Qualified Charitable Distributions (QCDs) Explained
💼 What Is a QCD?
A Qualified Charitable Distribution (QCD) allows individuals age 70½ and older to donate directly from their IRA to a qualified charity. The donation counts toward your Required Minimum Distribution (RMD) but is excluded from your taxable income.
✅ Key Benefits of QCDs
Satisfies all or part of your RMD
Lowers taxable income, potentially reducing tax brackets and IRMAA premiums
Allows giving even if you don’t itemize deductions
Can help manage exposure to Social Security taxation
📆 When Can You Use a QCD?
Starting at age 70½, even if you're not yet taking RMDs
Annually, up to $100,000 per person (indexed for inflation starting in 2024)
Must go directly from IRA custodian to the charity
📃 Requirements to Qualify
Must be age 70½ or older at the time of distribution
Must be made from a Traditional IRA (not from a 401(k) or Roth IRA)
Charity must be a qualified 501(c)(3) organization
Cannot go to donor-advised funds or private foundations
👀 Watch-Outs
QCDs do not also count as a charitable deduction—it’s either/or
If you already took your RMD for the year, a later QCD won’t offset it
Coordinate with your advisor or tax preparer to report correctly on Form 1099-R and tax return
🌟 Pro Tip:
Use QCDs early in the year to satisfy your RMD and avoid accidental over-withdrawals.
This resource is for educational purposes only and does not constitute tax or financial advice. Please consult a qualified professional before making financial decisions.