I inherited my mother’s IRA and I’m required to begin taking required minimum distributions (RMDs) this year. Can I have the withdrawals transferred to a charity and not report them as income?
Taxpayers are allowed to donate up to $100,000 ($200,000 for a couple) of RMDs to charity in any year. These are Qualified Charitable Deductions (QCD) but certain rules do apply.
- While the amount of the QCD is not considered taxable income, the payments to charity are not deductible contributions.
- The transfer must be made directly from the IRA to the charity before the RMD deadline for the year (usually December 31).
- You must be 70 ½ or older.
- The charity must be a qualified charity. QCDs are not allowed to Donor Advised Funds, Private Foundations, split interest charitable trusts, or supporting organizations.
So, if you are 70 ½ or older and your charity qualifies, you can use your IRA RMD for a QCD!