Qualified Charitable Distributions (QCDs), also known as IRA Charitable Rollovers, are the savviest way for individuals age 70.5 or older to use their IRAs to maximize their charitable impact.
Whether you want to make a QCD gift to Olympic Peninsula Humane Society today, request a tax acknowledgement letter for a gift already made, or just learn more about QCDs, you can find resources for each below.
I’ve already made a QCD gift to Olympic Peninsula Humane Society and I need a tax acknowledgement letter.
Thank you for your support! If you’ve already given a QCD gift to Olympic Peninsula Humane Society and haven’t yet received your acknowledgement letter, please report your gift details so that we can verify your gift and provide you with your letter.
A brief guide to Qualified Charitable Distributions
What are Qualified Charitable Distributions?
Qualified Charitable Distributions (QCDs) are funds from your Individual Retirement Account (IRA) that can be donated to a nonprofit organization without first recognizing it as income.
QCDs are also sometimes referred to as IRA Charitable Rollovers.
Up to $100,000 in IRA funds can be counted as QCDs annually, or $200,000 for married couples.
Who is eligible?
If you are above the age of 70.5 and have a Traditional IRA, you are eligible to make a QCD.
What are the benefits?
QCDs reduce your taxable income
Normally, funds that are withdrawn from a Traditional IRA count toward your annual income, which will increase your overall tax burden. In some cases, this increase may also move you into a higher tax bracket.
However, QCDs are an exception to this rule—funds go directly from your IRA to your chosen charitable organization without needing to be withdrawn, thereby helping you avoid higher income taxes.
QCDs satisfy Required Minimum Distributions
Required Minimum Distributions (RMDs) are amounts that you must withdraw annually from your Traditional IRA once you reach a certain age. As of Jan. 1, 2020, this age is 72.*
If you do not withdraw your RMD, you will face a penalty tax of 50% of the required withdrawal amount. QCDs can be used to meet this RMD requirement and avoid penalties.
*If you were at least 70.5 years old before Jan 1, 2020, you are still required to take out your RMD, even if you are not yet 72.
(In response to the Coronavirus outbreak, Congress has waived the RMD rules for qualified retirement accounts for 2020.)
Read more about RMDs on the IRS website
QCDs maximize your charitable impact
Because QCDs do not need to be recognized as income, charitable organizations receive the full amount of the transfer tax-free.
It’s a win-win situation that both supports you and the causes you care about.
How do I get started?
In the past, making a QCD was a complex process involving contacting your financial custodian and wrangling the correct paperwork.
With FreeWill, making a QCD is now easier than ever. Just input information about your intended gift online, and we’ll provide the correct forms with the details filled in. From there, just follow the directions to print, sign, and mail it in.
Are you ready to make your most savvy gift to Olympic Peninsula Humane Society?
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OPHS is a 501(c3) nonprofit organization. Tax ID #91-6001724