Giving to Immanuel - Part 3

This is one of three articles about how you can contribute financially to Immanuel Highlands. This article covers qualified charitable distributions from IRA accounts. The other articles discuss cash gifts and gifts of appreciated securities.

A qualified charitable distribution (QCD) is a distribution of funds directly from your IRA to Immanuel church. You are eligible for QCD’s once you turn 70½ even if you are not yet subject to required minimum distributions (RMD’s). In most cases, QCD’s count toward RMD’s but do not represent taxable income. Because they are not taxable income, QCD’s cannot be deducted as charitable contributions. But avoiding income can be superior to deducting contributions because the taxable portion of Social Security benefits and surcharges for Medicare Parts B and D depend on your gross income. Avoiding taxable income in the first place can be better than deducting it later.

The amount of a QCD is not related to your RMD; you may donate any amount via QCD’s up to $100,000 annually (for each spouse if you file a joint income tax return). Amounts that exceed your RMD do not count toward future RMD’s. Funds distributed directly to you, the IRA owner, and which you then give to charity do not qualify as a QCD, so consult your IRA custodian to initiate a QCD. Qualified charitable distributions can only be made from IRA accounts, not from other retirement accounts such as 401(k) or 403(b) plans.
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Please note that Immanuel Highlands does not render legal or tax advice. For advice and assistance in specific cases, you should obtain the services of an accountant, attorney, or other professional advisor.