A new way to support education in Haiti: Qualified Charitable Distributions from IRAs

A Qualified Charitable Distribution (QCD) is a donation from a personal IRA directly to a charity. The new law, permanently established in December 2015, permits annual direct transfers directly from the IRA to the Charity, up to $100,000 of pre-tax funds (meaning the funds were not taxed before entering the IRA). This can include cash, securities, property, etc. that are pre-tax funds in an IRA. If funds are transferred from the IRA to the individual then to the Charity, they do not qualify.

There are two key benefits to QCDs:

1. The money donated directly from the personal IRA to the charity is not counted in the adjusted gross income for the individual and are not taxed.
2. Automatically satisfies required minimum distributions (RMDs) for the year when the QCD is made. This is particularly helpful if the individual does not need the RMD for income.

– Must be 70 ½ to make a QCD. If you turn 70 ½ on July 1 but give your QCD on June 30 it does not qualify for the QCD benefits.
– The nonprofit (Haiti Partners) must provide the same contribution acknowledgment needed to claim a charitable income tax deduction. If Haiti Partners doesn’t, the donor cannot claim the QCD. This makes it especially important that you contact our office once a transfer is made as as not all QCDs come with clear indication of who they’re from.
– QCDs may be made from any IRA or individual retirement annuity, but not from simplified employee pension, a simple retirement account or an inherited IRA.

Reasons a QCD gift may be right for you:
– You wish to make a significant gift without using cash or other assets
– You do not need all or a portion of your IRA income
– You are paying too much in taxes and are looking to reduce your taxable income
– You do not itemize deductions. Because a rollover gift can reduce your income and taxes, you can still benefit from charitable giving even as a non-itemizer.
– You want to give over and above your normal giving. An IRA rollover gift does not count towards the 50% annual limitation on charitable gifts.

Making The Contribution
Follow these three easy steps:
1. Consult your financial advisor and family to determine if this is the right mode of giving for you.
2. Contact Brian Ballard at Haiti Partners to receive the exact payee name and information needed to make your gift: 772-226-0034 or brian@haitipartners.org
3. Instruct your IRA trustee or custodian to make a transfer from your IRA directly to Haiti Partners. (Remember, it won’t qualify if the trustee or custodian makes the mistake of putting IRA money in one of your non-IRA accounts as an intermediate step or if the check is made out to you. The law doesn’t allow for checks to be returned and reissued.)

If you have any questions or want to learn more please contact Brian Ballard, Haiti Partners’ Development Coordinator, at 772-226-0034 or brian@haitipartners.org

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