US House acts to permanently extend IRA charitable rollover

On July 17, the US House of Representatives voted 227-130 to pass legislation that would permanently extend the Individual Retirement Account (IRA) rollover provision that expired at the end of 2013. The provision allows individual taxpayers older than 70 ½ years to donate up to $100,000 from their IRAs and Roth IRAs to universities and other nonprofits without having to treat the withdrawals as taxable income. Extension of the IRA rollover provision was one of five measures rolled into the America Gives More Act of 2014 (HR 4719).The five proposals were cleared as separate bills by the House Ways and Means Committee on May 29.

Together, the five bills cost $16 billion over 10 years, and as Ways and Means Chairman Dave Camp has moved these various permanent extenders, Democrats have objected to the fact that the cost has not been “off-set”, meaning paid for from identified funding sources, typically program cuts. Most bills are required under House majority rules to provide an offset before consideration on the floor. A corresponding proposal in the US Senate Finance Committee also does not include an offset, but since the Senate proposal provides for a two-year, not permanent, extension, the cost of the Senate bill is much less than the house various version. The expectation is that Congress will act during the lame-duck session after the November mid-term elections to approve an extender bill that closely tracks with the US Senate Finance Committee proposal. Senator Ron Wyden of Oregon chairs the Senate Finance Committee.

Oregon members voting to permanently extend the IRA rollover provision were Congressmen Peter DeFazio (D-OR4) and Congressman Greg Walden (R-OR2). Congressman DeFazio was one of 56 Democrats who voted for the extension.

The typical pattern for the past decade is that the IRA charitable roll over is extended for two years, not permanently, and that the extension typically occurs as part of a November tax package. This action creates the possibility of a permanent extension instead of a temporary extension.