Qualified Charitable Distributions (QCDs)

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 extended tax-free distributions from IRAs for charitable purposes for 2010 and 2011.

Taxpayers can have a QCD made to an organization eligible to receive tax-deductible contributions—if all requirements are met, this will exclude any part of the distribution that would otherwise be taxable. Form 1099-R would be issued; there is no distribution code for box 7 that identifies a QCD. Distributions from IRAs are eligible (with the exception of ongoing SEPs or SIMPLE IRAs). Requirements for a QCD include:

• Taxpayers must be at least 70½ years old at the time of the distribution
• The distribution must be made by the trustee directly to the organization
• The aggregate amount of QCDs excluded from the taxpayer's gross income cannot be more than $100,000; on a joint return, the spouse is eligible for the same amount
• The amount cannot be included with other charitable contributions on Schedule A