Overview
- IRA owners 70½ or older may request an IRA distribution to be paid directly to an IRS “qualified charity” and may satisfy a required minimum distribution (RMD) with the withdrawal. Unlike the RMD paid directly to the IRA owner, the Qualified Charitable Donation (QCD) is excluded from your taxable income.
About Charitable Distributions
What is a Qualified Charitable Distribution (QCD)?
- An otherwise taxable distribution from an eligible IRA owned by an individual 70½ or older paid to an IRS qualified charity.
How to determine if a charity can receive the QCD?
- The IRS Exempt Organizations Select Check allows users to Search for Charities among a list of organizations eligible to receive tax-deductible charitable contributions.
Where can an IRA owner find additional information on QCDs?
- Visit Charitable Donations for IRAs for additional information on qualified charitable distributions. See also IRS Publication 590-b.
How to request a Qualified Charitable Donation?
- Log in to Client Portal
- Click the Transfer & Pay menu followed by Transfer Funds
- Select Charitable Donation
- Enter your Donation Amount
- Select a Charity
- Review Donation
- Confirm Donation
Financial Advisors are eligible to request QCD on behalf of their clients. Please refer for more information to Qualified Charitable Distributions: A Guide for Financial Advisors
What do I do if the charity I want to donate is not on the list?
- Log in to Client Portal
- Click the Transfer & Pay menu followed by Transfer Funds
- Select Charitable Donation
- Enter the donation amount
- Select Other from the charity drop-down list
- Enter the charity information (Name and EIN)
- Review the donation
- Confirm the donation
Review and Approval
- Donations for charities not on the list are subject to review and approval, which may take several business days to complete. Submission of a request does not guarantee approval.
- Once submitted, you can monitor the status of your request within Client Portal > Transaction Status & History.
Please Note: That during year-end, request volumes increase significantly, which can extend review times. We recommend submitting requests as early as possible to meet any deadlines.
What amount may be withdrawn? Why?
- We will process the withdrawal for any amount, as long as the account has sufficient available funds. Why? Although the QCD donations to the charity must not exceed $111,000 per year to retain QCD status, charitable gifts may exceed this limit.
Where are the funds disbursed?
- Funds are made payable to the IRS qualified charity and mailed direct to the charity. Only funds disbursed to the charity can be designated from your IRA as a QCD.
Does the distribution count towards the Required Minimum Distribution (RMD) amount?
- Yes, the distribution does count towards the Required Minimum Distribution (RMD) account.
Eligible IRA Accounts
Is the Charitable Distribution allowed from all IRAs held here?
- No, IRA owners should contact a qualified tax advisor about how to preserve QCD tax benefits. Not all distributions are created equal. A tax advisor will be able to assess an IRA owner’s best choice.
List of Charitable Distribution allowed from all IRAs held here:
- Traditional IRA: Yes
- Rollover IRA: Yes
- Roth IRA: Yes
- Inherited IRA: Yes, if the beneficiary is at least age 70 1/2
- SEP IRA: No
- Education IRA: No
Are the Charitable Distributions allowed from other IRA and retirement plans not held here?
- No, Charitable Distributions are not permitted from IRA and retirement plans held elsewhere; they must be made directly from accounts held here. Retirement plans, employer sponsored SEP IRAs, and Simple IRAs (account classifications not held here) are not eligible for a QCD election. IRA owners may be eligible to rollover assets from these plans into a traditional, rollover, or Roth IRA to request a charitable distribution. IRA owners should contact a qualified tax advisor or their retirement plan administrator.
QCD Tax Reporting
How is the QCD reported to the IRS?
- We will report QCD to the IRS and the charitable distributions on Form 1099-R when issued. See Reports and Dates for 1099 availability dates.
Can any taxes be withheld from the distribution?
- No taxes cannot be withheld from distribution.
Do federal taxes have to be paid on the distribution?
- Generally, federal taxes are not paid with QCDs. But distributions in excess of the IRS limit may be subject to income tax. We recommend that clients contact a qualified tax advisor.
Does a state or municipal tax have to be paid on the distribution?
- Contact your tax advisor or local tax authority on state and municipal requirements for the distributed amount.
Disclaimer: We do not provide tax advice. These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any international, federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor. We recommend that you consult a qualified tax advisor or refer to the U.S. Internal Revenue Service.