Qualified IRA Distributions

Charitable Gifts From Your IRA

Make a gift to Princeton HealthCare System Foundation through your IRA by making a Qualified Charitable Distribution, previously called the IRA Charitable Rollover. The IRS now permanently recognizes this opportunity to give to charity from your IRA and avoid taxes on IRA distributions. Note: Donors will not receive a tax deduction for their gifts; instead, the gift from their IRA is considered a Qualified Charitable Distribution (QCD) and free from income tax while still qualifying towards your Required Minimum Distribution as long as the gift (QCD) is directly transferred to charity.*

Who qualifies?                      Anyone with an IRA over the age of 70 ½

How much can I transfer?   Up to $100,000.00 each year

Why would I do this?           To avoid paying taxes on elected gift amount that also counts towards or satisfies your Required Minimum Distribution (RMD)

This is an excellent, tax-efficient giving strategy for anyone:

  1. Who makes charitable gifts but does not itemize their tax deductions
  2. Who is subject to the limitation on itemized deductions
  3. Who is required to take a distribution from their IRA that they don't currently need
  4. Whose charitable gifts already equal or exceed 50% of their adjusted gross income

How do I initiate my Qualified Charitable Distribution?

  1. Contact your IRA Plan Provider or Financial Advisor and inform them that you would like to make a Qualified Charitable Distribution from you IRA. See sample letter below.
  2. Tell them how much you would like to distribute as your gift
  3. Request that the distribution (QCD) be directly assigned to Princeton HealthCare System Foundation. Your provider will then send us a check made payable to:

Princeton HealthCare System Foundation
3626 US Route One Princeton, NJ 08540
EIN: 22-2225911

  1. Notify us of your gift via phone 609.252.8709 or email jdressler@princetonhcs.org, so that we can make sure it is applied correctly.

*For an IRA distribution to qualify as a QCD, your gift must be directly transferred to charity. What that means is, the distribution check must be made payable to the actual charity. At no time, may you (the owner of the IRA) or any other persons be in receipt of the funds; as in, if you were to make a regular distribution from your IRA to yourself, the amount you distributed will not qualify as a QCD.

Download & Customize IRA Plan Provider Sample Letter     

                    

Qualified Charitable Distributions (IRA Charitable Rollover) FAQ

  1. From what accounts can I make transfers? 

IMPORTANT: Transfers must come from IRAs directly to charity. The distribution check must be made directly to Princeton HealthCare System Foundation. If you have retirement assets in a 401(k), 403(b), etc., you must first roll those assets into an IRA; then, you can make the transfer from the IRA directly to charity.

  1. Do I need to make a gift that satisfies my entire RMD?

No, you can make a gift of any size; it can be smaller or bigger than your Required Minimum Distribution.

  1. Can I use the transfers to fund life-income gifts like charitable remainder trusts or charitable gift annuities? 

No, these are not eligible.

  1. Can I make a transfer to my donor advised fund or supporting organization? 

No, these are not eligible.

  1. What are the tax implications?

These are some general implications but we always suggest consulting your tax advisor when giving:

  • Federal - 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 financial and/or tax 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.

Still have questions?
Jonathan Dressler
Associate Director of Planned and Major Gifts
609.252.8709
jdressler@princetonhcs.org