Qualified Charitable Distributions (“QCDs”), also sometimes referred to as Charitable IRA Rollovers, have been in the news recently, especially in light of the proposed SECURE Act 2.0 legislation that passed the House of Representatives in March and is now pending in the Senate.
Through a QCD, starting at age 70½, you can instruct the administrator of your IRA to direct up to $100,000 per year to a qualified charity, including the Omaha Community Foundation. This planning technique could help your tax situation because you would not need to report the amount of the QCD as taxable income.
Here are four important reminders about QCDs:
- Even though the SECURE Act changed the Required Minimum Distribution (“RMD”) age from 70 ½ to 72, the QCD age is still 70 ½.
- QCDs cannot be made to Donor Advised Funds, but you can establish a Designated Fund or other eligible Fund at the Omaha Community Foundation to receive a QCD.
- Under a version of the proposed SECURE Act 2.0 legislation, QCDs would be indexed for inflation. In addition, you could make a one-time QCD of up to $50,000 to a charitable remainder trust or other split-interest entity.
- Finally, be sure to coordinate your QCDs with your RMDs. Proper planning will help avoid troublesome tax pitfalls.
Please contact the Omaha Community Foundation’s Donor Services Team to learn more about QCDs and how you can establish a Fund to support your financial, tax, and charitable giving goals.
The information provided herein is for general informational purposes only and shall not serve as advice regarding the consequences of a charitable contribution. Under no circumstance may communications with OCF be relied upon as tax or legal advice. Additional OCF policies and procedures or agreement terms may apply and should be carefully reviewed.