The 2010 Relief Act – IRA Charitable Rollover

On December 17, 2010, President Obama signed into law the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (the 2010 Relief Act). One of the individual tax relief provisions deals with extending an expiring provision related to distributions from individual retirement plans for charitable purposes. Prior to the 2010 Relief Act, the rules regarding IRA charitable rollovers was governed by provisions in the Pension Protection Act of 2006 that were in effect until December 31, 2009. As summarized in a previous post, “New Nonprofit Law – IRA Charitable Rollover,” the Pension Protection Act of 2006 allowed taxpayers 70½ years of age and older to make tax-free "qualified charitable distributions" of up to $100,000 annually from their IRAs (including Roth IRAs).

The 2010 Relief Act now extends this exclusion again for qualified charitable distributions through 2011. It applies retroactively to distributions made in taxable years beginning after December 31, 2009 and will apply to distributions made before January 1, 2012. The provision also contains a special rule that allows taxpayers to elect to report any qualified charitable distribution made after December 31, 2010, and before February 1, 2011 as though it was made on December 31, 2010 (i.e., count towards the 2010 taxable year).

Tony Martignetti provides a useful summary on the IRA Charitable Rollover of the 2010 Relief Act and commentary in his blog articles, “Fact & Commentary: Charitable IRA Rollover Extended” – Parts I and II.

The Joint Committee on Taxation’s technical explanation of the revenue provisions contained in the “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010,” is available for download here.

For more coverage on the 2010 Relief Act, please visit the Partnership for Philanthropic Planning legislative bulletin.