IRA Charitable Rollover
Congress renewed legislation that allows you to make a tax-free gift from your individual retirement account (IRA). Known as the IRA Charitable Rollover, this law no longer has an expiration date so you are free to make annual gifts to Northwestern from your IRA this year and well into the future.
Individuals 70½ and older may transfer up to $100,000 per person ($200,000 per couple) per year from their IRAs directly to qualified charitable organizations without being subject to income taxes on the distribution. This gift may also count toward your required minimum distribution.
Here Are the Details:
- You are age 70½ or older at the time of the gift.
- You can transfer up to $100,000 directly from your IRA to Northwestern University (Tax ID number: 36-2167817). This opportunity applies only to traditional IRAs and not other types of retirement plans.
- You transfer the funds outright to one or more qualified charities. The legislation does not permit direct transfers to charitable trusts, donor advised funds, charitable gift annuities, or supporting organizations.
We have prepared two forms that you can use to communicate your wishes to your IRA administrator and ensure proper receipting of your gift by the University. Your gift can be allocated to a specific school or program. Please download these forms using the links below:
- To Notify Northwestern of Your Charitable Distribution Directly from Your IRA
- To Request that Your IRA Administrator Make a Charitable Distribution from an IRA
Frequently Asked Questions
Q. I’ve already named Northwestern as the beneficiary of my IRA. What are the benefits if I make a gift now instead of after my lifetime?
A. By making a gift this year from your IRA of up to $100,000 from your IRA, you can see your philanthropic dollars at work. You are jump-starting the legacy you would like to leave and giving yourself the joy of watching your philanthropy take shape. Moreover, you can fulfill any outstanding pledge you may have already made by transferring that amount from your IRA under this legislation as long as it is $100,000 or less for the year.
Q. I’m turning age 70½ in a few months. Can I make this gift now?
A. No. The legislation requires you to reach age 70½ by the date you make the gift.
Q. I have several retirement accounts—some are pensions and some are IRAs. Does it matter which retirement account I use?
A. Yes. Direct rollovers to a qualified charity can only be made from an IRA. Under certain circumstances, however, you may be able to roll assets from a pension, profit sharing, 401(k) or 403(b) plan into an IRA and then make the transfer from the IRA directly to Northwestern. To determine if a rollover to an IRA is available for your plan, speak with your plan administrator.
Q. Can my gift be used as my minimum required distribution under the law?
A. Yes. If you have not yet taken your required minimum distribution, the rollover gift can satisfy all or part of that requirement. Contact your IRA custodian to complete the gift.
Q. Do I need to give my entire IRA to be eligible for the tax benefits?
A. No. You can give any amount under this provision, as long as it is $100,000 or less this year. If your IRA is valued at more than $100,000, you can transfer a portion of it to fund a charitable gift.
Q. I have two charities I want to support. Can I give $100,000 from my IRA to each?
A. No. Under the law, you can give a maximum of $100,000. For example, you can give each organization $50,000 this year or any other combination that totals $100,000 or less. Any amount of more than $100,000 in one year must be reported as taxable income.
Q. My spouse and I would like to give more than $100,000. How can we do that?
A. If you have a spouse (as defined by the IRS) who is 70½ or older and has an IRA, he or she can also give up to $100,000 from his or her IRA in addition to your gift of up to $100,000.
It is wise to consult with your tax professionals if you are contemplating a charitable gift under the extended law. Please feel free to contact Northwestern Gift Planning at 800-826-6709 or email@example.com with any questions you may have.
The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes include federal taxes only. State income/estate taxes or state law may impact your results. Annuities are subject to regulation by the State of California. Payments under such agreements, however, are not protected or otherwise guaranteed by any government agency or the California Life and Health Insurance Guarantee Association. A charitable gift annuity is not regulated by the Oklahoma Insurance Department and is not protected by a guaranty association affiliated with the Oklahoma Insurance Department. Charitable gift annuities are not regulated by and are not under the jurisdiction of the South Dakota Division of Insurance.