QUALIFIED CHARITABLE DISTRIBUTION

Distributions to charity, not subject to income tax.

You, the donor, must be at least 70½ in order to qualify for this type of distribution, called a Qualified Charitable Distribution (QCD). The maximum per-person annual amount to qualify for a QCD is $100,000. Only distributions from your IRA will qualify.

QCDs can only go to public charities (such as Mission to the World or your local church), not to your Donor Advised Fund (DAF). QCD distributions are deemed to satisfy your Required Minimum Distribution (RMD) requirements for any given year.

The benefit of doing a QCD from an IRA is that the distribution comes out of the IRA without any of the tax consequences that would otherwise apply to a withdrawal. Note that there is no charitable deduction for making a QCD distribution to charity.

TO COMPLETE A QCD:

70 ½

1. Already be age 70 ½ on the date of the distribution.

DISTRIBUTION FORM

2. Submit a distribution form to your IRA custodian, requesting that the check be made payable directly to the charity.

TAX WITHHOLDING

3. Ensure that no tax withholding is being done from the QCD to the charity.

MAIL THE CHECK

4. Send the check, made payable to the charity, directly to the charity, or send to yourself as the IRA owner, then forward to the charity.

TO SUM UP ...

While the process of completing a QCD to a charity is fairly straightforward, the key administrative requirement is that the distribution check must be made payable directly to the charitable entity. If the funds are payable to you and then you pass along the funds to charity, it would still be considered a taxable distribution to you, the IRA owner.

We strongly suggest that you begin the process of getting the proper form from your IRA custodian long before year-end as this process can take some time. Your charity would need to have the actual check by Dec. 31 in order for the QCD to qualify for any particular year.

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This website is for informational purposes only and is not intended to be legal, tax, or financial advice. Please consult your legal and tax advisors to verify its applicability to your specific circumstances.