Here is a tax-smart way to make an impact to Navy-Marine Corps Relief Society (NMCRS) using your traditional or Roth IRA. The IRA charitable rollover (also called the Qualified Charitable Distribution, or QCD) is a great way to make a tax-free gift to NMCRS and satisfy your Required Minimum Distribution (RMD). If you are not required to take an RMD but no longer itemize your deductions, then a QCD may be right for you as well.
How Do I Qualify?
The IRA charitable rollover (QCD) offers multiple benefits for making gifts from your traditional or Roth IRA.
- You must be 70 ½ years or older at the time of the gift.
- Gifts must go directly from your IRA to NMCRS.
- Gifts must come from a traditional IRA or Roth IRA account.
- For 2024, total QCD gifts cannot exceed $105,000 per donor.
Additional Benefits of an IRA Rollover Gift
- If you don’t itemize deductions and are not yet required to take your RMD, a QCD offers all of the benefits of an itemized income tax charitable deduction
- If you are age 73 or older and must take your RMD, a QCD can satisfy your RMD without increasing your income taxes.
- It is a wonderful way to create an immediate impact on NMCRS.
Can I use my IRA to fund a Charitable Gift Annuity?
Under a new law effective in 2023, some donors can make a QCD in exchange for a charitable gift annuity. There are some rules and limitations:
- You can exercise this option only once during your lifetime.
- There is an aggregate limit of $53,000.
- The entire payment you receive from your charitable gift annuity will be subject to income tax.
- You can include your spouse as a recipient of the annuity payment.
- There is no income tax deduction for this contribution, although there is no tax on the QCD either.