Qualified Charitable Distributions (QCDS)
Learn what qualifies as a Charitable Distribution and the Tax Advantages involved if you have not met your IRA requirement minimum distribution.
If you have not met your IRA requirement minimum distribution for the calendar year, you are able to utilize a Qualified Charitable Distributions (QCDs) toward your outstanding withdrawals.
What is a Qualified Charitable Distribution?
A Qualified Charitable Distribution is a transfer of funds from your IRA directly to a qualified charity. Utilizing your IRA to make charitable donations has many benefits. It’s tax-advantageous, strengthens your philanthropic giving strategy and even helps to improve physical and mental health!
What are the tax advantages?
Assuming you’re not in need of your IRA distribution funds and must take your requirement minimum distribution (RMD), you can avoid the 50% excise tax penalty by transferring those funds directly to an IRS-eligible charity. Additionally charitable giving can be tax-deductible.
In some cases, IRA owners may want to use a Qualified Charitable Distribution to stay within their current tax bracket by reducing taxable income.
What are the personal benefits?
Beyond the tax-advantages, giving can even improve your physical and mental health! Charitable giving has been proven to lead to a longer life by lowering blood pressure and stress, thus reducing the risk of heart attack and stroke. Plus, it helps to increase self-esteem, lower the risk of depression, and improve overall well-being.
What are the requirements for a Qualified Charitable Distribution?
With a Traditional, Rollover or Inherited IRA, you must meet the following requirements to qualify for QCD:
- Over the age of 70½
- Have met your requirement minimum distribution (RMD) and continue to do so annually thereafter
- Maximum annual distribution applies
- Charities must be a 501(c)(3) or a house of worship and funds must be directly transferred to the charity
- Inactive SEP and SIMPLE IRAs qualify
If charitable giving is important to you, we can help. Associated Bank Private Wealth can help you grow and manage your wealth, while developing a giving plan. Learn more about Philanthropy & Giving.
For more information contact Darcy Elmer today!
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DEPOSITAssociated Bank and Associated Bank Private Wealth are marketing names AB-C uses for products and services offered by its affiliates. Investment management, fiduciary, administrative and planning services are provided by Associated Trust Company, N.A. (“ATC”). Investment management services are also provided to ATC by Kellogg Asset Management, LLC® (“KAM”). ATC is a wholly owned subsidiary and affiliate of Associated Bank, N.A. (“AB”). AB is a wholly-owned subsidiary of Associated Banc-Corp (“AB-C”). KAM is a wholly owned subsidiary and affiliate of ATC. AB-C and its affiliates do not provide tax, legal or accounting advice. Please consult with your advisors regarding your individual situation. (1007)
