Tax-Free IRA Gifts | IRA Rollovers
The IRA Charitable Rollover.
Required Minimum Distributions (RMD): As of January 2023, under the SECURE 2.0 Act of 2022, the required age for minimum distributions (RMDs) increased to 73 (up from the previous age of 72).
Qualified Charitable Distributions (QCD): At age 70½ an amount of up to $100,000 each year can be directed to a qualified charity.
How does the IRA Charitable rollover work?
- A QCD is a direct transfer of funds from your IRA custodian, payable to a qualified charity.
- QCDs allow taxpayers who are not yet required to take IRA distributions under the RMD rules to still make charitable gifts while excluding the gift amount from taxable income. The QCD funds are also removed from future estate tax calculations which could be a great way to spend down one’s total estate.
- QCDs can be counted toward taxpayer’s RMDs as long as certain rules are met.
Other important information:
- The IRA rollover provision does NOT allow distributions into Donor Advised Funds or for event tickets or sponsorships. However, you may make a distribution into a permanent endowment fund at the Catholic Community Foundation for Eastern South Dakota (CCFESD), or through CCFESD to your favorite qualified charities such as your parish, school, cemetery, etc. Distributions must be sent directly from your IRA account to CCFESD. It cannot be distributed to you first. Please speak to your IRA plan administrator to ensure that the process is followed correctly.
- To utilize the IRA charitable rollover provision in a given year, a distribution must go to a qualified charitable organization such as CCFESD, and must take place prior to year end.
We encourage you to reach out to any of our Catholic Community Foundation Gift Planning Officers to learn more about your eligibility, how this may apply to a family member or loved one. We can be reached at 605-988-3788.