questions or to let us know that you are making an IRA charitable rollover gift.
The information and content contained herein is intended for educational purposes only and is not intended to provide legal, tax or other professional advice or to be relied upon. We encourage you to consult with your tax advisor or accountant if you are contemplating making an IRA charitable rollover gift.