Give through your IRA

• With a QCD you pay no income taxes on the withdrawn funds. The transfer from your IRA directly to the charity of your choice is a tax-smart way to make a contribution with pre-tax dollars. This may be especially appealing to donors who do not itemize deductions.
• If you don’t need the income from your IRA’s Required Minimum Distribution (RMD), a QCD lets you fulfill that obligation and avoid counting that distribution as taxable income. This can lower your adjusted gross income (AGI), which may help reduce Medicare premiums, and taxation of Social Security benefits, among other deductions or credits tied to income levels.
• As you consider how best to provide for your loved ones through your estate plans, you may find that naming Wistar as beneficiary of your IRA is the most effective way to leave money to Wistar and reduce the federal income tax burden that your children would be subject to if they were beneficiaries of the retirement asset.

There are several ways QCD gifts are transacted (depends on your IRA custodian’s policies) including:

• A check issued from your IRA custodian made out to and mailed directly to Wistar.
• An electronic transfer from your IRA custodian directly to Wistar.
• A check issued from your IRA custodian made out to Wistar but sent to you, for you to forward to Wistar.
• A self-written check you can make out to and send to Wistar, if you have an IRA checkbook.

Wistar frequently receives QCD gifts in each of these ways, but there is more you should be aware of to be a savvy QCD donor:

IRA checks don’t always indicate that it is a gift from an IRA

Checks issued from IRA custodians and self-written IRA checks sometimes reference that the gift is from an IRA but more often than not, they appear like any other personal or financial institution check and have no reference to the gift being a QCD.

It’s a good idea to let us know if your gift is coming from your IRA custodian or to include a note with your self-written IRA check, to make us aware that it is a QCD. That way, we can ensure your gift acknowledgement letter contains the appropriate tax language about your gift and follow up with you if we don’t receive a check in a timely manner.

Your QCD Is Counted on the Date the Funds Leave Your IRA

IRS rules for QCDs are different from rules for charitable deductions from personal funds e.g. a check from your checking or brokerage account.

For tax purposes, the IRS considers your QCD completed only when the funds are distributed from your IRA to Wistar, i.e. when the check clears or electronic transfer is complete not when you request the QCD, and not the date on the check or postmark on the envelope.

Because processing times vary between custodians, a QCD initiated in December may not be completed in the same tax year if the non-profit does not receive and deposit the check before the end of the year.

Don’t Risk Missing the December 31 Deadline

If you are planning for your QCD to satisfy part or all of your Required Minimum Distribution (RMD), it’s especially important that the distribution must clear your IRA by December 31.

If the transfer doesn’t fully process in time:

• Your gift, according to the IRS, may be credited to the next tax year
• You may fail to meet your RMD for the current year
• Missing your RMD can result in IRS penalties

QCD Best Practices

Even if you aren’t using the QCD to satisfy your RMD, we want to make sure you can count your QCD gift in the tax year you planned for. We strongly encourage donors to:

• Initiate QCD requests or send self-written IRA checks early (don’t wait until December!)
• Forward any IRA custodian checks mailed to you, to Wistar, promptly.
• If it is near year end, see if your IRA custodian can make an electronic transfer.
• In any event, let us know about your plans so we can ensure your gift acknowledgement has the right tax language, and we will inform you if your QCD has still not arrived.
• Keep your gift acknowledgement letter to share with your tax preparer as confirmation that your QCD was completed, and the funds should be excluded from your taxable income.
• Don’t wait until 73 (when your RMD kicks in) to start benefiting from giving through your IRA – when you’re 70 ½ you become eligible for QCDs! It’s go time!