Withdrawal from traditional IRA as QCD
Yesterday I went to the bank where I have maintained my IRA’s for a long time. I am over 72 years old in 2021
and like I have been doing QCD for many years, I requested a portion of my RMD of my traditional IRA that is to be
taken in 2022, as a QCD for $600.00. My total RMD to take out in 2022 is about $10,200.00
I requested a separate check for the $600.00 QCD to be made to the charity, like in prior years.
The bank officer told me they could not do it. They will have to issue the check payable to me. I told them
to check with their experts because that defeats the purpose of the QCD.
Has anything changed about this option on how to do QCD in 2022?
If not, and it can be done as before, can you tell me the specific regulation or other section of the IRS code
I can show this bank officer to allow me to do the QCD in 2022 as in prior years.
A related question. Does the order of RMD and QCD matters? For example can i do:
First a QCD for $ 600 now
Second a withdrawal to me for $ $9100 now
Third another QCD later in the year for $500
Permalink Submitted by Dan Zaehring on Thu, 2022-02-24 05:03
Your bank officer is indeed mistaken. While the check could be delivered to you, it must be made out directly to the charity in order to meet the requirements for a QCD. The QCD will apply toward your annual RMD, leaving less to take as a taxable distribution.
Permalink Submitted by Alan - IRA critic on Thu, 2022-02-24 15:12
Ref IRS Sec 408(d)(8)(B) – QCD must be payable direct to the charity.
Related question – yes, that order is OK because you will have completed your QCDs before completing your RMD.
Your first QCD must not have occurred before the exact date you reached 70.5.
Many banks are totally clueless about IRA related rules and issues. Watch out and verify what they tell you, as you may know more about the rules than they do.