Ways to Give
Make a gift through your IRA
Your retirement plan is likely a significant portion of your net worth. Due to special tax considerations, you could use your plan to make a current gift. An IRA charitable rollover, also called a Qualified Charitable Distribution (QCD), from an Individual Retirement Account (IRA) helps you donate funds without counting them as income.
If you are at least 70 ½, you can make a distribution of up to $100,000 to The Foundation for New Hampshire Community Colleges and the distributed amount is excluded from your gross income for federal income tax purposes. In addition, the distribution will count towards your required minimum distribution amount for the tax year.
For the distribution to count as a QCD, the trustee of your IRA must transfer the funds directly to The Foundation (the distribution cannot be made to you first).
New for 2023
On December 29, 2022, the President signed the Fiscal Year 2022 Omnibus Appropriations Bill which included a provision to create a new charitable planned gift opportunity. Beginning in 2023, you can use your IRA to fund a life income gift such as a charitable gift annuity. While there are nuances, this may be the perfect opportunity for you to create a legacy and receive income for life.
Here are the basic facts:
- You can make this once-in-a-lifetime gift election of funding a life-income gift with an IRA. This can be done in one tax year only.
- The aggregate limit of IRA-funded life-income gifts in that year is $50,000 (meaning, you can only create up to $50,000 in these gifts, in one tax year only).
- The annuitant(s) must be the donor and/or the donor’s spouse.
- All life income payments will be fully taxable as ordinary income.
- Since these count as QCDs (Qualified Charitable Distributions), any amounts distributed into life income vehicles will count toward that year’s 100k limit on QCDs.
- A direct distribution from your IRA to a life income plan counts towards your Required Minimum Distribution for that year. (Note the required beginning date has been pushed back to age 73.)
- There is no charitable deduction. But like the QCD, think of it as “the tax-free” gift — as an above-the-line deduction, whether or not you itemize.
- Both the $50,000 and $100,000 limits will be adjusted for inflation each year.
As with all charitable giving, we encourage you to seek guidance about your specific circumstances with your financial or tax advisor. The IRS also provides additional useful information about Qualified Charitable Distributions on its website.