At the close of 2015, lawmakers approved the Protecting Americans from Tax Hikes (PATH) Act. A provision of this Act made permanent the ability to make Qualified Charitable Distributions (QCDs) from individual retirement accounts. This is a wonderful vehicle for those looking to support our church in a tax-advantaged way.
REQUIREMENTS
- Donor must be 72 years or older (or 70½ before 2019) at the time the distribution is made
- QCDs are made from IRAs or Roth IRAs
- Distributions must be made directly to an organization eligible to receive tax deductible contributions (certain restrictions apply)
- $100,000 annual limit
- Charity receiving gift must provide the donor with proper substantiation of the gift
BENEFITS
- Can satisfy required minimum distribution (RMD) requirements in the year QCD is made
- QCD amount is not included in the donor’s adjusted gross income, helping to potentially avoid increased taxes on SSI, higher Medicare premiums, and the loss of deductions/exemptions
- Provides donors that use the standard deduction a tax efficient way to make a charitable gift