Qualified Charitable Distributions (QCD)
A Qualified Charitable Distribution (QCD) allows individuals age 70 ½ or over to exclude up to $100,000 from their gross income, that is paid directly from their IRA (excludes SEP & SIMPLE IRAs unless inactive) to a qualified charity. The benefit is that the amount donated, if meeting all QCD requirements, is federal income tax-free and can count towards your Required Minimum Distribution for the year.
Qualified Charitable Distributions (QCDs) are now permanent, under the Consolidated Appropriations Act of 2016.
To be eligible for the tax free consideration afforded with QCDs:
- You must be age 70 ½ or older at the time the gift is made.
- The QCD has to be withdrawn from your Traditional or Roth IRA. SEP or SIMPLE IRAs may also qualify, but only if inactive (i.e. not receiving contributions).
- The QCD has to be paid directly from your IRA to the qualified charity. (Qualified charities include churches, educational institutions, hospitals and medical research facilities, but not charitable remainder trusts or donor advised funds. Check with your charity of choice for eligibility).
- No more than $100,000 can be applied towards a QCD for each tax year. If you file a joint return, your spouse can also make a QCD of up to $100,000.
- The amount donated can count towards your Required Minimum Distribution from your Traditional IRA.
You can request a QCD by completing the following two forms:
If you have additional questions about Qualified Charitable Donations, give us a call at 1-877-921-2434. We're happy to help. Please consult a licensed tax professional regarding specific IRS rules surrounding Qualified Charitable Distributions and your particular tax situation.
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