Giving from your IRA Required Minimum Distribution (RMD)

Qualified charitable distributions (QCD) allow you to instruct your IRA administrator to direct your RMD (up to $100,000 per year) to qualified 501(c)(3) charities (donor-advised funds do not qualify). Since the IRA distribution is sent directly to the charity through your plan administrator, the QCD is not reported as taxable income. This is a win-win option for donors who want to support nonprofits in a tax-advantaged way!

Who this applies to:

If you are age 70½ or older, you can transfer up to $100,000 from your traditional Individual Retirement Account (IRA) directly to a charity. If you are 73 or older, the transfer counts towards your Required Minimum Distribution and allows you to avoid paying income tax on the distribution, while supporting your favorite charity or any fund at the Community Foundation that is not a Donor-Advised Fund. Please consult a tax advisor regarding your specific situation.

Where to Give

QCD gifts can be made directly to the nonprofits you give to regularly or you can give to an existing fund at the Community Foundation. This year we recommend using your RMD to support the Greatest Needs Fund, Friends of the Foundation Fund, or Rise Together Fund for Racial Equity. We’ll use our over 40 years of philanthropic expertise, trusted relationships with the nonprofit community, and experience advancing solutions to local issues in our grantmaking decisions.

When to Give

Required minimum distributions (RMDs) are mandatory distributions from your Individual Retirement Account (IRA) that need to be completed by year's end. Most IRA plan sponsors will need to be contacted by early December to ensure timely distribution, but remember: giving can happen any time of year!

How to Give

The Community Foundation is ready to answer any questions you might have on donating your RMD. Since each person’s situation is unique, we always recommend that you discuss the benefits of an RMD gift with your professional advisor before making the gift.

If you are ready to go, you can notify your IRA administrator using this Distribution Request Letter template:

==========

[Your Name]

[Your Address]

Date

[Name of IRA administrator]

[IRA Administrator Address]

RE: Request for a Qualified Charitable Distribution or Charitable Rollover from IRA

Dear IRA administrator:

Please accept this letter as my request to make a qualified charitable distribution, also known as a charitable rollover from my Individual Retirement Account #[ ______________________] as provided in The Protecting Americans from Tax Hikes Act of 2015 and Section 408(d)(8) of the Internal Revenue Code of 1986, as amended.

Please issue a check in the amount of $[___________] payable to Community Foundation Santa Cruz County and mail it to:

Community Foundation Santa Cruz County

Payable to [insert name of fund]

7807 Soquel Drive

Aptos, CA 95003

In your transmittal, please include my name and address as the donor of record in connection with the distribution and copy me.

It is my intention that this distribution qualify for exclusion from my taxable income during the [insert tax year].

If you have any questions or need to contact me, I can be reached at [insert contact information].

Thank you,

[Your Name and Email]

=======