From the Blog: Pledge to Make a QCD

When the qualified charitable distribution (QCD) from Individual Retirement Accounts (IRA) was first introduced in 2006, the timing for colleges and universities that push for 50th reunion gifts could not have been better. The new outright gift was available to donors who were age 70 ½ or older, which cleanly aligned with the age of many 50th reunion alumni.

Over time, the age at which a donor could make a QCD gift diverged from the age at which they must begin taking withdrawals from their IRA. Colleges and universities that had become comfortable with marketing the multiple benefits of QCD gifts to their 50th Reunion alumni found themselves with a challenge. Would donors still be interested in this gift type if they couldn’t enjoy the benefit of applying the tax-free withdrawal towards an RMD they did not yet have?

Read the blog post . . .

PGM Desktop Updated with 2025 Federal Tax Schedules

On January 6, we released Planned Giving Manager 7.7B (PGM 7.7B). This update includes the federal tax schedules for 2025. The tax schedules are adjusted annually for inflation and include federal gift, estate, and generation-skipping tax exemption amounts, as well as federal income tax schedules. You can find all of the indexed tax tables for 2025 that are important to gift planning here.

If you have any questions about the PGM 7.7B update or how to install it, please contact us at support@pgcalc.com or call Client Services at 888-474-2252.

We do not plan to update PGM desktop again. Going forward, we will be focused entirely on enhancing PGM Anywhere. PGM Anywhere is available to all PGM clients for no additional charge. If you are still using PGM desktop instead of PGM Anywhere, we strongly encourage you to make the switch to PGM Anywhere. Sign up today! There is nothing to install, and you can access PGM Anywhere from any computer, tablet, or smart phone.

2025 Webinars Finalized, 2025 Software Training Registration Open

We have finalized our webinar schedule for 2025. Learn more about each webinar and register here. Register for the whole series and save 25%! This year’s dates, topics, and presenters are listed below.

Also consider attending a PGM Anywhere and GiftWrap training session this year. In addition to these sessions, we will be offering specialized classes that include Lead Trust School and Planned Giving by the Numbers. To minimize your cost and maximize your convenience, we will deliver most of our training sessions online. Learn more here.

Hooray, It’s 1099-R Season Again!

We wanted to remind everyone that January is the month during which federal Form 1099-Rs must be sent to all persons who received payments from charitable gift annuities in the previous calendar year. If you are not involved in the gift administration side of planned giving, you likely are not involved in the production and mailing of the tax forms. But everyone should be aware that the forms must be sent to the annuitants by U.S. Mail by January 31 at the latest.

And the fun isn’t over on February 1. After the forms have been mailed, charities offering CGAs will receive the inevitable return-to-sender items for incorrect addresses. There will also be the occasional notification that an annuitant has passed away. But there is plenty of time – most charities have until March 31 to submit the 1099-R information to the IRS. That part of the process should not be rushed, so as to allow for the corrections that will need to be made in the interim.

If you are a user of PG Calc’s GiftWrap software and would like to watch the free recording of our session on how to complete your 1099-Rs, please contact our Client Services team at support@pgcalc.com or 888-474-2252.

Remember: PIF and CRT K-1s Are NOT Due in January

Most everyone knows that Form 1099-Rs for charitable gift annuities are due in January – they must be sent by January 31 of each year (see the previous article). But some gift annuity donors are also donors of charitable remainder trusts (CRTs) or participants of pooled income funds (PIFs). It is worth noting that the deadline for sending CRT and PIF Form K-1s is NOT January 31. The deadline is actually the filing deadline for the completed tax returns of the CRTs and PIFs. That filing deadline is April 15 or the first business day thereafter.

Unlike Form 1099-R, which is unique and specific to each gift annuity, the CRT and PIF Form K-1s are actually part of the overall tax returns for the associated trusts. They cannot be produced until the tax returns themselves are essentially completed. While April 15 is technically the deadline, most CRT and PIF administrators try to send out the K-1s much earlier. We generally see the majority of the K-1s going out sometime in March, but it may be helpful to remind donors of the actual filing deadline.

Deemed or Doomed? QCD from a Deemed IRA

Of late, some commentators have suggested that donors should be able to make Qualified Charitable Distributions (QCD) from a “deemed IRA.”  Sometimes referred to as a “side-car IRA,” deemed IRAs have been available for more than 20 years and allow an employer to offer employees the ability to keep IRA assets as a separate IRA account within the employer’s retirement plan, including 401(k)s, 403(b)s, and pension plans.

Although the charity has no obligation to inquire as to the source of a QCD contribution, and while there may be a strong argument that a donor ought to be able make a QCD from a deemed IRA, the final determination as to whether the QCD is allowable is a matter between the donor/taxpayer and the IRS. As always, charities should urge donors to consult their own tax advisors before assuming that the IRS would agree with Shakespeare when he wrote, “A rose by any other name would smell as sweet.”

For donors eager to pursue a QCD outright or CGA gift from either a 401(k) or 403(b), the safest path is to roll their retirement plan into a traditional IRA, and then make the gift.

Contact Client Services at 888-474-2252 or support@pgcalc.com if you have questions.

It Is Expected That Charities Can Offer ACGA Rates to New York Donors Through at Least June 2025

As of today, New York has not yet posted the single maximum rates that apply to gift annuities issued to New York residents from January 1, 2025 through June 30, 2025. It is expected that those rates will continue to be higher than their corresponding ACGA rates at all ages, not only for one-life immediate annuities, but for two-life immediate and one-life and two-life deferred annuities.

We will provide an update on the New York rates in a blog post once they are posted. For those interested, the NY maximum rates post here:
www.dfs.ny.gov/apps_and_licensing/life_insurers/Charitable-Reserves 
(Present Value of Immediate Annuities and Maximum Incomes per $1000 Gift Allowed by Section 1110 for Issues of 1/23/24+)