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you can still make a QCD in 2020!by Jim Murphy, CFREHave all the updates to the tax laws and recent acts of Congress confused you? You are not alone. In late 2019, the SECURE act changed the age for the Required Minimum Distribution (RMD) from retirement accounts, and the CARES Act, passed in March 2020 in response to the Covid-19 crisis, made other adaptations for this year alone.In addition to other changes, in December 2019 the SECURE act updated the age when you are required to take a withdrawal from your tax-deferred account from 70 ? to 72 years old, allowing many people to leave their retirement nest egg untouched for longer. However, if you are 70 ? or older and have a Traditional IRA, you can still make a contribution to your parish or favorite Episcopal charity directly from your Traditional IRA, up to $100,000 a year, simply by instructing the plan administrator to make the transfer directly to the charity as a Qualified Charitable Distribution (QCD). As in past years, your QCD will not be taxed; unlike other years though, in 2020, it will not also count towards your RMD. The CARES Act allows one to skip any Required Minimum Distribution (RMD) from defined-contribution retirement plans (like 401(k), 403(b) plan or IRA) in 2020, which will benefit those who do not want make withdrawals in this volatile year. This includes anyone who turned age 70 1/2 in 2019 and would have had to take the first RMD by April 1, 2020. Although people are still encouraged to consider making QCDs out of their Traditional IRA to their parish and various charities, since the CARES Act did not require the taking of RMDs in 2020, it will not count for that this year. However, there were additional charitable incentives from the CARES Act, such as a $300 charitable deduction even if you don’t itemize. For an informative ECF article click here. Unfortunately, the untaxed QCD still cannot be used to fund or add to a Donor-Advised Fund or Life Income Gift, like a Charitable Gift Annuity. Don’t forget friends, before finalizing any gifts or distributions, please consult with appropriate advisors. ................
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