Guidance Date: 3/22/2023
Filing Guidance for Charitable Gift Annuity Forms Funded with IRA Distributions.

The Federal Secure 2.0 Act expanded the definition of Qualified Charitable Distribution under the Internal Revenue Code to include one-time distributions from an Individual Retirement Account (IRA) to create life income plans, including charitable gift annuities.

The Department has received questions from charitable annuity societies (charities) about filing new charitable gift annuity contract forms to be used in this context.  The Department provides the following guidance to help expedite such filings for charities that wish to accept IRA distributions to fund charitable gift annuities.

1. How to File

Charities should make the filings electronically via email.  The subject line of the email should read “Charitable Gift Annuity Filing”.  If a charity is unable to make the filling electronically, they may contact the individual identified below for a mailing address.

2. Preparation of Forms

Charities should file new contract forms solely for use when the gift annuity is funded with an IRA distribution.  See section III.A.3 of the Charitable Gift Annuities Product Outline on the Department’s website (Outline).

The new forms will need unique form numbers in the lower left-hand corner of the form to distinguish them from the charity’s other filed forms.  See section III.B.1 of the Outline.  For example, charities could add “IRA” to the form number (“1L-I-IRA” for a one-life immediate payment annuity funded with an IRA distribution).

The summary description or caption discussed in section III.C.1 of the Outline should, for these new forms, identify that the contract is funded with an IRA distribution.  For example, the caption could read “One Life – Immediate Payments – Donor is Annuitant – Funded with IRA”.

3. Non-Assignable

One of the conditions set by the Secure 2.0 Act is that a charitable gift annuity funded with a qualified charitable distribution from an IRA must be non-assignable. Currently, most charitable gift annuity contract forms used in NY contain a standard provision indicating that the contract is “non-assignable, except that it can be assigned to the issuing organization”.  In light of the limitation in the Secure 2.0 Act, the phrase “except that it can be assigned to the issuing organization” should not be included in the new contract forms filed for use with an IRA distribution.

4. Description of Gift

The contracts should include a place for a description of the gift and the description should indicate that the source of the gift is a distribution from an IRA.  This can be accomplished with variable material in the body of the contract or in an attached schedule, as discussed in detail in section III.C.8. of the Outline.

5. Immediate Annuities

The Secure 2.0 Act excludes deferred annuities from the eligible income plans for the qualified charitable distribution.  Accordingly, only immediate annuities should be filed for this purpose.

Questions regarding this guidance should be directed to Senior Attorney, Jeff Sandak.