Date: January 9th, 2013

IRA Charitable Rollover Extended

January 9, 2013

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IRA Charitable Rollover Extended

The Pension Protection Act of 2006 (PPA) permitted individuals to roll over up to $100,000 from an individual retirement account (IRA) directly to a qualifying charity without recognizing the assets transferred to the qualifying charity as income. On January 2, 2013, President Obama signed the American Taxpayer Relief Act of 2012 (H.R. 8) into law, extending the provision until December 31, 2013.

What is an IRA charitable rollover? The law uses the term “qualified charitable distribution” to describe an IRA charitable rollover. A qualified charitable distribution is money that individuals who are 70½ or older may direct from their traditional IRA to eligible charitable organizations. The provision has a cap of $100,000 for charitable distributions from individual IRAs each year. Individuals may exclude the amount distributed directly to an eligible charity from their gross income.

What is the new expiration date of this provision? This provision is still time-limited. It applies only to qualified charitable distributions made before January 1, 2014.

Can donors still take advantage of the IRA charitable rollover for 2012? Although the most recent extension was enacted on January 2, 2013, it was retroactive, dating back to January 1, 2012.

The extension allows individuals who received an IRA distribution in December 2012 to elect to count that distribution (or a portion thereof) as a 2012 IRA charitable rollover if the individual transfers the amount in cash before February 1, 2013, to an eligible charity.

Additionally, the extension allows donors to make distributions directly to eligible charities before February 1, 2013, and elect to have such distributions treated as qualified charitable distributions in 2012. Recognizing that the extension of the IRA charitable rollover provision occurred in 2013, this change may be a particular benefit to donors who would like to take advantage of the rollover in both 2012 and 2013.

Does a donor also receive a charitable deduction when they roll over assets to a charity under this provision? No. Under this provision, donors benefit by not having to recognize the amount contributed directly from their IRA to a qualifying charity. However, because donors exclude this contribution from their gross income, they cannot take a charitable contribution deduction for the contribution; to do so would result in a double benefit for donors and that is explicitly prohibited.

How do individuals make a qualified charitable distribution?

Individuals must instruct their IRA trustee to make the contribution directly to an eligible charitable organization.

Feel free to contact the Community Foundation if you have questions about the extension of the IRA Charitable Rollover. 


We make every effort to ensure accuracy of this document. The information is not a substitute for expert legal, tax, or other professional advice, and we strongly encourage donors to work with counsel to determine the impact of this legislation on their particular situations. This information may not be relied upon for the purposes of avoiding any penalties that may be imposed under the Internal Revenue Code.