Bill Summary
The "IRA Charitable Rollover Facilitation and Enhancement Act of 2026" is a proposed legislation that aims to amend the Internal Revenue Code of 1986. Specifically, it seeks to remove the existing restriction that prohibits individuals from making charitable rollovers from their Individual Retirement Accounts (IRAs) to donor advised funds. This change will allow individuals to directly transfer funds from their IRAs to these charitable accounts, potentially enhancing their ability to support charitable causes while also benefiting from tax advantages. The amendment will take effect for distributions made after the law is enacted.
Possible Impacts
Here are three examples of how the IRA Charitable Rollover Facilitation and Enhancement Act of 2026 could affect people:
1. **Increased Charitable Contributions**: Individuals over the age of 70½ who have traditional IRAs may be more likely to contribute to donor advised funds (DAFs) without incurring tax penalties. This could lead to an increase in charitable giving, as these individuals may prefer to support specific causes or organizations while still benefiting from tax advantages associated with IRA rollovers.
2. **Flexibility in Philanthropic Planning**: The ability to roll over funds from individual retirement accounts to donor advised funds provides greater flexibility for retirees in their philanthropic planning. Donors can contribute a larger amount to a DAF, allowing them to take their time in deciding how to distribute those funds to various charities, potentially leading to more strategic and impactful giving over time.
3. **Tax Benefits for Retirees**: By allowing direct rollovers from IRAs to DAFs, retirees can avoid recognizing the rollover amount as taxable income, effectively reducing their overall tax burden. This could incentivize more retirees to allocate a portion of their retirement savings to charitable causes, promoting a culture of giving while allowing them to maintain financial stability in their retirement years.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 3975 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
2d Session
S. 3975
To amend the Internal Revenue Code of 1986 to allow charitable
rollovers from individual retirement accounts to donor advised funds.
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IN THE SENATE OF THE UNITED STATES
March 3, 2026
Mr. Young (for himself, Mr. Bennet, Mr. Lankford, Ms. Cortez Masto, and
Ms. Cantwell) introduced the following bill; which was read twice and
referred to the Committee on Finance
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A BILL
To amend the Internal Revenue Code of 1986 to allow charitable
rollovers from individual retirement accounts to donor advised funds.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``IRA Charitable Rollover Facilitation
and Enhancement Act of 2026''.
SEC. 2. REPEAL OF RESTRICTION ON CHARITABLE ROLLOVERS FROM INDIVIDUAL
RETIREMENT ACCOUNTS TO DONOR ADVISED FUNDS.
(a) In General.--Section 408(d)(8)(B)(i) of the Internal Revenue
Code of 1986 is amended by striking ``or any fund or account described
in section 4966(d)(2)''.
(b) Effective Date.--The amendment made by this section shall apply
to distributions after the date of the enactment of this Act.
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