The Emergency Economic Stabilization Act signed by President George W. Bush extends a popular option for seniors: the ability to make contributions to charities from their Individual Retirement Accounts.
The law affects contributions made during 2008 and 2009. Individuals who are 70 ½ years and older can make up to $100,000 per year in contributions from their IRAs to qualified charities. The distribution counts as part of the required distribution from IRA accounts.
This option was also available in 2006 and 2007 as part of the Pension Protection Act of 2006, and renewed as part of the stabilization act.
"Typically, when money is withdrawn from an IRA, it is taxed as income,” explained Mike Waiz, president and CEO of the Community Foundation of Southern Indiana. “This law allows people to take up to $100,000 out of their IRA in 2008 and another $100,000 in 2009 and donate it to charity without incurring any income tax. It’s a great way to make a contribution to their favorite charitable organization.”