--- title: IRA to Charity Rollover- Can You Save on an IRA Payment Made Directly to Charity? description: IRA to Charity Rollover- Can You Save on an IRA Payment Made Directly to Charity? --- [![Sweeney Conrad](https://blog.sweeneyconrad.com/hs-fs/hubfs/raw_assets/public/SweeneyConrad_August2022/images/Sweeney-Conrad-logo.jpg?width=542&height=166&name=Sweeney-Conrad-logo.jpg "Sweeney Conrad")](https://www.sweeneyconrad.com/preview/) ![navigation menu](https://blog.sweeneyconrad.com/hubfs/raw_assets/public/SweeneyConrad_August2022/images/hamburger-bars.png) - [What We Do](https://www.sweeneyconrad.com/what-we-do) - [Tax Services](https://www.sweeneyconrad.com/what-we-do/tax-services) - [Client Accounting Services](https://www.sweeneyconrad.com/what-we-do/client-accounting-services) - [Advisory Services](https://www.sweeneyconrad.com/what-we-do/advisory-services) - [How We Do It](https://www.sweeneyconrad.com/how-we-do-it) - [Our Process](https://www.sweeneyconrad.com/how-we-do-it/our-process) - 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By Emily Taibl | Mar 20, 2017 [![white arrow](https://blog.sweeneyconrad.com/hubfs/raw_assets/public/SweeneyConrad_August2022/images/arrow-left-white.png)](https://blog.sweeneyconrad.com) INSIGHTS/BLOG By Duke Eide It is possible under some circumstances to roll money from your IRA to a charity.  Under legislation enacted in 2006, taxpayers aged 70 ½ or older may direct a qualified charitable distribution (QCD) to a qualified charity from an IRA without income recognition.  The income exclusion for a QCD may not exceed $100,000 for any tax year (and for married individuals filing a joint return, it is $100,000 per individual so you can do up to $200,000).  A QCD must be made directly by the IRA trustee to the charitable organization. **IRA-to-charity provision made permanent.** 1. In the December 2015 PATH Act, the IRA- to-charity provision was reinstated retroactively for charitable transfers during 2015, and made a permanent provision in the tax law \[fusion\_builder\_container hundred\_percent="yes" overflow="visible"\]\[fusion\_builder\_row\]\[fusion\_builder\_column type="1\_1" background\_position="left top" background\_color="" border\_size="" border\_color="" border\_style="solid" spacing="yes" background\_image="" background\_repeat="no-repeat" padding="" margin\_top="0px" margin\_bottom="0px" class="" id="" animation\_type="" animation\_speed="0.3" animation\_direction="left" hide\_on\_mobile="no" center\_content="no" min\_height="none"\]\[Sec. 408(d), as amended by 2015 PATH Act Sec. 11(a)DivQ}. 2. As a result, taxpayers who have attained age 70 ½ may exclude from gross income up to $100,000 of qualified charitable distributions from IRAs to charity, both for 2015 and each year thereafter. **This means tax savings for you.** Because an IRA-to-charity transfer is in lieu of required minimum distribution (RMD) income, this strategy reduces the taxpayer’s AGI.  There are numerous phase-outs and phase-ins based on the taxpayer’s AGI as well as other circumstances where the IRA-to-charity transfer produce tax savings: The following table illustrates the tax savings that occur in specific situations from the IRA-to-charity transfer strategy: | Taxpayer Situation | AGI before QCD | IRA-to-Charity | Tax Savings | % | Explanation | | --- | --- | --- | --- | --- | --- | | High income: No 3.8% NIIT but in AMT; deduction phase-outs (itemized & ex.) | $350,000 | $30,000 | -0- | 0% | AMT reverses phase-out of itemized and exemptions | | High income: No 3.8% NIIT and no AMT deduction phase-outs | $350,000 | $30,000 | $938 | 3% | Savings from reduced phase-out of itemized deductions and exemptions | | High income: 3.8% NIIT and in AMT; deduction phase-outs | $350,000 | $30,000 | $1,140 | 4% | Saves 3.8% NIIT due to AGI reduction\* | | High income: 3.8% NIIT; no AMT; deduction phase-outs | $350,000 | $30,000 | $2,078 | 7% | Saves 3.8% NIIT\* and 3% from reduced phase-outs | | Middle income: Rental Loss phase-out | $120,000 | $10,000 | $1,250 | 13% | $4,250 decrease in taxable Soc. Sec. (85% phase-in) x 15% rate | | Lower income: Taxable Soc. Sec. (gross $40K); std. ded.; joint | $68,850 | $5,000 | $637 | 13% | $4,250 decrease in taxable Soc. Cec. (85% phase-in) x 15% rate | | Lower income: Taxable Soc. Sec. (gross $30K); std. ded.; single | $68,850 | $5,000 | $1,387 | 28% | Taxable income drops $9,250 ($5,000 less RMD and $4,250 less taxable Soc. Sec.) | | Lower income: Taxable Soc. Sec. (gross $30K); std. ded.; single | $53,100 | $5,000 | $1,742 | 35% | Taxable income drops $9,250 ($5,000 less RMD and $4,250 less taxable Soc. Sec.) | | \*Savings in 3.8% NIIT assumes the lesser amount subject to the tax is excess AGI above $200,000/$250,000 threshold rather than actual NII. | | | | | | Questions?  Contact Duke Eide, Shareholder at [deide@sweeneyconrad.com](mailto:deide@sweeneyconrad.com) or [425.629.1990](tel:(425)%20629-1990).\[/fusion\_builder\_column\]\[/fusion\_builder\_row\]\[/fusion\_builder\_container\] ### RECENT POSTS ### POSTS BY TAG - [Tax (122)](https://blog.sweeneyconrad.com/tag/tax) - [Audit & Assurance (74)](https://blog.sweeneyconrad.com/tag/audit-and-assurance) - [Estate Planning (60)](https://blog.sweeneyconrad.com/tag/estate-planning) - [News (30)](https://blog.sweeneyconrad.com/tag/news) - [COVID-19 (26)](https://blog.sweeneyconrad.com/tag/covid-19) - [Sweeney Conrad News (21)](https://blog.sweeneyconrad.com/tag/sweeney-conrad-news) - [Retirement Reporter (17)](https://blog.sweeneyconrad.com/tag/retirement-reporter) - [Sweeney Conrad Passion (16)](https://blog.sweeneyconrad.com/tag/sweeney-conrad-passion) - 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