Making an IRA Qualified Charitable Distribution (QCD) in 2021

Making an IRA Qualified Charitable Distribution (QCD) in 2021

The Cares Act suspension of required minimum distribution (RMD) has not been extended into 2021. If you are 70 ½ and older, you can donate up to $100,000 in IRA assets directly to the Community Foundation without taking the distribution into taxable income. Remember, the new RMD age is 72; if giving a QCD at 70 ½, you will reduce future RMD by lowering your overall IRA balance.

How to donate an IRA gift?

  1. Contact your IRA provider
  2. Must be 70 ½ and older
  3. Applies to Traditional IRAs
  4. The maximum amount cannot exceed $100,000 per tax year from an individual IRA.
  5. Distributions must be made payable to a qualifying charity, such as the Community Foundation.
  6. The transfer must be made by December 31st to count against the year’s RMD requirement.

Only certain types of funds administered by the Community Foundation can receive a QCD; see the below list for acceptable types of funds:

Community Granting Funds
Designated Funds
Field of Interest Funds
Organization Funds
Scholarship Funds

Notice Donor Advised Funds and Gift Accounts are not permitted to accept a QCD. However, you can give an IRA gift to these types of funds and receive a charitable tax deduction, lowering your adjusted gross income (AGI) if itemizing.

Please consult your professional advisors to choose the most appropriate tax strategy for you, as this is another way you can add value to making the most of your donations.

Contact Jessica Fortkamp at jfortkamp@commfoun.com or 937-497-7800 to learn more about ways to give.

2021-04-26T18:00:04+00:00

About the Author: