Qualified Charitable Distribution (QCD)

A QCD allows individuals age 70½ or older to transfer up to $111,000 per year directly from their IRA to a qualified non-profit or charity. Because the funds go straight from your IRA custodian to the charity, the money is never treated as taxable income to you.

Key Benefits

• Fulfills RMDs: If you have reached the age where you are required to take Required Minimum Distributions (RMDs), a QCD counts toward satisfying your annual IRS withdrawal requirements. [1, 2]
• Lowers Adjusted Gross Income (AGI): By keeping this money off your tax return, you can reduce your overall AGI, which can prevent you from being pushed into a higher tax bracket or triggering Medicare premium surcharges. [1, 2]
• Standard Deduction Friendly: You do not need to itemize your taxes to use a QCD, though you cannot double-dip by claiming an additional charitable deduction on your tax return.

Important Rules to Know

• Age Requirement: You must be at least 70½ years old on the day the distribution is made. [1, 2]
• Eligible Accounts: This only applies to IRAs (like Traditional, SEP, or SIMPLE IRAs). It does not apply to active workplace retirement accounts like 401(k)s or 403(b)s. You may, however, be able to roll funds from a 401(k) into an IRA to make them eligible. [1]
• Direct Transfer: The money must be transferred directly by your IRA trustee to the charity. If you withdraw the money into your personal checking account first, it will count as a taxable distribution. [1, 2, 3]

If you'd like to read up on the official guidelines or get started with a transfer, you can review the IRS Qualified Charitable Distributions page or learn more from the Fidelity IRA Charitable Distributions guide.[1, 2, 3, 4]

Disclaimer: It is always highly recommended to speak with a tax professional or financial advisor before making distributions to ensure they fit your specific financial picture.