IRA QCDs – Still a Dependable Charitable Option in Today’s Topsy-Turvy World
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law on March 27, 2020. While the impact of the $2.2 trillion response bill is far reaching, some provisions relate directly to your IRA accounts. Here are those key IRA-related provisions:
Required minimum distributions (RMDs) are waived for IRAs, including inherited IRAs, and other qualified retirement plans such as 401(k) and 403(b) plans. This is only effective in 2020. Of note for 2021, The SECURE Act signed into law in December 2019 increased the RMD age from 70½ to 72. But what hasn’t changed is that IRA Qualified Charitable Distributions or “QCDs” can still be made - QCDs are still an option for 2020 even though RMDs have been suspended.
The key requirements to make a QCD from your IRA remain the same, and are as follows:
- You must be at least age 70½ at the time the distribution is made to Berkeley
- Distribution must be made directly from your IRA custodian to Berkeley
- Gift cannot exceed $100,000 per donor per year
- Goods or services cannot be received in exchange for the IRA gift
- Your pledge commitments can be paid with an IRA QCD
To assist you in this opportunity, Download This Sample Letter of Instruction that can be filled out and sent to your IRA custodian. As always, we encourage you to consult with your tax and financial advisors to see what charitable gift options make the most sense for you. Please note that your IRA custodian’s process may be completely online. If that is the case and there is insufficient space to type in your designated purpose, we suggest that you simply type in the UC Berkeley Foundation and then work with OGP to complete a separate letter of instruction using the above link.
NOTE: If you designate Berkeley as a beneficiary of your IRA or other retirement assets upon your death, neither you, your heirs, nor your estate will pay income taxes on the distribution of these assets.