Qualified Charitable Distributions (QCDs)
A QCD is a direct transfer of funds from your IRA, payable to a qualified charity. A QCD excludes the amount donated from taxable income (deducted). A reduced taxable income could reduce the impact to tax credits and deductions, like Social Security and Medicare. Funds distributed directly to you, the IRA owner, then given to charity do not qualify as a QCD.
Benefits Include, but not limited to:
- QCDs can be counted toward satisfying your Required Minimum Distributions (RMDs) for the year, as long as certain rules are met
- No requirement to meet the standard deduction or itemizing deductions with a QCD
- Can make QCDs from Inherited IRA’s or Roth IRA if certain circumstances are met.
Be Aware:
- Contributing to an IRA may result in a reduction of the QCD amount you can deduct
- Any amount donated above your RMD doesn’t not count toward satisfying a future year’s RMD
- If you receive gifts in direct response to your gift, the QCD does not qualify
- Charity examples that may NOT qualify include private foundations, Donor Advised Funds, or most Charitable Trusts over $50,000
