What Is a Qualified Charitable Distribution (QCD)? A Tax-Free Way to Give from Your IRA

A Qualified Charitable Distribution (QCD) lets IRA owners age 70½ or older send money directly from their IRA to a qualified charity — and that amount is excluded from taxable income entirely, unlike a normal withdrawal followed by a donation.

How a QCD Works

Instead of withdrawing IRA funds yourself and then writing a check to charity, you instruct your IRA custodian to send the money directly to the charity. Because the funds never pass through your hands as taxable income, you avoid the tax hit — even if you don't itemize deductions.

Why a QCD Beats a Regular Withdrawal-Then-Donate

• A QCD isn't added to your adjusted gross income (AGI) at all — a normal withdrawal is, even if you later deduct the donation
• Lower AGI can help you avoid Medicare IRMAA surcharges and reduce how much of your Social Security is taxable
• You get the tax benefit even if you take the standard deduction, unlike a charitable deduction which requires itemizing

QCDs and Required Minimum Distributions (RMDs)

Once you're subject to RMDs, a QCD counts toward satisfying that year's required distribution. This makes it a popular strategy for retirees who don't need all of their RMD for living expenses and want to give to charity anyway.

Limits and Rules

• Annual QCD limit: $105,000 per person in 2025 (indexed for inflation)
• Must be a direct transfer from a traditional IRA to a 501(c)(3) charity — donor-advised funds and private foundations don't qualify
• You must be 70½ or older at the time of the distribution