2024 Qualified Charitable Distribution - $105,000

Are you planning to make a Qualified Charitable Distribution (QCD) in 2024?
Yes? Then read on …

A QCD allows an Individual Retirement Account (IRA) owner to make a distribution directly from their IRA to an eligible charitable organization.

With a higher Standard Deduction amount, a majority of the taxpayers are not itemizing anymore. Under these circumstances, the QCD benefits the charitably inclined taxpayers who are 70 ½ or older and have IRAs. It reduces their tax burden by allowing them to reduce their Required Minimum Distributions (RMDs) on their tax return for the amount of QCDs made in that year, resulting in a lower adjusted gross income (AGI).

Beginning in tax year 2024, the $100,000 cap on the QCD amount is indexed for inflation, under the SECURE Act 2.0. So, for 2024, the annual QCD limit is $105,000, which is $5,000 more than the prior year.

This means that an eligible taxpayer can now transfer up to $105,000 to charity, tax-free, in 2024. For a married couple, if both spouses with IRAs are age 70 ½ or over when the distributions are made, each spouse can make a QCD up to $105,000 for a total of up to $210,000 in 2024.

Pointer: For tax reporting purposes, the donor must obtain a written acknowledgement of their contribution from the charitable organization before filing their return. Such acknowledgement must state the date and amount of the contribution and indicate whether the donor received anything of value in return.

Please contact your HM&M advisor with any questions.