QUALIFIED CHARITABLE DISTRIBUTIONS

 We are often asked, “What are Qualified Charitable Distributions (QCDs), and How can I make one to St. Vincent de Paul Place?” 

A Required Minimum Distribution (RMD) is the minimum distribution that a taxpayer must make from a retirement account once he/she meets a minimum age.

 The official IRS website says: Taxpayers age 70 ½ or older can make a qualified charitable distribution from their IRA – up to $100,000 – directly to an eligible charity. It’s generally a nontaxable distribution made by the IRA trustee to a charitable organization. A QCD counts toward their minimum distribution requirement for the year.  

However, the SECURE Act of 2019 changed the ages. So now, if you reached the age of 70½ in 2019 the prior rule applies, and you must take your first minimum distribution by April 1, 2020. If you reach age 70 ½ in 2020 or later you must take your first RMD by April 1 of the year after you reach 72.

 Essentially what this means is that an individual who is required to take a distribution from a retirement account (an RMD) can make that distribution directly to a charitable organization like Saint Vincent de Paul Place. This distribution is known as a QCD. If a QCD is made, the taxpayer is not required to include the distribution in his/her income for that year. Since the taxpayer does not include the distribution in income, he/she gets the benefit of the deduction without having to itemize his/her deductions. This also means that the donor cannot claim the deduction as an itemized deduction.

 How can one make a QCD to Saint Vincent de Paul Place?

 The payment must be made directly from the financial institution to Saint Vincent de Paul Place. However, it is important the donor have a record of the transaction.  It is still a deduction that must be verified by the donor if questioned by the IRS.  Therefore, we suggest that the donor request that the check be made out to Saint Vincent de Paul Place and mailed to Saint Vincent de Paul Place c/o the donor with the donor’s address (see example below). The donor can then make a copy of the check, for their tax records, before sending it to us. In the past some people have had the check sent directly to us with no way of us knowing who sent it.  We cannot acknowledge the donor and the donor cannot verify the donation. The example below eliminates these problems.

 Example of Check from Financial Institution:

 Saint Vincent de Paul Place

c/o Emily Jones

123 Elm Street

Norwich, CT 06360

 As always, we suggest that you check with your tax preparer or some other tax professional to see if QCDs are for you.