What is a qualified charitable distribution (QCD)?
The “IRA charitable rollover” provides an annual exclusion from gross income up to $100,000 for qualified charitable distributions (QCDs) from an IRA.
The donor must request a QCD from their plan administrator and it must be sent directly to Thrivent Charitable.
- Please notify our team when the distribution request has been made, so we can watch for check and ensure it’s applied correctly.
- We will use the gift to pay the premium to Thrivent and send the donor a gift acknowledgement. (The QCD is not tax-deductible, since the donor doesn’t recognize income on the distribution).
- Thrivent Charitable drafts a Fund Agreement based on charitable requests made by the donor and sends it to the donor for signing. Their financial professional also receives a copy.
- The signed Fund Agreement is returned to Thrivent Charitable. We countersign and send a copy.
Note: Donors can also make a gift of QCDs to one of our Collaborative Funds or create/contribute to an endowment fund for their church or other faith-based public charity.
- The amount directed to charity is not included in the donor's adjusted gross income (AGI).
- Giving these assets to charity, versus taking required minimum distributions (RMDs) into income, may enable donors to avoid certain disadvantages that can come with a higher AGI, such as higher Medicare premiums, self-employment or Social Security taxes, etc.
- There is no income tax to the donor on the IRA distributions to the charity, and charities pay no income tax on the distributions they receive.
- As QCDs are not subject to percentage limitations on charitable deductions, this an ideal strategy for donors who have maxed out charitable deductions or do not itemize deductions.
QCDs can be made directly to a public charity that is not a supporting organization. Contributions to donor-advised funds and private foundations, except in narrow circumstances, do not qualify for tax-free IRA rollover contributions. Additionally, tax-free transfers or distributions cannot be used to establish a charitable gift annuity or charitable remainder trust.
The donor may still use the rollover to make gifts up to $100,000 from an IRA without using it to satisfy RMDs.
Thrivent Charitable will support you with a full range of charitable products and services, and you'll be compensated for your efforts by Thrivent or American Funds.
- Only IRA distributions qualify – no SEPs, SIMPLE plans, 403(b), 401(k), profit-sharing plans, or pension plans.
- Distributions must be made directly to charity from the plan administrator.
- The IRA owner must be at least 70-1/2 on the date of distribution.
- There's a limit of $100,000 per individual per year.
- Because the distribution is not counted in the donor’s AGI, there is no charitable deduction on federal income tax returns.
- State income tax treatment may vary from federal law.
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Our team of charitable gift planners utilizes deep charitable expertise to expand your clients' options and help meet their giving goals. Our collaborative approach will allow you to maintain your current client relationships while we provide the most relevant advice that aligns with your clients' financial priorities.
From left to right: Cindy Aegerter, Ben Boline, Nikki Johnson, Greg Shamey