A Qualified Charitable Distribution from an IRA (“QCD”) is a unique opportunity to support Woodlawn while receiving an enhanced tax benefit in return.
Each year you can make a distribution of up to $100,000 to Woodlawn from a traditional individual retirement account. That contribution is counted toward your annual required distribution from an IRA, but the contribution is not included in your taxable income.
In effect this provides a 100% reduction of taxable income. This differs from a typical charitable contribution, which has a percentage limitation on the amount that may be deducted from taxable income in the year of contribution. Thus, a distribution from an IRA to Woodlawn can increase your tax savings. And, although required minimum distributions are not required in 2020 under the Cares Act, a contribution to Woodlawn during 2020 can reduce the amount of future taxable IRA distributions.
In order to qualify for this tax benefit by making a distribution to Woodlawn from an IRA:
- You must be at least 70 ½ years of age at the time of the contribution;
- The distribution must be made from an IRA (charitable donations from a 403(b) plan, a 401(k) plan, a pension plan or other retirement plans are not eligible for the tax free treatment);
- The distribution must be made directly to Woodlawn from the IRA (you cannot withdraw funds from an IRA and then contribute the funds to Woodlawn);
- Your total combined QCD donations cannot exceed $100,000 in any one year;
- You cannot receive any goods or services in return for the QCD; and
- You must receive an acknowledgement from Woodlawn for each QCD with specific language required by the IRS.
Woodlawn would be happy to assist in providing instructions to your IRA custodian for making a direct distribution to Woodlawn to permit you to achieve this tax benefit. Woodlawn will also provide the appropriate acknowledgement to you and to the custodian of your IRA.
The benefit described above is available under federal tax law. We strongly recommend that donors interested in making a contribution to Woodlawn directly from an IRA should consult with their tax advisor regarding the availability of this benefit under the laws of their state of residence.