Unique Way to Help City Create Inclusive Playground
By Connect-Bridgeport Staff on October 22, 2022
FROM BRIDGEPORT PARKS AND RECREATION
The City of Bridgeport along with its charitable 501c3 organization Friends of Bridgeport Recreation Inc. has been working through the fundraising process to build a state-of-the-art Inclusive Playground at the Bridge Sports Complex. The highlight of this project is creating a 
unique play-space that allows all children to play and interact regardless of abilities. While the playground will be named after the Medbrook Children’s Charity organization, many corporate and private donations have been accepted and are in process.
unique play-space that allows all children to play and interact regardless of abilities. While the playground will be named after the Medbrook Children’s Charity organization, many corporate and private donations have been accepted and are in process.
During this fundraising drive, we have received one large private donation from an individual. This donation has led us to explore the possibility of interacting with individuals concerning their RMD – Required Minimum Distributions. A required minimum distribution (RMD) is the minimum amount you must withdraw from your retirement account(s) to satisfy federal tax rules. Generally, you are required to start taking withdrawals from certain tax-deferred retirement accounts (including traditional IRAs) when you reach age 72. From speaking with tax and investment professionals, we have learned that while individuals are required to make these withdrawals, the withdrawal can have negative tax implications.
One solution to this, which again was discovered by a local generous donation, is a Qualified Charitable Distribution (QCD).
A QCD is a direct transfer of funds from your IRA custodian, payable to a qualified charity. QCDs can be counted toward satisfying your required minimum distributions (RMDs) for the year, as long as certain rules are met. In addition to the benefits of giving to charity, a QCD excludes the amount donated from taxable income, which is unlike regular withdrawals from an IRA. Keeping your taxable income lower may reduce the impact to certain tax credits and deductions, including Social Security and Medicare.
Also, QCDs don't require that you itemize, which due to the recent tax law changes, means you may decide to take advantage of the higher standard deduction, but still use a QCD for charitable giving.
Can I make a QCD?
While many IRAs are eligible for QCDs—Traditional, Rollover, Inherited, SEP (inactive plans only), and SIMPLE (inactive plans only)* —there are requirements:
- You must be 70½ or older to be eligible to make a QCD.
- QCDs are limited to the amount that would otherwise be taxed as ordinary income. This excludes non-deductible contributions.
- The maximum annual amount that can qualify for a QCD is $100,000. This applies to the sum of QCDs made to one or more charities in a calendar year. (If, however, you file taxes jointly, your spouse can also make a QCD from his or her own IRA within the same tax year for up to $100,000.)
- For a QCD to count towards your current year's RMD, the funds must come out of your IRA by your RMD deadline, generally December 31.
- Contributing to an IRA may result in a reduction of the QCD amount you can deduct. (The aggregate amount of deductible IRA contributions you make to your IRA after you turn 70 1/2 will reduce the amount of the QCD that is not includible in your gross income.)
Any amount donated above your RMD does not count toward satisfying a future year's RMD.
Funds distributed directly to you, the IRA owner, and which you then give to charity do not qualify as a QCD.
Under certain circumstances, a QCD may be made from a Roth IRA. Roth IRAs are not subject to RMDs during your lifetime, and distributions are generally tax-free. Consult a tax advisor to determine if making a QCD from a Roth is appropriate for your situation.
What kind of charities qualify?
The charity must be a 501(c)(3) organization, eligible to receive tax-deductible contributions.
Some charities do not qualify for QCDs:
- Private foundations
- Supporting organizations: i.e., charities carrying out exempt purposes by supporting other exempt organizations, usually other public charities
- Donor-advised funds, which public charities manage on behalf of organizations, families, or individuals
Tax reporting
A QCD is reported as a normal distribution on IRS Form 1099-R for any non-Inherited IRAs. For Inherited IRAs or Inherited Roth IRAs, the QCD will be reported as a death distribution. Itemization is not required to make a QCD. While the QCD amount is not taxed, you may not then claim the distribution as a charitable tax deduction.
A QCD is not subject to withholding. State tax rules may vary, so for guidance, consult a tax advisor.
When making a QCD, you must receive the same type of acknowledgement of the donation that you would need to claim a deduction for a charitable contribution.
A tax advisor can help you determine if both your IRA and charity qualify for QCDs.
The Friends of Bridgeport Recreation Inc. sees this as a wonderful opportunity for community minded individuals to leave a legacy by donating through his program while also satisfying their RMD. Individuals have the option to leave their name on our donor wall at the playground and be memorialized for their giving. Again, we stress that this opportunity be discussed with your tax or investment advisor to make sure you qualify for and benefit from this opportunity.
Interested parties can contact Joe Shuttleworth, Director of Parks and Recreation at 304-842-8240 or joe@bridgeportwv.com.
It is the goal of Friends of Bridgeport Recreation to provide positive programs and activities for recreation and leisure in a manner which promotes health, wellness, community and lasting memories.
Editor's Note: Photo shows Bridgeport Parks and Recreation Director Joe Shuttleworth discussing the inclusive playground at a City Council meeting.
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