What’s aa Qualified Charitable Distribution?
If you’re over 70 and still letting Uncle Sam take more than his fair share from your IRA, it’s time to wise up. The tax code actually gives you a weapon to fight back—and most retirees don’t even know it exists. It’s called a Qualified Charitable Distribution, or QCD. And if you’re charitably inclined, it might be the best tax move you’ll ever make.
What Is a Qualified Charitable Deduction?
The Qualified Charitable Deduction (often called a QCD) allows you to send money directly from your IRA to a qualified 501(c)(3) organization—without paying taxes on it. Even better, the amount you send counts toward your RMD for the year.
It’s the perfect tool for high-income retirees who don’t want their charitable giving to get swallowed by the standard deduction or who want to avoid unnecessary tax exposure.
How It Works
Let’s say you’re 75 and your RMD for the year is $25,000.
You want to give $5,000 to your church. Instead of withdrawing the full $25k and then donating it (which would count the entire amount as taxable income), you direct your IRA custodian to send $5,000 directly to your church as a Qualified Charitable Deduction.
Now, you only need to withdraw the remaining $20,000. That $5,000 you gave? It’s not taxed, even though it satisfied part of your RMD.
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Why the Qualified Charitable Deduction Matters
Reduces your taxable income
Keeps your Medicare premiums lower
Avoids tax on Social Security benefits
Helps you stay in a lower tax bracket
Works with the standard deduction (no need to itemize)
Supports causes you care about
Rules for Using the Qualified Charitable Deduction
To make a Qualified Charitable Deduction work for you, keep these rules in mind:
You must be age 70½ or older.
You can give up to $108,000 in 2025 through a QCD. Married couples can each give $108,000 from their own IRAs.
The QCD must go directly to a 501(c)(3)—not a donor-advised fund or private foundation.
You can’t receive anything in return (like a dinner or gift), or the deduction is disqualified.
You must get written acknowledgment from the charity and report the QCD properly on your tax return.
Bonus Strategy
Want to avoid getting taxed on your RMDs altogether? Always make your Qualified Charitable Deduction before taking any other withdrawals. The IRS applies your first IRA withdrawals toward your RMD, so don’t waste that on taxable income.
Final Take
If you’re over 70 and making charitable contributions anyway, not using the Qualified Charitable Deduction is leaving free money on the table. It’s a clean, simple way to redirect taxes to your church or favorite cause—and keep the IRS out of your pocket.