The American Taxpayer Relief Act of 2012 extends the IRA Charitable Rollover through December 31, 2013 to allow individuals 70 ½ and older to transfer up to $100,000 from a traditional individual retirement account (IRA) directly to eligible charities. The taxpayer excludes the distributed amount from gross income, rather than take a charitable deduction. (The law does not apply to gifts made to charitable trusts, donor advised funds and supporting organizations.)
The Act, passed on January 2, 2013, applies retroactively to 2012. Two time-sensitive transition rules provide:
- A taxpayer may elect to make a distribution directly to a charity in January 2013 and have it deemed to have been made on December 31, 2012; or
- If an individual took a distribution from his or her IRA in December 2012, the taxpayer can transfer up to $100,000 to a qualified charity by February 1, 2013 and treat it as a direct distribution to a charity in 2012. (This is also referred to as using the IRA Charitable Rollover provision in lieu of the Required Minimum Distribution (RDM) taxpayers face on turning 70 ½.)
