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How to fund a gift annuity from your IRAHow to fund a gift annuity from your IRA

 

For years, KQED supporters have asked us if they can use Qualified Charitable Distributions (QCDs) from their IRAs to fund a gift annuity with KQED. We always had to say “no” until 2023, when the IRS finally changed the rules. 

Donors age 70½ and older can now make a one-time contribution of up to $53,000 in 2024 (indexed to inflation) to fund a charitable gift annuity. Here is what you need to know:

  • You can use up to $53,000 (the 2024 limit) from your IRA to fund one or more gift annuities, at one or more charities which offer you this opportunity. Once you do so, you may not set up this kind of gift again in a later year. The amount taken from your IRA (no more than $53,000) counts toward your Required Minimum Distribution (RMD) for the year in which you make the gift.
  • For 2024, you may satisfy up to $105,000 of your RMD by making QCDs to charity. Of this $105,000, you may use up to $53,000 from your IRA to fund a gift annuity, as noted above. So, if you use $53,000 from your IRA to fund one or more QCDs in 2024, you may still make other QCDs to charity in 2024 of up to $52,000 total.
  • The QCD is not taxed, and doesn’t qualify for a charitable deduction. 
  • You must be at least age 70½ at the time you make a QCD contribution of any kind. If you use a QCD to fund a gift annuity for yourself and a spouse younger than age 70½ , the gift will still qualify so long as the payout amount is at least 5% (contact us for more information). 
  • A donor can name himself or herself and/or a spouse to receive payments.
  • All QCD CGA payments are taxed as ordinary income.
  • You can take advantage of this opportunity in only one tax year during your lifetime. For example, if you already funded a QCD from your IRA in 2023, you cannot fund a second QCD from your IRA in future years.
  • All payments from a gift annuity funded with a QCD must go directly from the IRA custodian to KQED. To ensure that the transfer happens properly, you should provide your IRA Custodian with KQED’s legal name, tax ID number (94-1241309), and legal address. It is essential to let us know that you plan to fund a gift annuity with a QCD, so that we can help you to ensure that your gift meets IRS requirements.
  • KQED’s tax I.D. number is 94-1241309.
  • Please contact KQED’s Gift Planning Department at legacy@kqed.org or 415.553.2230 for more information.

A gift annuity funded with a QCD can be an excellent way to receive guaranteed fixed income for life, help satisfy your RMD while spreading the tax due over time, and give meaningful support for KQED’s independent public media services.