Qualifications and Rules
Certain qualifications must be met:
- You must be at least age 701⁄2 when the distribution is made.
- The maximum annual exclusion for QCDs is $100,000 per taxpayer. Any QCD in excess of the $100,000 exclusion limit is included in income as any other distribution. If you file a joint return, your spouse can also have a QCD and exclude up to $100,000.
- The amount of the QCD is reduced by the aggregate IRA contribution deductions made by you after you turned 70 1⁄2.
- A QCD may be used to satisfy all or part of your required minimum distribution (RMD) but is not limited to the RMD amount.
- You must have the same type of acknowledgment of your contribution that you would need to claim a deduction for a charitable contribution.
- A charitable contribution deduction on Schedule A (Form 1040), Itemized Deductions, cannot be claimed for any QCD excluded from income.
- The QCD amount is limited to the amount of the IRA distribution that would otherwise be included in income. If your IRA includes nondeductible contributions, the distribution is first considered to be paid out of otherwise taxable income.
- The QCD cannot be distributed to you first and then donated, it must be transferred directly to the charity. Any check issued must be made payable to the charity. If you have check-writing privileges for an IRA, you may be able to write out a check to the charity. Check with your IRA trustee for the proper QCD procedure.