Qualified Charitable Distributions (QCD)
A QCD is a direct transfer of funds from your IRA custodian, payable to a qualified charity like We Care For America. QCDs can be counted toward satisfying your required minimum distribution for the year as long as certain rules are met. In addition to the benefits of giving to a charity (We Care For America), a QCD excludes the amount donated from taxable income, which is unlike regular withdrawals from an IRA. Keeping your taxable income lower may reduce the impact to certain tax credits and deductions, including Social Security and Medicare.
- You must be 70 ½ or older to be eligible to make a QCD
- The maximum annual amount that can qualify for a QCD is $100,000. This applies to the sum of QCDs made to one or more charities in a calendar year. (If you file taxes jointly, your spouse can also make a QCD from his or her own IRA within the same tax year for up to $100,000.)
- For a QCD to count towards your current year’s RMD, the funds must come out of your IRA by your RMD deadline, generally December 31
- Funds distributed directly to you, the IRA owner, and which you then give to the charity do not qualify as a QCD
- The charity must be a 501(c)(3) organization (which We Care For America is), eligible to receive tax-deductible contributions
If you are at an age where you are required to take minimum distributions and are supporting or wish to support a qualifying charitable organization (like We Care For America), you may want to consider this planning technique.
For better understanding or your tax consequences, consult your tax or financial advisor.