Beginning in 2006, the IRS permitted taxpayers who had attained age 70½ to make “IRA Charitable Rollovers” or Qualified Charitable Distributions (QCDs) directly to eligible charities (including colleges and universities) of up to $100,000 in total annually.  This legislation expired at the end of 2011.However, the American Taxpayer Relief Act of 2012 (ATRA) has reinstated this legislation with a two-year extension that is retroactive back to January 1, 2012, and is set to expire again on December 31, 2013.

Under ATRA 2012, taxpayers who took RMDs during the month of December 2012 were able to elect to make charitable gifts of these distributions in January 2013.  The charitable gifts will be treated as having occurred in December 2012, and the taxpayers will not need to report the RMDs as income for 2012.

In addition, for those taxpayers who had gone ahead and made QCDs directly from their IRA custodians to charities during 2012 (hoping that there would be new retroactive legislation), the IRS has indicated that these rollovers will be treated as QCDs retroactive to January 1, 2012, and will not need to be reported as income for 2012.

Finally, taxpayers who did not make QCDs during 2012 were given an opportunity to do so during January 2013 and to have the QCDs (up to $100,000) treated as 2012 charitable rollovers, not reportable as income for 2012 or 2013.  These taxpayers were also eligible to make QCDs during the remaining 11 months of 2013 of up to another $100,000 that will be considered QCDs for 2013 and will not need to be reported as income in 2013.

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