The Latest on Qualified Charitable Distributions (QCDs)

Tuesday, December 09, 2014

By Joe Cicchinelli, IRA Technical Expert
Follow Me on Twitter: @JoeCiccEdSlott

Many of you have asked us if Congress will reinstate Qualified Charitable Distributions (QCDs) for 2014. As of today they have not yet been reinstated for 2014, but that doesn’t mean Congress has forgotten about them. Here’s the latest on what’s happening.

Congressman David Camp (R- MI), who is also the Chairman of the House Ways and Means Committee, introduced the Tax Increase Prevention Act (H.R. 5771), which temporarily extends a number of expired tax provisions for one year. This legislation also includes an extension of QCDs from IRAs. Last week, on December 3, 2014, the House of Representatives passed H.R. 5771, but the Senate has yet to vote on it. And, assuming the Senate passes it, the legislation would then need to go to the President for his signature. With only a few weeks left in 2014, it’s anyone’s guess whether the legislation will become law this year.

QCDs, also known as charitable rollovers, were a way to make a charitable donation from your IRA on a tax-free basis as long as certain rules are followed. The IRA distribution will be tax-free as long as the money is paid (or transferred) directly to a qualifying charity. The distribution has to be made from an IRA only, including Roth IRAs and inactive SIMPLE and SEP IRAs. It does not apply to a company retirement plan such as a 401(k) plan. It applies to IRA owners or beneficiaries who are age 70 ½ or older at the time of the distribution and is capped at $100,000 per person per year. QCDs also will satisfy a required minimum distribution (RMD), but the IRA distribution is tax-free. So, if you’re giving money to charity anyway, you might want to consider using a QCD to do so, assuming Congress reinstates them.

Over the years, Congress has a history of allowing the QCD option to expire and then renewing it, usually retroactively, to the beginning of the year. Hopefully Congress will reinstate QCDs for 2014, but it’s important to remember that they haven’t done that yet. As always, we will keep you posted.

Post Views: 1
Posted in: ,

Content Citation Guidelines

Below is the required verbiage that must be added to any re-branded piece from Ed Slott and Company, LLC or IRA Help, LLC. The verbiage must be used any time you take text from a piece and put it onto your own letterhead, within your newsletter, on your website, etc. Verbiage varies based on where you’re taking the content from.

Please be advised that prior to distributing re-branded content, you must send a proof to [email protected] for approval.

For white papers/other outflow pieces:

Copyright © [year of publication], [Ed Slott and Company, LLC or IRA Help, LLC – depending on what it says on the original piece] Reprinted with permission [Ed Slott and Company, LLC or IRA Help, LLC – depending on what it says on the original piece] takes no responsibility for the current accuracy of this information.

For charts:

Copyright © [year of publication], Ed Slott and Company, LLC Reprinted with permission Ed Slott and Company, LLC takes no responsibility for the current accuracy of this information.

For Slott Report articles:

Copyright © [year of article], Ed Slott and Company, LLC Reprinted from The Slott Report, [insert date of article], with permission. [Insert article URL] Ed Slott and Company, LLC takes no responsibility for the current accuracy of this article.

Please contact Matt Smith at [email protected] or (516) 536-8282 with any questions.