Qualified Charitable Distributions (QCDs)
A Qualified Charitable Distributions (QCDs) is a withdrawal from an Individual Retirement Account (IRA) sent directly to an organization such as CCA. In other words, the funds don’t pass through your hands. You instruct your IRA custodian to send the funds straight to CCA. It’s a great way to make an impactful gift and may also have positive tax benefits!
- You are eligible if you are 70 1⁄2 or older (at the time of the donation).
- While reducing your taxes, you can support CCA! Once you reach 70 1⁄2, you must withdraw funds annually from your IRA and report the distributions as income on your tax returns. So, if you’re required to withdraw $10,000 from your IRA, that may increase your income this year by $10,000. Lowering your taxable income may reduce the impact on certain tax credits and deductions, including Social Security and Medicare. It’s important to weigh these options with your financial advisor.
- You can transfer as much as $100,000 a year from your IRA to any combination of qualified charities, and none of that money would be taxed. And the limit is $100,000 a year per person – not per IRA.
- For a QCD to count towards your current year’s Required Minimum Distributions (RMD), the funds must come out of your IRA by your RMD deadline, generally Dec. 31. Recommendations are to reach out to your IRA adviser and financial advisor now.
- You can learn more about QCDs on the IRS website.