Q&A: How Should We Handle a Retirement Account Donation?

Our church received a check made directly from a member’s retirement account for church general operation needs. Should our church issue a tax-deductible contribution receipt to the donor or just give the acknowledgement for receiving the check?

This is a fairly common occurrence for distributions made from individual retirement accounts (IRAs). It is known as a qualified charitable distribution (QCD). This special provision is a great way for individuals with IRAs to contribute to the church or other charities. Reminding your older donors about this option for donating can help them not only express their generosity but also allow them to reach required minimum distribution (RMD) amounts they may need to meet annually.

Here’s how a QCD works. Individuals over the age of 70½ are able to direct their IRA custodian to make a distribution directly to a church or qualifying ...