QCDs Explained
How this financial tool can benefit your favorite charities and help your tax position
Qualified Charitable Distributions (QCDs) can be an easy way for individuals to support WPC or other favorite causes while also getting favorable tax treatment.
People aged 70-½ and over can employ a qualified charitable distribution from their traditional IRAs to make charitable donations to WPC or other charities. The QCD amount won’t be included in taxable income, can satisfy your required minimum distributions (RMD), and will reduce the amount of future RMDs.
QCDs will help keep your taxable income level at a lower tax bracket and reduce your potential exposure to the Medicare surtax. For instance, individuals aged 70-½ years and over may count QCDs towards their RMD for the year, lowering their taxable income.
Maximum Allowable Contributions
For individuals aged 70-½ and above, the maximum yearly QCD is $105,000 per individual in 2024 ($108,000 for 2025). If donations have been made to more than one charity, the sum of these amounts can reach up to $105,000 in 2024 ($108,000 for 2025). For spouses filing jointly, each can make a $105,000 in 2024 ($108,000 for 2025) QCD from their respective IRAs.
Eligible Accounts and Recipients
Only traditional IRAs, inherited IRAs, inactive SEP IRAs, and inactive SIMPLE IRAs are eligible for QCDs. Specific charities, including donor-advised funds, private foundations, and organizations supporting tax-exempt charities, cannot receive QCDs.
The Logistics
The QCD amount is paid directly from the individual's IRA to WPC or another selected charity. This arrangement exempts the QCD amount from income taxes while helping individuals fulfill their required annual RMD.
For a QCD to count under an individual's RMD for the current year, the charitable donation amount must be withdrawn from the IRA by the deadline, typically December 31.
Summary
A QCD is a transfer of funds directly from an IRA to WPC or another qualifying charity. The transfer process is executed by the financial institution managing the donor's IRA through a check payable to WPC. The QCD can fulfill your annual operating support for WPC or for a special Legacy gift to WPC.
For further information about QCDs, please contact team member Allen Thomas. Contact any member of the Legacy Giving Committee with questions about the program:
