RMD withdrawl tax free

Submitted by John Fedchak on Fri, 2019-09-06 00:07

Can I write a check directly from my traditional IRA to a church or charity in the amount of my RMD and have no income tax
liability on the RMD? Both state and federal?



Submitted by Alan - IRA critic on Fri, 2019-09-06 00:52

  • Yes, providing the QCD check is made to a 501(c)(3) charity that is not a donor advised fund or private foundation. You must also have reached 70.5 to the day in order to make a QCD. Obviously, you must have check writing authority for your IRA.
  • Because you plan to donate your entire RMD, you cannot have taken any IRA distribution for the year before making the QCD. If you did, that earlier distribution would be applied to your RMD. A later QCD would still be tax free, but would not offset the taxable distribution you did earlier.
  • Finally, when you write your own check, it is critical that the charity promptly negotiates the check because your IRA custodian will not record a distribution until the check is returned to them.  Therefore, it is wise to clarify this requirement with the charity and probably conclude your QCDs by early November to make sure there is time to clear the checks. Some charities are not too efficient, particularly at year end.

Submitted by John Fedchak on Fri, 2019-09-06 01:29

So I could write the check for the distribution from the IRA account(since ther are checking privileges) rather than have the financial institution transfer funds via check to the 501(c)(3) charity. Is that correct?

Submitted by Alan - IRA critic on Fri, 2019-09-06 02:06

Yes, a QCD can be made by either the custodian writing the check as directed by you, or by you made out to the charity. 

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