Since 1967 the Foundation has been a financial resource for United Methodist churches, individuals, and related agencies and institutions throughout Missouri. We hope this site is another resource that helps YOU make a positive difference.
On January 2, 2013 new federal law became effective which renews the opportunity to direct gifts to charity directly from individual retirement accounts (IRAs) without including the distribution as personal income. The law allows certain gifts made in 2012 to qualify retroactively and for gifts made in January 2013 to qualify as 2012 distributions. All qualified charitable distributions (QCD) made between February 1 and December 31 of 2013 will be treated as 2013 distributions. (The new law will expire 12/31/2013 unless renewed. The law has been renewed each year since it was first enacted in 2006.)
- You must be at least age 70 ½ when the gift distribution is made.
- The law applies only to IRA accounts (either Traditional or Roth). Other plans such as 401(k) or 403(b) plans do not qualify.
- The gift distribution(s) must be made directly from your IRA administrator to your church, UM organization or other favorite charity. (There is an exception for distributions received by the taxpayer in December 2012. Any portion of such a distribution can be forwarded to a charity by the taxpayer as a cash gift before February 1, 2013 and still be treated as a QCD for 2012.)
- Total IRA gifts are limited to $100,000 per taxpayer per year. If married and each spouse has an IRA, then each may gift up to $100,000 per year.
- The new law applies only to gifts made in 2012 and 2013.
- The gift counts toward your IRA required minimum annual distribution (RMD).
- The gift distribution is excluded from your income for both federal and Missouri state income tax purposes. Although you cannot deduct the gift on your income tax return, the distribution is not reported as income so there is no adverse income tax effect. (Effectively, it is similar to having a 100% deduction on the gift.)
- Under this law, IRA gift distributions may not be used to contribute to a private foundation, donor advised fund, supporting organization, charitable gift annuity or charitable remainder trust.
- Special 2012 Extensions: Technically, this legislation reauthorizes this gift option retroactively to January 1, 2012. Therefore, if you made a QCD at any time in 2012 directly from your IRA in keeping with the legal requirements, it should qualify retroactively. In addition, any non-qualified distribution received by the taxpayer in December of 2012 may be deemed a QCD to the extent any portion of the distribution is forwarded by the taxpayer to a charity before February 1, 2013. Furthermore, any new QCD made in January 2013 will be deemed a 2012 QCD.
This legislation is effective immediately. Individuals will want to discuss this with their own professional advisors and IRA administrators.
To share this information with your congregation, we suggest mailing or emailing the following resources to all members age 70 and up. Click on the highlighted links to view or download the material:
- February 1, 2013 through December 31, 2013: Send out the following information…
A personal call or visit with particular individuals who might be interested is strongly recommended.
Churches must provide a specific QCD acknowledgement letter to the donor for IRA gift distributions to ensure that the gift qualifies and the donor has the necessary record on file:
The legislation is called The American Taxpayer Relief Act of 2012. Here is a link to the full text.
There are a number of provisions in the law which relate to income, capital gain, and estate taxes. Here is a summary description.
The gift provisions relating to 2012 QCDs are a bit confusing. For a discussion of some practical examples of gifts that do or do not qualify, CLICK HERE.