The Expiration of the Charitable IRA Rollover

The Expiration of the Charitable IRA Rollover


As we near the final months of 2013, many deadlines come to mind.  One technique set to expire at year-end is the Qualified Charitable Distribution (QCD) or, as many know it, the Charitable IRA Rollover.  The scheduled expiration is not new to those familiar with the income tax landscape as this provision has been scheduled to expire in the past only to be renewed by Congress.  Nevertheless, an expiration date still exists as of this writing.

A QCD is a method of donating from an IRA directly to a charity that often provides income tax benefits to the IRA owner – above and beyond a simple itemized tax deduction.  When executed correctly, the IRA distribution (i.e., donation) is not counted as taxable income on one’s tax return.  Consequently, the donation is not claimed as a charitable contribution on Schedule A of the federal tax return.  Finally, a QCD can be used to satisfy the taxpayer’s Required Minimum Distribution (RMD).

A multitude of benefits are possible depending on one’s particular situation. A couple examples follow:


  • Charitable donations may reduce one’s taxable income via a QCD even if he/she doesn’t typically itemize on Schedule A.
  • The QCD may reduce one’s Adjusted Gross Income (AGI) which could, among other things, reduce the amount of Social Security benefits subject to federal income tax.

As with any tax strategy, it’s very important to work with a knowledgeable team to verify eligibility and to ensure the ultimate desired outcome is achieved.  For example, the taxpayer must have already reached age 70 ½ (what a funny age?) prior to implementing a QCD and the maximum annual amount eligible for a QCD is $100,000 per individual.

Posted: November 21, 2013

Authored by: Terry Prather, CFP®, ChFC®

Direct Phone: 812-602-6307


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The information in this material is only as current as the date indicated, and may be superseded by subsequent market events or for other reasons. While all information prepared in this document is believed to be accurate, any statements of opinion constitute only current opinions of Payne Wealth Partners, Inc., which are subject to change and which Payne Wealth Partners, Inc. does not undertake to update. Accordingly, you should not put undue reliance on these statements. The information does not attempt to examine all the facts and circumstances that may be relevant to an individual’s financial needs. Payne Wealth Partners, Inc. is not soliciting any action based on these statements.

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