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 excludes from your gross income.
- It counts fully toward your annual RMD (now starting at age 73 or 75).
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).
- From a traditional IRA/rollover IRA. Not from 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 rules.
How Much Can You Donate?
- 2025 Limit: $108,000 per person (indexed annually for inflation; was $105,000 in 2024).
- Multiple Gifts: Split across charities, as long as the total does not exceed $108,000.
- Excess: Anything 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) by no later than mid-December for year-end gifts.
- Request a QCD Form or instruct them in writing to send the distribution to the named charity. Otherwise enroll in the IRA check writing feature, and then make the checks payable to the named charities.
- Get Acknowledgment from the charity that the funds were received.
- Track for Taxes: Custodian reports distributions 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 Charity: Use the IRS exempt organizations select check tool.
- State Taxes: Most states follow federal rules, but check.
- Post-70½ Contributions: These reduce your QCD limit (follow the IRS worksheet).
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 is that if you choose to sign up for the checking feature on your IRA, which is the easiest way in most cases, make sure the charity cashes the check before year end. As a result, it’s probably not wise to wait until late in the year to mail the checks, because the deduction is not based on when the check was written, but when it was cashed.
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.