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Important Information for IRA Gifts in December

Article Type: News, Tips & Insights

You may know, an IRA charitable rollover allows individuals ages 70 ½ and older to make a sizable gift from their individual retirement account (IRA) to charity AND receive significant tax benefits in return.

However, if you plan to make an IRA gift in December, there’s some important information you’ll want to know…

Because of the popularity of this excellent giving option, many IRA administrators have now created
checkbooks to simplify the giving process. If your administrator offers this capability, you can now make a qualified charitable distribution (QCD) to charity by writing a check from your IRA account.

IRS rules for these IRA checks vary significantly from other personal or business checks, and this creates a possible challenge.

In order for IRA checks from these checkbooks to be counted as a QCD for the current tax year, they must be delivered to AND PROCESSED by your favorite ministries by December 31. This is especially important if you expect your QCD to qualify as part of your required distribution (RMD) for 2019.

Unlike checks directly from IRA administrators, it is NOT enough that the check is postmarked or even hand-delivered by December 31.

Any IRA gifts processed after December 31 will be counted as a distribution for 2020, and you may incur a tax penalty if you have not met your RMD for 2019.

What This Means for You…

  1. Allow plenty of time when giving IRA gifts at the end-of-the-year. Remember, this is an incredibly busy season for the post office, as well as for most charitable organizations. Build in extra margin for your check to be received, processed and cashed by December 31.
  2. Alert your favorite ministry when writing an IRA check in December. Make sure they know this gift is coming from your IRA account and must be cashed by December 31.

Thank you for allowing Barnabas Foundation to be part of your commitment to generosity!

If you have any questions about how best to support your favorite ministries – including through IRA gifts – please call us at 888.448.3040 or email info@BarnabasFoundation.com.