Qualified Charitable Distribution (QCD)

Use a Qualified Charitable Distribution (QCD) from your IRA to give more for less

(Information on funding a charitable gift annuity or charitable remainder unitrust with a QCD can be found here.)

Gift Parameters

• If you are at age 70½ or older, and are the owner of a Traditional IRA (or inherited Traditional IRA), you can make tax-free IRA contributions directly to qualified public charities, such as Williams.
• Each age-eligible IRA owner can transfer up to $108,000 tax-free per tax year.
• If you have a Required Minimum Distribution (RMD), your gift will count towards it. As of January 1, 2023, RMDs typically begin at age 73 (for non-inherited IRAs). At any time during the year you turn 73, you can satisfy your RMD with a Qualified Charitable Distribution (QCD) .
• The check must be made payable directly to Williams College.

Advantages

• The transfer process is quick and requires minimal paperwork.
• You can count your gift towards that year’s RMD.
• You can make a tax-free QCD beginning at age 70½, whether or not you have an RMD for that year.
• Your distribution is not recognized as income on your federal income tax return, therefore there is no federal income tax charitable deduction.
• Some donors save on state income taxes.
• Donors who do not itemize their federal deductions will most likely save taxes.
• Keeping your IRA distribution out of your adjusted gross income (AGI) may save you taxes in certain situations.

Some donors with high AGIs can also save when:

1. Subject to alternative minimum tax (AMT), and/or
2. Subject to 3.8% healthcare surtax on investment income.

Some donors with low AGIs can also save on:

1. Social Security taxes and/or
2. Medicare premiums.

Cautions

• Employer-sponsored retirement plans, such as SEP IRAs, SIMPLE IRAs, 401(k)s, and 403(b)s are generally not eligible for the IRA Charitable Rollover.
• While the IRS permits QCD gifts from Roth IRAs, using a ROTH IRA eliminates many of the tax advantages of the charitable distribution. Consult you financial or tax adviser for advice.
• Most (but not all) states exclude QCD gifts from income for state and local tax purposes.
• If you are counting your QCD toward your RMD, make sure you pay close attention to RMD timing rules and work closely with your IRA administrator to avoid penalties associated with late withdrawals.
• The 2020 SECURE Act changed the distribution rules of newly inherited retirement funds, replacing it with a 10-year rule whereby all assets must be withdrawn (beneficiaries not affected – spouse, disabled, chronically ill, individual less than 10 years younger than decedent, minor children until age of majority). Please see your advisor to discuss your personal finances and planning.

Quick Tips:

Legal Name: President and Trustees of Williams College
Williams Federal Tax ID: 04-2104847

For more information on how to give via a QCD, please click "show more details" below.