Tax Free IRA Donation

If you are age 70 1/2 you now have the option of making donations directly from an IRA under the Pension Protection Act of 2006.  This legislation allows individual donors age 70 1/2 and older to make lifetime gifts to qualified public charities such as AHM, by using funds from IRAs without incurring tax effects traditionally associated with lifetime donations from such accounts.

In order to receive tax free treatment, the following requirements must be met:

  1. The individual must be age 70 1/2 or older
  2. The distribution must be made from a traditional IRA or a Roth IRA
  3. The distribution must be made by the IRA trustee directly to the charity (with no intervening possession or ownership by the IRA owner)
  4. The amount of the distribution does not exceed $100,000 per year

You can make distributions of more than $100,000 in distributions each year, but only the first $100,000 will be tax free.  Additionally, the charitable rollover is included in determining the amount of the individual’s Required Minimum Distribution (RMD).  For example, if an individual’s RMD for 2016 is $50,000, a $50,000 charitable rollover will satisfy the RMD requirement for the year.  The individual would not be required to take out an additional $50,000 to have included in his or her gross income.

This information is being provided to you by the AHM Children’s Trust Fund Endowment Committee, which is part of AHM Youth and Family Services.  To read more about the AHM Children’s Trust Fund, please visit our page.

To make a gift to the AHM Children’s Trust Fund, we recommend that you contact your IRA administrator or Financial Advisor to instructions regarding how best to contribute from your IRA or ROTH IRA, as each administrator has company specific guidelines.  To understand the full implications and benefits of such a gift, we encourage you to contact your Tax or Financial Advisor to discuss your particular situation.  For proper handling, acknowledgment and donor credit, IRA distributions made as a donation AHM Youth and Family Services should be sent to:

AHM Youth and Family Services, Inc.
Attn:  Nella Stelzner, Director of Finance and Operations
25 Pendleton Drive
Hebron, Connecticut 06248

To speak with a member from the AHM Children’s Trust Fund Committee, please call our Director of Fund Development, Joel Rosenberg at 860-228-9488.