Individuals who act quickly can receive a tax break for distributions in 2014 from an Individual Retirement Account (IRA) to a qualified charity. For the past four years, a distribution of up to $100,000 from an IRA paid directly to a qualified charity has not been deemed a taxable distribution to the IRA owner. On December 19, President Obama signed legislation that extends this “Qualified Charitable Distribution Rule” for distributions during the 2014 calendar year. The special tax treatment applies to distributions from traditional IRAs, rollover IRAs, Roth IRAs, and inherited IRAs.

A distribution from an IRA to a charity of up to $100,000 during 2014 on or after the date the IRA owner (or, in the case of an inherited IRA, the beneficiary) has attained age 70½ will be excluded from the IRA owner’s 2014 taxable income. The IRA distribution must be paid directly from the IRA trustee to a qualified charity. A distribution paid to the IRA owner (or to the beneficiary of an inherited IRA) and then transferred to the charity will not be eligible for special tax treatment.