Owners of traditional or Roth individual retirement plans may again distribute up to $100,000 tax-free directly to Oklahoma State University Foundation.
As you may have heard, there is a new piece of legislation, known as the SECURE Act, that became effective on January 1, 2020. This new act will impact some individuals now and others later. It is important that you are educated on the new act and know whether or not there is action for you to take. Learning and reacting to the new rules could save you and your family thousands of dollars.
The most important takeaway is that those who turned 70½ on or before December 31, 2019, have until April 1, 2020, to take a RMD. If they fail to do so it will result in a 50% penalty. Those who turned 70½ on or after January 1, 2020, now have until 72 to take a RMD.
Persons interested in taking advantage of this opportunity may contact the Office of Gift Planning at 800.622.4678 or giftplanning@OSUgiving.com with additional questions. Please ask for any of our gift planning officers who can provide you with additional information or answers to your questions.
QCD = Qualified Charitable Distribution
RMD = Required Minimum Distribution
AGI = Adjusted Gross Income
It’s the technical term for a Charitable IRA Rollover. Any distribution from a traditional or Roth IRA made directly by the IRA administrator to the Oklahoma State University Foundation (or any charitable organization) that would have been taxable if distributed to the plan participant.
No. You must have reached age 70½ by the date of the contribution. It is important to distinguish this rule from the rule that requires plan participants to begin receiving the Required Minimum Distributions (RMD) in the same year they attain age 72.
Yes. The amount that can be excluded from a plan owner’s income is limited to $100,000 per taxpayer per year. Therefore, a married couple could donate up to $200,000 provided each spouse owns at least one IRA and can each make a qualified charitable distribution of $100,000 from their plans.
Yes, in most cases. However, you may not receive any quid pro quo benefits in exchange for your contribution. Therefore funds that provide recognition benefits, or other tangible benefits, such as Posse Points, are excluded.
You, the individual/plan participant, are the donor of the QCD.
No. You do not receive a tax deduction for the charitable distribution, but the charitable distribution is not counted as part of your taxable income, either.
Advantages will vary based on individual circumstances. As always, we recommend that you consult your professional tax advisor. Non-itemizers can keep the standard deduction and make a tax-free charitable gift. Also, donors may make charitable contributions beyond the 30% or 50% AGI limit without any added tax consequences. Donors who need to manage the size of their Required Minimum Distributions can control the amount of income they take by diverting excess to charity. Donors also avoid recognizing the distribution as income and the associated “bump” into higher tax brackets that might bring a phase-out of other deductions or application of the Alternative Minimum Tax.
No. The exclusion applies to traditional or Roth IRAs only. Other types of retirement plans such as 401(k), 403(b) annuities, defined benefit and contribution plans, profit sharing plans, Keoghs and employer-sponsored SEPs and SIMPLE plans are NOT eligible. However, some of the non-eligible plans may afford the opportunity for rollover into an IRA, which would then be eligible for a QCD. You should visit with your plan administrator to explore this option.
No. In order to qualify for the exclusion, the check must be payable directly to the Oklahoma State University Foundation.
No. Currently, QCDs may not be used for income-producing gifts.
Yes. The OSU Foundation will follow the same approach as used for the payment of an existing pledge through a donor-advised fund. We will record the charitable distribution from the IRA as an outright gift and write-off the corresponding donor pledge.
Yes. The OSU Foundation will provide written acknowledgement to the donor shortly after the gift is received.
For more information, please call or email us directly.
OSU Foundation Office of Gift Planning | 400 S. Monroe | Stillwater, OK 74074
800.622.4678 | firstname.lastname@example.org