IRA MINIMUM REQUIRED DISTRIBUTION DONATIONS

GIVES RETIREE DONORS A TAX BREAK AND HELPS FUND IMPORTANT TRTF PROGRAMS!

Note: In order to get the maximum tax benefit on the donated amount of the minimum required distribution from your IRA, the donated money must be transferred directly from the IRA administrator to the Texas Retired Teachers Foundation.

IRA Minimum Distribution Transfer Donations

If you are age 70½ or older, you are required to distribute funds annually from your Individual Retirement Account (IRA). This mandatory distribution often creates a tax burden, but federal law allows you to make direct, annual transfers of up to $100,000 from an IRA to a charity without treating the distribution as taxable income.

These "charitable transfers" can significantly lower your taxable income, and a direct transfer to the Texas Retired Teachers Foundation (TRTF) from your IRA counts toward your minimum required distribution. This is a unique benefit of taking out an IRA savings plan. To learn more about IRA savings and to discover the differences between ira vs 401k, head to the SoFi website.

An IRA charitable gift can benefit retired educators, who often have paid off their mortgages and don't file itemized returns. The gift may help to neutralize the negative tax consequences of a minimum required distribution.

Please visit the TRTF website to read all details pertaining to IRA charitable transfers and to find a form you may use to make such a transfer to TRTF. You may also contact TRTF for more information at [email protected].

Information About the IRA Charitable Transfer

Congress has permanently extended the opportunity for Americans to make direct transfers from their Individual Retirement Accounts (IRAs) to public charities for 2015 and beyond. While individuals may begin taking distributions from their IRAs as early as age 59½, they are required to begin taking them at age 70½. The mandatory distribution often creates a tax burden, even if the individual donates the money to charity. The IRA charitable transfer provision, established under the Pension Protection Act, allows those at least 70½ to donate up to $100,000 to charitable organizations directly from their IRA, without treating the distribution as taxable income.

• Eligibility Age. Taxpayers age 70½ and older are required to make annual distributions from their IRAs which are then included in the taxpayers’ adjusted gross income (AGI) and subject to taxes. The IRA charitable transfer permits those taxpayers to make donations directly to charitable organizations from their IRAs without counting them as part of their AGI and, consequently, without paying taxes on them. No charitable tax deduction is allowed because these IRA transfers involve assets that have never been taxed.
• Annual Cap. A donor’s total combined charitable IRA contributions cannot exceed $100,000 in any one year.
• Eligible Charities. Charitable contributions from an IRA must go directly to a public charity that is not a supporting organization. Contributions to donor-advised funds and private foundations, except in narrow circumstances, do not qualify for tax-free IRA contributions. Transfers to charitable gift annuities or charitable remainder trusts do not qualify either because the donor receives a benefit. The Texas Retired Teachers Foundation is considered to be an eligible charity.
• Eligible Retirement Accounts. Distributions can only be made from traditional Individual Retirement Accounts or Roth IRAs. Charitable donations from 403(b) plans, 401(k) plans, pension plans, and other retirement plans are ineligible for the tax-free treatment.
• Directly to the Charity. Distributions must be made directly from the IRA trustee payable to the public charity.
• No Gifts in Return. Donors cannot receive any goods or services in return for charitable IRA transfer contributions in order to qualify for tax-free treatment. The gift cannot be used to pay memberships or to retain or obtain preferred seating for athletic events.
• Written Receipt. In order to benefit from the tax-free treatment, donors must obtain written substantiation of each IRA transfer from each recipient charity. The Texas Retired Teachers Foundation will provide a receipt.

IRA Charitable Transfer Instructions

The Texas Retired Teachers Foundation (TRTF) appreciates your IRA transfer gift and wants to ensure proper handling and acknowledgment.

Please notify the TRTF Office at 512.476.1622 or [email protected] and provide:

• Donor’s name, address, phone number, and email address
• IRA administrator – company and contact
• Expected date and amount of IRA distribution/gift
• Gift Designation(s) – name of department, endowment, or program, etc.

Please share the following instructions with your IRA plan administrator:

As with any decision involving your assets, the Foundation urges you to seek the advice of professional counsel when considering a gift to the Texas Retired Teachers Foundation.

SAMPLE REQUEST FROM PLAN OWNER TO ADMINISTRATOR FOR CHARITABLE DISTRIBUTION FROM IRA.