Qualified Charitable Distribution
If you have an individual retirement account (IRA) and are age 70 ½, a tax effective method for making charitable contributions is to take a qualified charitable distribution (QCD) from your individual retirement account (IRA). A QCD is a distribution from your IRA that is made to a 501(c)(3) charity which you designate. Your QCD is not treated as taxable income to you (under Federal, Michigan and Ohio income tax law).
FCAPC is a qualified organization to which a QCD may be made. Please feel free to contact Fionne Wright at [email protected] or 419-244-3053 ext. 221.
Additional federal tax information regarding QCDs:
Each year, an IRA owner age 70½ or over when the distribution is made can exclude from gross income up to $108,000 of these QCDs. For a married couple, if both spouses are age 70½ or over when the distributions are made and both have IRAs, each spouse can exclude up to $108,000 for a total of up to $216,000 per year.
The QCD option is available regardless of whether an eligible IRA owner itemizes deductions on Schedule A. No itemized deduction is available for the QCD.
The QCD has to be made directly to the charity. That direct payment can be accomplished by either the IRA trustee sending a check directly to the charity (such as FCAPC) or sending to you that check made out to the charity that you deliver to the charity. An IRA distribution check payable to you followed by a donation to a charity is not a QCD.
If you are subject to the “required minimum distribution” (“RMD”) rules, the QCD can be used to satisfy your RMD. Generally, the RMD rules require the IRA owner to take a specified distribution amount each year after attaining age 73 (the applicable age before January 1, 2033) and can apply to someone younger than 73 who has inherited an IRA. Because the QCD is not treated as taxable income and can satisfy your RMD, a QCD is a tax effective method for making charitable donations.
This QCD explanation is intended to be generally informative and is believed to be accurate, but FCAPC is not providing tax advice. In deciding whether QCDs make sense for your tax situation, you should seek independent tax advice from a qualified tax advisor.
FCAPC is a qualified organization to which a QCD may be made. Please feel free to contact Fionne Wright at [email protected] or 419-244-3053 ext. 221.
Additional federal tax information regarding QCDs:
Each year, an IRA owner age 70½ or over when the distribution is made can exclude from gross income up to $108,000 of these QCDs. For a married couple, if both spouses are age 70½ or over when the distributions are made and both have IRAs, each spouse can exclude up to $108,000 for a total of up to $216,000 per year.
- The $108,000 dollar limit is the limit for 2025. The dollar amount is indexed for inflation and adjusted annually.
- The dollar limit is reduced for charitable contributions deducted on your tax return. This reduction is a bit complicated and that explanation is beyond the scope of this general information.
The QCD option is available regardless of whether an eligible IRA owner itemizes deductions on Schedule A. No itemized deduction is available for the QCD.
The QCD has to be made directly to the charity. That direct payment can be accomplished by either the IRA trustee sending a check directly to the charity (such as FCAPC) or sending to you that check made out to the charity that you deliver to the charity. An IRA distribution check payable to you followed by a donation to a charity is not a QCD.
If you are subject to the “required minimum distribution” (“RMD”) rules, the QCD can be used to satisfy your RMD. Generally, the RMD rules require the IRA owner to take a specified distribution amount each year after attaining age 73 (the applicable age before January 1, 2033) and can apply to someone younger than 73 who has inherited an IRA. Because the QCD is not treated as taxable income and can satisfy your RMD, a QCD is a tax effective method for making charitable donations.
This QCD explanation is intended to be generally informative and is believed to be accurate, but FCAPC is not providing tax advice. In deciding whether QCDs make sense for your tax situation, you should seek independent tax advice from a qualified tax advisor.