Qualified Charitable Distributions: Important Reminders and Good News
Qualified Charitable Distributions, or "QCDs," have been in the news a lot lately, especially in light of proposed SECURE Act 2.0 legislation that passed the House of Representatives in March and is now pending in the Senate.
Through a QCD, starting at age 70 ½, you can instruct the administrator of an IRA to direct up to $100,000 per year to a qualified charity. This helps your tax situation because you do not need to report the amount of the QCD as taxable income.
Here are four important reminders about QCDs:
- Even though the SECURE Act changed the Required Minimum Distribution age to 72 from 70 ½, the QCD age is still 70 ½.
- QCDs cannot be made to donor-advised funds, but you can set up a field-of-interest fund, designated fund or give to the Community Impact Fund at the Community Foundation to receive a QCD.
- Under a version of the proposed SECURE Act 2.0 legislation, QCDs would be indexed for inflation. In addition, proposed legislation would allow you to make a one-time QCD of up to $50,000 to a charitable remainder trust or other split-interest entity.
- Finally, be sure to coordinate your QCDs with your Required Minimum Distributions. Proper planning will help you avoid troublesome tax pitfalls.
To learn more about QCDs and how you can establish a fund to support your financial and charitable goals, reach out to Brandon Butterworth at firstname.lastname@example.org, Vice President of Philanthropic Services for a no-cost personal consultation.
This content is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.