Qualified Charitable Contribution

How to make a qualified charitable distribution (QCD) from your IRA to Maine Maritime Academy.

What is a Qualified Charitable Distribution (QCD)

A QCD is an otherwise taxable distribution from an IRA owned by an individual who is 70½ or older that is paid directly from the IRA to a qualified charity

When can I make a QCD from my IRA

You can make a QCD beginning at 70½ years old. A QCD can be particularly beneficial for donors who do not itemize and instead file the standard deduction.

Can the QCD offset an Required Minimum Distribution (RMD)?

Under current law, every IRA account holder must withdraw an RMD annually beginning at age 72. The RMD is treated as ordinary income for tax purposes. A qualified charitable distribution counts toward your required minimum distribution.

Do I receive an income tax deduction with a QCD?

You do not receive a tax deduction for a QCD from a regular IRA. However, the transfer is not recognized as taxable income. Because a QCD reduces income and is not an itemized deduction, the gift benefits even those donors who do not itemize.

Is my 401(k) eligible for making a QCD?

No. However, it may be possible to transfer or rollover funds from a non-IRA qualified retirement plan (401(k), 403(b), etc.) to an IRA. Check with your retirement plan administrator for eligibility and guidelines. Once the new IRA is established, you may then initiate an IRA QCD.

Are there limits on the gift amount?

While your IRA administrator may have a minimum for each distribution, Maine Maritime Academy has no minimums in accepting these gifts. The withdrawal may not exceed $100,000 annually per individual for all such gifts. A married couple with separate IRAs may each transfer as much as $100,000 annually.

How do I initiate an IRA QCD?

Contact your IRA administrator to request a QCD.

How do I use my check writing facility to transfer funds from my IRA to Maine Maritime Academy?

Some custodians offer check writing privileges or special forms to initiate the gift to Maine Maritime Academy. Checks payable to Maine Maritime Academy, and may be mailed to: Maine Maritime Academy, Development Office, 1 Pleasant Street, Castine, ME 04420: For tax purposes, the date of gift is the date the funds leave your IRA account (not the postmark on the envelope). It is important to allow enough time for the QCD check to clear to ensure that the funds are withdrawn during your preferred tax year.

What type of acknowledgment should I expect to receive from my IRA gift to Maine Maritime Academy?

MMA sends an acknowledgment and statement that no goods or services were received in exchange for the gift to your IRA administrator. Separately, you will receive a letter of thanks that states the gift is an IRA QCD and confirms the designation. You will receive recognition gift credit for the full amount of your gift.

How do I report my QCD?

A QCD is reported by your IRA custodian as a normal distribution on IRS Form 1099-R for any noninherited IRAs. To report a QCD on your Form 1040 tax return, you generally report the full amount of the charitable distribution on the line for IRA distributions. On the line for the taxable amount, enter zero if the full amount was a qualified charitable distribution. Enter “QCD” next to this line. You should keep the acknowledgment of the donation from MMA for your tax records. Check with your tax advisor to confirm your personal tax reporting requirements.