Qualified Charitable Distributions
Your clients can easily support multiple nonprofits using their IRA.
If a client is 70½ or older, they can make a Qualified Charitable Distribution (QCD) from their IRA to reduce taxable income while supporting causes they care about. Up to $105,000 can be donated annually through a QCD, and married couples may be eligible for up to $210,000.
To simplify the process, your client can support multiple nonprofits on ColoradoGives.org with a single check to us. We’ll take care of the verification, distributions and reporting.
How It Works
1. Client Adds Nonprofits to Cart
Your client will visit ColoradoGives.org, select all the nonprofits they want to support, and add them to their cart. Then they’ll select ‘Donor Advised Fund (DAF), IRA, Wire’ as the payment method when checking out.
2. You Send Us One Check
After checking out, your client will receive an email with detailed instructions on how to send a check to Colorado Gives Foundation.
3. We Distribute the Funds
Once we receive the check, we will send an email when the funds have been distributed to your client’s chosen nonprofits.
Frequently Asked Questions
Beginning at age 73, IRA account holders are required to take distributions from their IRAs even if they don’t need or want the funds. They are called Required Minimum Distributions (RMDs).
These required distributions are treated as ordinary income for tax purposes. This extra income could potentially push some taxpayers into a higher tax bracket. A QCD is a great way for your clients to achieve their philanthropic goals while also reducing taxable income. QCDs can offset RMDs by allowing IRA owners to donate money to charity instead of taking it as RMD income.
Charitable donations can be made year-round using an IRA, up to a total annual amount of $105,000. Note that if your client is using an IRA checkbook, the check must be received and deposited by Colorado Gives Foundation by Dec. 31 for the QCD to count in that calendar year. If the IRA administrator is sending the check, the date the funds were withdrawn from the IRA account is considered the date the QCD was made.
Gifts made with an IRA may be eligible for additional Colorado state tax credits (i.e., enterprise zone, childcare or homeless). ColoradoGives.org makes it easy to find tax credit eligible organizations. Simply go to ColoradoGives.org and filter for Colorado state tax credits.
The nonprofit will decide the eligibility of your donation for state tax purposes and will provide the necessary state tax documents. For questions about Colorado tax credits, please reach out to the organization directly. Consult a tax advisor regarding the impact of state tax credits on charitable tax deductions.
No. Since the contribution can be excluded from gross income, a charitable contribution deduction cannot also be taken. Doing so would result in a prohibited double tax benefit. The benefit is a reduction in taxable income.
The financial institution holding your IRA funds will issue a 1099-R form, but they do not indicate which distributions qualify as QCDs. Clients must self-report QCDs on their personal tax return when filing their taxes. Colorado Gives Foundation will provide an acknowledgment email confirming receipt of the IRA QCD gift. Donors should consult their tax professional to ensure proper reporting.
Alexis Sanelli
Donor Relations Specialist
“I’m looking forward to helping you with your clients’ IRA Qualified Charitable Distributions.”
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