What Is a QCD?
A Qualified Charitable Distribution is a direct transfer of funds from your IRA to an eligible 501(c)(3) charitable organization. Instead of taking your RMD into your own hands (and paying taxes on it), the money goes straight to charity.
Who Can Use a QCD?
- You must be age 70½ or older to make a QCD.
- QCDs can be made from IRAs (Traditional, SEP, or SIMPLE IRAs that are not active employer plans).
- The maximum annual QCD limit is currently $100,000 per person, per year (indexed for inflation starting in 2024).
How QCDs Interact With RMDs
- A QCD counts toward your annual RMD requirement.
- Because the distribution is sent directly to charity, the amount is excluded from your taxable income.
- This can be beneficial for those who want to support charitable causes while also meeting IRS rules.
Important Considerations
- The donation must go directly from your IRA custodian to the qualified charity — if you withdraw the funds first and then donate, it does not count as a QCD.
- Not all nonprofits are eligible. For example, donor-advised funds and private foundations do not qualify.
- While QCDs don’t generate a charitable deduction, the exclusion from taxable income can provide a similar benefit.
How MidAtlantic IRA Helps
At MidAtlantic IRA, we can process your QCD request once you’ve identified the charity and confirmed its eligibility. We’ll ensure the distribution is handled properly so it meets IRS rules.
Work With Your Advisors
Whether a QCD makes sense depends on your personal tax situation, charitable goals, and overall retirement plan. Your financial or tax advisor can help determine if this option is right for you.
Additional Resources
- IRS: Publication 590-B (Distributions from IRAs)
- MidAtlantic IRA: What Is a Required Minimum Distribution?
- MidAtlantic IRA: How RMDs Fit Into Your Retirement Strategy
Bottom line: A Qualified Charitable Distribution allows you to support causes you care about while meeting your RMD requirement — and it may reduce your taxable income.