Q&A: How Should We Handle a Retirement Account Donation?
Q&A: How Should We Handle a Retirement Account Donation?
Why an acknowledgment letter rather than a tax-deductible receipt is the way to go.

Update: A provision in the SECURE Act, passed late in 2019, increases the age when required mininum distributions must be made from age 70½ to age 72, For more on this and five other provisions, seeSix Provisions from the SECURE Act Offer Greater Incentives to Save For Retirement” by attorney Richard Hammar.

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 distribution of IRAs. It is known as a qualified charitable distribution (QCD).

Individuals over 70½ are able to direct their IRA custodian to make a distribution directly to a church or charity. Churches and donors must understand that there would be no benefit to having the IRA custodian send the donation if the individual is below 70½. This is a special provision related to the required minimum distributions that must be made once the IRA owner turns 70½.

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Posted: December 2, 2019
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