IRA Charitable Rollovers and Ohio Status
IRA owners who are over age 70½ are required to take a minimum distribution each year. In nearly all cases, this distribution from a traditional IRA produces ordinary income for the recipient. A “qualified charitable distribution” (QCD) is now permitted for transfers from the IRA custodian directly to a qualified charity. IRA owners over age 70½ may transfer up to $100,000 per year. Transfers to supporting organizations or donor advised funds are not permissible. The QCD may be used to fulfill the required minimum distribution for the year of the transfer. Because the QCD is not included in the taxable income, there is no reported charitable deduction. However, transferring the QCD amount directly to charity rather than taking a distribution and writing a check to charity results in a lower adjusted gross income. This may save both ordinary tax and alternative minimum tax.
Status of Charitable Rollover Tax Exemption in Ohio
Conforming legislation to permanently incorporate into Ohio’s statutes the IRA Rollover legislation that passed the U.S. Congress in late December has been approved by the Ohio House and confirmed by the Senate. It now awaits the Governor’s signature. Special thanks to the Ohio Society of CPAs, Ohio State Bar Association, and Ohio Jewish Communities Executive Director Howie Beigelman for his testimony in support of this legislation, which is crucial to the nonprofit sector’s ability to serve those who seek help.