A Guide to
Qualified Charitable Distributions
Qualified Charitable Distributions (QCDs) are a tax-advantaged way for individuals who are 70½ or older to donate money directly from their Individual Retirement Accounts (IRAs) to eligible charitable organizations such as the University of Wyoming. Instead of taking a required minimum distribution (RMD) from their IRA, paying income tax on it, and then donating the after-tax amount, the account owner can instruct their IRA custodian to send funds directly to a qualified charity.
This direct transfer counts toward the individual’s RMD for the year but isn’t included in their taxable income, which lowers their adjusted gross income (AGI). This reduction in AGI can help seniors avoid higher Medicare premiums, reduce the taxation of Social Security benefits, and potentially qualify for other tax breaks that phase out at higher income levels. Additionally, with changes to tax laws that have increased the standard deduction, many donors no longer itemize deductions, making the traditional charitable tax deduction less valuable. QCDs provide tax benefits even to those taking the standard deduction.
A QCD not only helps individuals reduce their tax burden—it allows them to support those areas of UW that they care about most!
Talk to your professional advisors or contact us to discuss your options. Feel free to contact Brett Befus, Associate Vice President for Development, at (307) 766-4259 or bbefus@uwyo.edu.