If your IRA clients have an automatic withdrawal plan set up to send funds directly to a charitable organization, they may need to take action.
Capital Group can now report eligible automatic distributions as qualified charitable distributions (QCDs) on Form 1099-R — but only when the updated certification form is on file. By completing the form, the investor is certifying that the distribution is an eligible QCD to ensure the donation is properly reported for tax purposes. For additional information on QCDs, visit Qualified charitable distributions.
Next steps:
No action is required if distributions are not being sent to a qualified charity or if the client does not wish to change their current tax reporting. If we do not receive the updated certification form, their automatic distributions will continue and will be reported as normal or death IRA distributions.
The guidelines and procedures provided in the Account Resource Center may not apply to networked accounts or accounts not directly held by American Funds. The guidelines and procedures provided also apply only to those retirement accounts or Coverdell ESAs invested in American Funds with Capital Bank and Trust Company (CB&T) as custodian. The guidelines and procedures provided in the Account Resource Center do not apply to plans held in our retirement plan solutions — PlanPremier, PlanPremier-TPA or RecordkeeperDirect. Information on the Account Resource Center may change periodically, and previously printed information may not be current. Please refer to capitalgroup.com for the most current information available.
Financial professionals should always contact their back office to determine if there are any restrictions on the use of American Funds products, tools, services, websites and literature.