Qualified Charitable Distributions (QCD’s)

Qualified Charitable Distributions (QCD’s)

By Susan M Schneider Director of Finance

Are you 70 ½ years or older?  Do you have aspirations of giving to Camp Ondessonk or other non-profit organizations?  Have you met your Required Minimum Distribution this year?  If so, please consider the Qualified Charitable Distribution (QCD) provision as an effective means of avoiding taxation of philanthropic gifting.

A Qualified Charitable Distribution is a tax-free direct transfer from your personal retirement program to a charitable organization.  You must be 70 and ½ to be eligible to make a Qualified Charitable Distribution (QCD).  QCD’s are permitted from IRA’s, inherited IRA’s, SEP and Simples plans.  QCD’s are not eligible for employer plans.  There is an annual limit of $100,000 per person per year. If you file a joint return, your spouse can also make a QCD within the same year.  The QCD must be a transfer directly to a 501 (c) (3) organization.

The Distributions can be beneficial to those whose IRA distributions would push them into higher federal income tax bracket, increase taxability of Social Security Income and reduce phase-outs affected by your adjusted gross income.