Did you know you can make a direct transfer from your IRA to Neighbors Who Care and avoid fees and hassles? You can! Just give your investment advisor a call and tell them you want to direct a QCD to Neighbors Who Care!
Plus, this transfer can count toward your annual Required Minimum Distribution!
A Qualified Charitable Distribution or QCD as it is known, means you may order a transfer of your own funds from your custodian to a qualified charity, just like Neighbors Who Care.
Each year, we are extremely grateful for the generous giving our community offers us. When you make a donation as a QCD, the amount you donate is then deducted from any taxable income you have. Keeping your taxable income lower allows you to reduce the impact to certain tax credits and deductions, including Social Security and Medicare.
A QCD can be a useful way of removing an otherwise taxable Required Minimum Distribution payment from being added as income on your tax return. Unlike other forms of charitable giving that require you to itemize the gift in order to deduct the contribution on your tax return, the QCD does not have to be itemized.
Who is eligible to make a QCD?
Many IRAs are eligible for QCDs—They are Traditional, Rollover, Inherited, SEP (inactive plans only), and SIMPLE (inactive plans only).
There ARE rules. Here they are:
- The donor must be 70½ or older.
- QCDs are limited to the amount that would otherwise be taxed as ordinary income. This excludes non-deductible contributions.
- Each year, 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.
- 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.
Neighbors Who Care qualifies!
Charities that are eligible for QCDs must be 501(c) (3) organizations, meaning they are eligible to receive tax-deductible contributions. Some charities, such as private foundations or donor-advised funds, do not qualify for QCDs.
- You shall report your QCD as a normal distribution on IRS Form 1099-R.
- If you have an Inherited IRAs or Inherited Roth IRAs, QCD will be reported as a death distribution.
- After you have made your QCD, the charity must supply you with the same donation acknowledgement as any other donation. Neighbors Who Care is happy to promptly acknowledge your contribution with this official letter.