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Take Advantage of an Important IRA Provision!


The Qualified Charitable Distribution (QCD), or the charitable IRA rollover, is a special provision allowing particular donors of age 72 to exclude from taxable income—and count toward their required minimum distribution—certain transfers of Individual Retirement Account (IRA) assets that are made directly to public charities.

This rollover is an attractive option for taxpayers who either don’t want or don’t need the extra taxable income from their IRA’s required minimum distribution. Many donors use this popular option to support the areas of their choice with tax-wise gifts.

Further, doing a QCD is a direct reduction of taxable income even for those who do not have enough deductions to itemize, now that the standard deduction is so high. So, for those who would like to see a tax benefit from their charitable contributions, this is a great way to ensure they aren’t losing out on part or all of their contribution amounts for tax purposes.  

How to make a Qualified Charitable Distribution from your IRA:

Option 1:

Contact your IRA custodian and request a direct transfer to:

Chaffee County Community Foundation

P.O. Box 492 

Buena Vista, CO 81211 

Do not withdraw the funds and make a contribution yourself, or you will have to report the

withdrawal as taxable income.

If you are requesting the transfer at the end of the tax year, allow enough time for the transfer to

complete by December 31.

Option 2:

Send a gift directly to the Chaffee County Community Foundation using your IRA checkbook. Allow extra time for the gift to clear in order to take a tax deduction in the current calendar year. 

Contact Betsy at 719-204-5071 or betsy@chaffeecommunity.org with your name, the exact amount of your gift, and the name of your IRA custodian so we can provide you with substantiation for your tax return. Please note that we are not in a position to give formal tax advice, and we strongly advise you to have these gifts reviewed by your own qualified financial or tax advisors. 

Can I make a QCD?

While many IRAs are eligible for QCDs—Traditional, Rollover, Inherited, SEP (inactive plans only), and SIMPLE (inactive plans only)* —there are requirements:

  • You must be 72 or older to be eligible to make a QCD.

  • QCDs are limited to the amount that would otherwise be taxed as ordinary income. This excludes non-deductible contributions.

  • The maximum annual amount that can qualify for a QCD is $100,000. This applies to the sum of QCDs made to one or more charities in a calendar year. (If, however, you file taxes jointly, your spouse can also make a QCD from his or her own IRA within the same tax year for up to $100,000.)

  • For a QCD to count towards your current year's RMD, the funds must come out of your IRA by your RMD deadline, generally December 31.

Any amount donated above your RMD does not count toward satisfying a future year's RMD.

Funds distributed directly to you, the IRA owner, and which you then give to charity do not qualify as a QCD.

Under certain circumstances, a QCD may be made from a Roth IRA. Roth IRAs are not subject to RMDs during your lifetime, and distributions are generally tax-free. Consult a tax advisor to determine if making a QCD from a Roth is appropriate for your situation.

What kind of charities qualify?

The charity must be a 501(c)(3) organization, eligible to receive tax-deductible contributions.

Some charities do not qualify for QCDs:

  • Private foundations

  • Supporting organizations: i.e., charities carrying out exempt purposes by supporting other exempt organizations, usually other public charities

  • Donor-advised funds, which public charities manage on behalf of organizations, families, or individuals

Tax reporting

A QCD is reported as a normal distribution on IRS Form 1099-R for any non-Inherited IRAs. For Inherited IRAs or Inherited Roth IRAs, the QCD will be reported as a death distribution. Itemization is not required to make a QCD. While the QCD amount is not taxed, you may not then claim the distribution as a charitable tax deduction.

A QCD is not subject to withholding. State tax rules may vary, so for guidance, consult a tax advisor.

When making a QCD, you must receive the same type of acknowledgement of the donation that you would need to claim a deduction for a charitable contribution.

A tax advisor can help you determine if both your IRA and charity qualify for QCDs.