IRA Charitable Rollover Facilitation and Enhancement Act of 2025
- Bill Number
- H.R. 2891
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2025-04-10: Referred to the House Committee on Ways and Means.
- Last Updated
- 2026-06-05T08:07:46Z
AI-Generated Summary
Purpose
The IRA Charitable Rollover Facilitation and Enhancement Act of 2025 aims to expand options for tax-free charitable donations by removing restrictions on direct transfers from individual retirement accounts (IRAs) to donor-advised funds. Donor-advised funds are charitable giving vehicles where donors contribute money or assets to a fund managed by a sponsoring organization, and they can recommend grants to qualified charities over time.
Key Provisions
- Amendment to the Internal Revenue Code: Modifies Section 408(d)(8)(B)(i) by removing the phrase "or any fund or account described in section 4966(d)(2)", which previously excluded donor-advised funds from qualifying for IRA charitable rollover treatment.
- Effective Date: Applies to distributions made after the date the Act is enacted into law.
Significant Changes to Existing Law
- Under current law, individuals aged 70½ or older can make qualified charitable distributions (QCDs) directly from their IRAs to eligible charities, excluding the amount from taxable income (up to $100,000 annually). However, these rollovers were prohibited to donor-advised funds.
- This bill eliminates that prohibition, allowing IRA owners to roll over funds directly to donor-advised funds without it counting as taxable income, treating them similarly to direct gifts to public charities.
Potential Impacts
- On Citizens: Enables older IRA holders to more flexibly support charities through donor-advised funds, potentially simplifying estate planning and increasing tax-advantaged giving without affecting required minimum distributions (RMDs) or adjusted gross income.
- On Government Agencies: The Internal Revenue Service (IRS) may see administrative changes in processing these rollovers but no major new burdens, as the core QCD rules remain intact. Could indirectly boost federal tax revenues through encouraged charitable activity rather than taxable withdrawals.
- On International Relations: No direct impacts, as the bill focuses on domestic tax policy for U.S. taxpayers and charities.
Main Stakeholders Affected
- IRA Account Holders: Primarily individuals aged 70½ and older who use IRAs for retirement savings and wish to make charitable contributions.
- Donor-Advised Funds and Sponsoring Organizations: Such as community foundations or financial institutions (e.g., Fidelity Charitable, Schwab Charitable), which will gain access to a new stream of tax-free contributions.
- Qualified Charities: Indirectly benefit from increased grants recommended through donor-advised funds.
- Internal Revenue Service (IRS): Responsible for enforcing the updated tax rules on QCDs.
Notable Legal, Constitutional, or Political Implications
- Legal: Streamlines tax code provisions under the Internal Revenue Code, promoting consistency in charitable deduction rules without altering the overall framework for QCDs. No challenges to constitutionality anticipated, as it involves routine congressional authority over taxation.
- Constitutional: Aligns with Congress's power to lay and collect taxes (Article I, Section 8), encouraging philanthropy through incentives rather than mandates.
- Political: Bipartisan support evident from cosponsors across party lines; could appeal to policymakers favoring expanded charitable giving amid discussions on tax reform and retirement security, potentially influencing future budget or tax legislation.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (40)
Rep. Panetta, Jimmy [D-CA-19], Rep. Buchanan, Vern [R-FL-16], Rep. Kelly, Mike [R-PA-16], Rep. Sewell, Terri A. [D-AL-7], Rep. Suozzi, Thomas R. [D-NY-3], Rep. Beyer, Donald S. [D-VA-8], Rep. Thompson, Mike [D-CA-4], Rep. Moran, Nathaniel [R-TX-1], Rep. Hern, Kevin [R-OK-1], Rep. Tenney, Claudia [R-NY-24], Rep. Carey, Mike [R-OH-15], Rep. Sánchez, Linda T. [D-CA-38], Rep. Murphy, Gregory F. [R-NC-3], Rep. Malliotakis, Nicole [R-NY-11], Rep. Chu, Judy [D-CA-28], Rep. Kustoff, David [R-TN-8], Rep. Schmidt, Derek [R-KS-2], Rep. Doggett, Lloyd [D-TX-37], Rep. Mann, Tracey [R-KS-1], Rep. Schneider, Bradley Scott [D-IL-10], Rep. Vindman, Eugene Simon [D-VA-7], Rep. Boyle, Brendan F. [D-PA-2], Rep. Moore, Blake D. [R-UT-1], Rep. Davis, Danny K. [D-IL-7], Rep. Yakym, Rudy [R-IN-2], Rep. Flood, Mike [R-NE-1], Rep. Evans, Dwight [D-PA-3], Rep. Horsford, Steven [D-NV-4], Rep. Houlahan, Chrissy [D-PA-6], Rep. Fitzpatrick, Brian K. [R-PA-1], Rep. Johnson, Dusty [R-SD-At Large], Rep. Bacon, Don [R-NE-2], Rep. Fischbach, Michelle [R-MN-7], Rep. Miller, Max L. [R-OH-7], Rep. Franklin, Scott [R-FL-18], Rep. Amo, Gabe [D-RI-1], Rep. Mrvan, Frank J. [D-IN-1], Rep. DelBene, Suzan K. [D-WA-1], Rep. Feenstra, Randy [R-IA-4], Rep. Miller, Carol D. [R-WV-1]
Recent Actions
- 2025-04-10: Referred to the House Committee on Ways and Means.
- 2025-04-10: Introduced in House
- 2025-04-10: Introduced in House
Bill Versions
- IRA Charitable Rollover Facilitation and Enhancement Act of 2025 — issued 2025-04-10 — PDF (2 pages)