Legislation supporting increased charitable giving among seniors approved by key House Committee

American Heart Association

Critical legislation that would support the nation’s nonprofit community by encouraging charitable giving among seniors was approved today by the House Ways and Means Committee as part of a broader retirement package, the Securing a Strong Retirement Act. Included in the package is the Legacy IRA Act, a bipartisan bill that would support the vital work of charitable organizations nationwide by expanding the IRA Charitable Rollover.

The version of the Legacy IRA Act included in today’s comprehensive retirement package would encourage middle-income seniors, starting at age 70 ½, to make tax-free IRA rollovers to charities through life-income plans (charitable gift annuities or charitable remainder trusts) as a one-time qualified charitable distribution up to $50,000. Distributions from the charitable annuity to the donor would be taxed, just as distributions from a traditional IRA. This change to the law would allow seniors to fulfill their IRA’s required minimum distribution while supporting the charity of their choice and receiving retirement income. The legislation also brings the original IRA Charitable Rollover up to date by indexing for inflation the qualified distribution limit for annual outright gifts, so distributions for charitable purposes can keep pace with inflation.

Suzie Upton, Chief Operating Officer for the American Heart Association, issued the following statement about the bill:

“The Legacy IRA Act is a win-win, both for seniors who want to support philanthropic causes and for charitable organizations that benefit from individual philanthropy. By building on the IRA Charitable Rollover, which has generated millions of dollars in new or increased contributions to local and national charities, this bill would allow more seniors to benefit from the rollover and make tax-free charitable contributions.

“According to Johns Hopkins’ Center for Civil Society Studies, the nonprofit sector was down by nearly 1 million nonprofit jobs as of January, and it will take nearly two years to return to our pre-COVID level of employment. The legislation would encourage much needed charitable giving to organizations like ours, enabling seniors to participate in the rich American tradition of philanthropy while continuing to draw needed income from their investments. For these reasons, this bipartisan legislation has the resounding support of 50 diverse mission-driven organizations nationwide.

“We support swift passage of the Legacy IRA Act as part of the Securing a Strong Retirement Act.”

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