To set up a Qualified Charitable Distribution (QCD) from your IRA to a qualifying charity, follow these detailed steps and ensure you meet all IRS guidelines, limitations, and restrictions:

Steps to Set Up a QCD

1. Verify Eligibility:

   • Age Requirement: Ensure you are at least 70½ years old at the time of the distribution.
   • IRA Type: Confirm that the distribution is from a traditional IRA or a rollover IRA. QCDs cannot be made from SEP or SIMPLE IRAs if they are ongoing (i.e., if an employer contribution is made for the plan year ending with or within your tax year).

2. Select a Qualifying Charity:

   • The charity must be a 501(c)(3) organization eligible to receive tax-deductible contributions. Donor-advised funds and private foundations do not qualify for QCDs.

3. Determine the Amount:

   • The maximum annual exclusion for QCDs is $100,000 per taxpayer. If you are married and both you and your spouse are eligible, each can contribute up to $100,000.
   • Starting in 2024, the $100,000 limit will be indexed for inflation.

4. Direct Transfer Requirement:

   • The distribution must be made directly by the IRA trustee to the charity. You cannot withdraw the funds and then donate them.

5. Coordinate with Your IRA Custodian:

   • Contact your IRA custodian to arrange the QCD. Provide them with the charity’s details, including the charity’s name, address, and tax identification number.
   • Ensure the custodian understands that the distribution is a QCD and that it should be sent directly to the charity.

6. Obtain a Receipt:

   • Obtain a receipt from the charity acknowledging the donation. The receipt should be the same type as needed if the contribution were deductible.

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Clergy Financial Resources
Tax I Payroll I Bookkeeping I HR | Consulting
11214 86th Avenue N.
Maple Grove, MN 55369

Tel: (888) 421.0101
Fax: (888) 876.5101

Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.

This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.

For more information or if you need additional assistance, please use the contact information below.

Clergy Financial Resources
11214 86th Avenue N.
Maple Grove, MN 55369

Tel: (888) 421-0101 
Fax: (888) 876-5101
Email: clientservices@clergyfinancial.com