In an era of rising required minimum distributions (RMDs) and complex tax rules, savvy retirees have a powerful tool at their disposal: the Qualified Charitable Distribution (QCD). This provision lets you donate directly from your Individual Retirement Account (IRA) to charity, tax-free, while also satisfying your RMD requirements. There is no income tax on the gift, no need to itemize deductions, and your favorite causes get the full amount. As of tax year 2025, with the annual limit bumped up to $108,000 per person, QCDs are more generous than ever.
Whether you’re a philanthropist at heart or just looking to minimize taxes, let’s break down everything you need to know about QCDs.
What Is a Qualified Charitable Distribution?
A QCD is a direct transfer from your IRA custodian (like Fidelity or Schwab) straight to a qualified charity. It’s not a withdrawal you receive and then donate, that would be taxable.
Instead:
- Your IRA trustee writes the check payable to the charity, or you can be issued a checkbook on your IRA with many custodians.
- The amount is excluded from your gross income.
- It counts fully toward your annual RMD (now starting at age 73 or 75 depending on your birth year).
QCDs are available even before your RMD age, as long as you’re 70½ or older.
Who Qualifies for a QCD?
To make a QCD:
- You must be age 70½ or older at the time of the distribution (with no upper age limit).
- It must come from a traditional IRA/rollover IRA, not from an ongoing SEP/SIMPLE IRAs, Roth IRAs, 401(k)s, or other plans.
- Married couples: Each spouse gets their own $108,000 limit if both qualify and have separate IRAs (up to $216,000 combined).
Additionally, QCDs cannot go to Donor-Advised Funds (DAFs), as they don’t qualify as direct public charities under current IRS rules.
How Much Can You Donate?
- 2025 Limit: $108,000 per person (indexed annually for inflation; was $105,000 in 2024).
- Multiple Gifts: You can split the total among multiple charities, as long as the combined total doesn’t exceed $108,000.
- Excess: Any amount over the limit is taxable like a regular distribution.
Bonus Provision (SECURE 2.0): A one-time lifetime QCD up to $54,000 in 2025 can fund a charitable gift annuity or remainder trust, which can be used in cases of advanced planning.
Step-by-Step: How to Make a QCD
- Contact Your IRA Custodian (Schwab, Vanguard, Fidelity, etc.) by no later than mid-December for year-end gifts.
- Request a QCD Form or provide written instructions for the custodian to send the distribution to the named charity. Alternatively, enroll in the IRA check-writing feature and make checks payable directly to the charities.
- Get acknowledgment from the charity confirming receipt of the funds.
- Track for taxes: Your custodian will report the distribution on Form 1099-R.
- File Your Return:
| Form Line | What to Enter |
| 1040 Line 4a | Full QCD Amount |
| 1040 Line 4b | $0 + Write “QCD” |
Deadline: December 31 for the tax year.
Common Pitfalls to Avoid
- Don’t Touch the Money: Indirect gifts are taxable.
- Verify the charity: Use the IRS Exempt Organizations Select Check tool.
- State taxes: Most states follow federal rules but check your state’s treatment.
- Post-70½ IRA contributions: These can reduce your QCD limit (see the IRS worksheet for details).
Give Smarter & Save More
In 2025, with a limit of $108,000 most people can satisfy their entire required minimum distribution with the QCD if they are inclined to give and don’t need the income from their minimum distribution.
One important note: if you use the IRA check-writing feature (often the easiest method), make sure the charity cashes the check before year-end. The deduction is based on when the check is cashed, not when it was written. For that reason, it’s best not to wait until late December to mail your charitable checks.
About the Author
Joseph M. Favorito, CFP® is a Certified Financial Planner® as well as the founder and managing partner at Landmark Wealth Management, LLC, a fee-only SEC registered investment advisory firm. He specializes in helping individuals and families develop comprehensive financial strategies to achieve their long-term goals.