Giving from IRA
Giving to Vestavia Hills Methodist Church from an IRA
The Consolidated Appropriations Act of 2016 finally made permanent qualified charitable distributions (QCDs) from individual retirement accounts. After years of contributing to IRAs, income tax is due on that money when you take withdrawals in retirement. Annual withdrawals from traditional retirement accounts are required beginning April 1 of the year following the calendar year in which you reach age 72 (increased from 701⁄2 in 2020). You can avoid income tax on your required withdrawal by donating your money directly to Vestavia Hills Methodist Church as a QCD. Giving to a QCD can automatically satisfy your required minimum distributions (RMDs) for the year. That’s a real advantage for a charitably minded IRA owner who doesn’t need to live on their RMDs. QCDs are allowed after you reach age 701⁄2 but will not reduce or otherwise impact future RMD amounts until distributions are required.
Those who meet the age requirement can transfer up to $100,000 per year directly to a QCD without paying income tax on the transaction. If you file a joint tax return, your spouse can also make a charitable contribution of up to $100,000, meaning couples can exclude up to $200,000 of their retirement savings from income tax if they donate it to charity. Qualified charitable contributions must be made by December 31 each year in order to exclude that amount from taxable income.
Any funds given as a QCD have already reduced your taxable income and cannot also be claimed as a tax deduction. These funds will be listed on your statement but should not be itemized as a deduction on your federal tax return. State tax laws may differ depending on the type of IRA used for the QCD. Please consult your financial advisor or tax accountant for treatment of a QCD on your state tax return.
To give from an IRA:
- You must be age 70 1⁄2 or older when the transfer is made to VHMC.
- The maximum amount you can give to charity from your IRA in one year is $100,000 ($200,000 for couples).
- Most types of IRAs are eligible, but employer-sponsored plans do not allow for QCDs. Please consult your IRA custodian or financial advisor to confirm that your IRA is eligible.
- Checks must be made payable directly to VHMC by your IRA custodian. We suggest you also have the custodian mail the check directly to VHMC. DO NOT have the check issued in your name.
- Please let us know of your contribution since your custodian may send it without including your name. We will apply it to your current year pledge or place the funds in the General Fund of the church unless you specify otherwise.
- Give the following to your IRA custodian for processing and/or questions:
Vestavia Hills Methodist Church
2061 Kentucky Avenue
Vestavia Hills, AL 35216
VHMC’s EIN number is 63-0378123