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.