IRA Charitable Giving FAQs

Because a Qualified Charitable Distribution (QCD) is not included in income as a distribution, tax-wise, this is better than taking a taxable IRA distribution and trying to offset it with a charitable contribution deduction.

Amounts distributed as a QCD can be counted toward satisfying your Required Minimum Distribution (RMD) for the year, up to $100,000, and can also be excluded from your taxable income. Individuals turning 70½ after December 31, 2019 are not eligible to take a QCD until age 72.

Funds must be transferred directly from the IRA to an eligible charity by the IRA trustee in order to qualify for the tax break. If you withdraw the money from your IRA and later donate it, it won't qualify as a tax-free qualified charitable distribution.

You are jump-starting the legacy you would like to leave and giving yourself the joy of watching your philanthropy take shape. Moreover, you can fulfill any outstanding pledge you may have made by transferring that amount from your IRA.

The legislation requires you to be at least age 70½ at the time you make the gift.

Contact your IRA custodian to complete your gift.

Contact your IRA custodian to complete your gift.

If your IRA is valued at more than $100,000, you can transfer a portion of it to fund a charitable gift.

For example, you can give each organization $50,000 this year or any other combination that totals $100,000 or less. Any amount of more than $100,000 in one year must be reported as taxable income.

If you have a spouse (as defined by the IRS) who was 70½ (on or before December 31, 2019) or older and has an IRA, he or she can also give up to $100,000 from his or her IRA.

Your charitable gift through an IRA qualified charitable distribution is included as part of your giving history and your cumulative lifetime giving.

It may not be used for giving where membership has benefits, or the donor is receiving something in exchange for their contribution.

Under certain circumstances, however, you may be able to roll assets from a pension, profit sharing, 401(k) or 403(b) plan into an IRA and then make the transfer from the IRA to Minnesota State Mankato Foundation. To determine if an IRA rollover is available for your plan, speak with your plan administrator.

That's a good thing, but there's a bit of a downside, too. The QCD cannot also be used as a deductible charitable contribution if you itemize your deductions. That would be something of a double tax break for the same transaction. As a practical matter, the Tax Cuts and Jobs Act effectively doubled standard deductions for all filing statuses beginning in 2018, so itemizing might be less advantageous for some taxpayers now than it was in previous years anyway. You would need more in overall itemized deductions than the standard deduction for your filing status to make itemizing worthwhile.

Please contact Cindy Arndt if you wish to designate your gift to be used for a specific purpose, program or department. cynthia.arndt@mnsu or (507)389-6829.

Individuals turning 70½ after December 31, 2019 are not eligible to take a QCD until age 72.