IRA Qualified Charitable Distribution
The CARES Act passed by Congress on March 27, 2020, suspended the required minimum distribution (RMD) from IRAs for 2020.However, you may still wish to use IRA funds to make a qualified charitable distribution (QCD).
What is an IRA qualified charitable distribution?
Generally, a qualified charitable distribution is an otherwise taxable distribution from an IRA owned by an individual who is age 70½ or over that is paid directly from the IRA to a qualified charity. You may contribute up to a maximum of $100,000 a year to Northwest University and other charities.
See Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs) for additional information.
Can a qualified charitable distribution satisfy my required minimum distribution from an IRA?
Yes, your qualified charitable distributions can satisfy all or part the amount of your required minimum distribution from your IRA.
Benefits of an IRA Qualified Charitable Distribution
- It minimizes the effect on your cash flow since the gift is from an asset, not your checkbook
- Your gift is excluded from taxable income, which is a nice tax benefit if you do not itemize deductions
- It may prevent you from being pushed into a higher tax bracket and help you avoid the limit on charitable deductions
- It may also reduce the Medicare Part B premiums you pay
- It allows you to make a significant gift to support Northwest University