Gifts Through Your IRA

At what age am I required to begin making Required Minimum Distributions (RMDs)?

• Under the SECURE Act 2.0, the age at which you must start taking RMDs increased from 72 to 73. The new RMD starting period applies to traditional IRA owners who turned age 70½ after December 31, 2019.

Does this apply to Qualified Charitable Distributions (QCDs) as well? 

• A QCD is a tax-free distribution from an IRA owned by an individual who is age 70½ or older that is paid directly from the IRA to a qualified charity. The amount of the QCD is not included in the IRA owner’s gross income, and the owner does not receive a charitable contribution deduction. However, the QCD also counts toward the owner’s required minimum distribution (RMD) for the year. The QCD can be used for all or part of the RMD.

How much can I transfer? 

• For the RMD, the annual maximum amount per individual is $100,000. Each IRA owner is allowed up to $105,000 of QCDs each year and up to $53,000 for the one-time election of a QCD to a Charitable Gift Annuity (CGA) or a Charitable Remainder Trust (CRT).

From what accounts can I make transfers? 

• Transfers must come from IRAs directly to charity. If you have retirement assets in a 401(k), 403(b), etc., you must first roll those assets into an IRA and then make the transfer from the IRA directly to charity.

Can I make a transfer to my Donor Advised Fund or supporting organization?

• No, these are not eligible.

What are the tax implications?

• Federal – As noted above, you do not recognize the transfer as income, provided it goes directly from the IRA provider to charity; you are not eligible for an income tax charitable deduction.

• State – Each state has different laws, so check with your own advisors. Some states have a state income tax and will include this transfer as income. Within those states, some will allow a charitable deduction, and others will not. Other states base their state income tax on the federal income or federal tax paid. Still, other states have no income tax at all.

Can the transfer qualify as my minimum required distribution? 

• Yes, IRA rollovers to charity count toward your minimum RMD.

Can I still make a QCD after age 70½ even if I don’t have to start RMDs until age 73? 

• Yes, absolutely!

I’m over age 73—should I consider an IRA rollover?  Yes, especially if:

• You do not itemize deductions but make charitable gifts, OR

• You are subject to the limitation on itemized deductions, OR

• You are required to take a distribution from your IRA that you just don’t need, OR

• Your charitable gifts already equal 50% of your adjusted gross income.

How can I transfer funds from my IRA to Macalester?

1. Contact your IRA plan administrator to make a gift from your IRA to Macalester.

2. Your IRA funds will be directly transferred to Macalester.

3. Please note that IRA charitable rollover gifts do not qualify for a charitable deduction.

4. Please contact us if you wish for your gift to be used for a specific purpose.

Questions? Contact Theresa Gienapp, Director of Planned Giving, at [email protected] or (651) 696-6087.