A Tax-Smart Way to Support Erskine
Gifts from an Individual Retirement Account (IRA) are a great way to make a difference for Erskine and receive tax benefits for yourself. The FAQs below walk you though that process. We are thankful for your generosity!
If you have any questions, please reach out to our planned giving office via email at plannedgiving@erskine.edu or by phone at 864-379-8700.
- A Qualified Charitable Distribution, commonly called a QCD, is a gift made directly from an Individual Retirement Account (IRA) to a charitable organization like Erskine College.
- For individuals who qualify—typically, those ages 71 and older—a QCD can be a convenient and tax-efficient way to use retirement assets for charitable giving.
- Money distributed from a traditional IRA to the account owner is usually counted as taxable income. When a distribution qualifies as a QCD, however, the amount given directly to charity is usually excluded from the donor’s taxable income.
- This makes a QCD particularly attractive for donors who already intend to make charitable gifts, regardless of whether they itemize their charitable gifts on their income tax returns.
- For donors who must take a Required Minimum Distribution (RMD)—usually, those ages 73 and older—a qualifying QCD can count toward satisfying all or part of that requirement.
- In some cases, that additional taxable income (that is, the RMD amount given to the College instead of paid to you) could have resulted in a higher tax bracket, which could lead to unwanted impacts on the donor’s Social Security income and Medicare benefits.
No, the principal tax benefit is that the qualifying distribution is excluded from taxable income.
Martha wants to give to Erskine and does not need the income she is required to take from her IRA. Rather than receiving the IRA distribution personally and then writing a check to the College, Martha directs her IRA custodian (a firm like Schwab, Fidelity, Vanguard, etc.) to send those funds directly to Erskine. Martha has the satisfaction of making an important gift, supporting the College’s mission, and avoids taxable income.
- Contact the financial institution that serves as custodian of your IRA and request that the charitable distribution be made directly from your IRA account to the College. Ask that your name and address are included in the transfer so Erskine can properly acknowledge your generosity.
- Be sure to follow your custodian’s procedures so your gift qualifies for QCD treatment.
- Notifying Erskine of your giving plans is always helpful so we can make preparations for receiving your gift.
Because tax rules can change and individual circumstances vary, we encourage you to consult your financial or tax advisor to discuss the strategies best suited for your situation.