What is a Qualified Charitable Distribution?
- Individuals age 70.5 and older may transfer up to $111,000 per year from their IRA* to a qualified charity without recognizing the distribution as taxable income
- IRA owners aged 73 and older may utilize this strategy to satisfy annual Required Minimum Distributions (RMDs)
* Plans that qualify for QCDs: Traditional IRAs, inherited IRAs, inactive SEP and inactive Simple Plans
Action Steps: How to make a QCD?
- A QCD must be made between institutions; the IRA owner notifies their IRA custodian who then issues a check in the specified amount payable to your selected charity (or charities)
- Individuals may distribute/transfer up to $111,000 from the IRA to charity per year; if the distribution is to count towards the IRA owner’s RMD, this transfer must be made before the December 31 RMD deadline
- Careful: Some charitable entities do not qualify as charitable organizations under this strategy including donor advised funds, private foundations and supporting organizations
Why make a QCD?
- As of age 73, IRA owners must begin to take annual RMDs which could increase income and taxes
- A QCD can satisfy the RMD requirement while helping a charity and lowering taxes
- A QCD is not a tax deduction but rather an exclusion from your taxable income; this reduces your taxable income and may thus lower your tax burden (see below illustration; focus here on federal taxes only, pre state taxes and FICA)
Supporting Information
Last Reviewed: 11/24/2025
Key Sources
- Internal Revenue Code Sections 62, 63, 170, 408, 1411
- Notice 2007-7, 2007-5 I.R.B. 395, IR 2024-289
- IRS Notice 2025-67
Further Reading
