QCD / RMD
Qualified Charitable Distributions (QCDs)
King’s Way is a “Qualified Charity” under the IRS Code and is able to accept Qualified Charitable Distributions (QCDs). Using this strategy you can donate up to $100,000 per year to King’s Way and/or other qualified charities and avoid taxes on otherwise taxable distributions from your IRA.
If you are over the age of 70.5 years old, you can give money directly from your IRA account to King’s Way and the proceeds are not subject to federal income, as the amount is simply excluded from your taxable income.
Required Minimum Distributions (RMDs)
Required Minimum Distributions (RMDs) are minimum amounts that IRA and retirement plan account owners generally must withdraw annually starting with the year they reach age 72 (73 if you reach age 72 after Dec. 31, 2022).
If you are subject to Required Minimum Distributions (RMDs), the QCD counts toward meeting that requirement.
QCDs are potentially beneficial to the donor for the following reasons:
- Donors who are subject to RMDs that don’t have another use for the funds can give the money to charity and not pay income taxes on the money. Normally the RMD is counted as income and the donor must pay taxes on that money each year.
- Donors who give money to charity but are still subject to the standard deduction do not get a tax benefit from donating to charity. If they are in that situation but use a QCD strategy, they now get the tax benefits of donating to charity because this amount comes out of their IRA completely tax free when it would otherwise be taxed.
Note: Please consult your tax and/or investment advisor to confirm eligibility for the above donation strategies.