Qualified Charitable Distribution.

In plain English

A qualified charitable distribution (QCD) is a transfer made directly from your traditional IRA to a qualified charity once you reach age 70 1/2. The money never lands in your hands, so it is left off your taxable income for the year. A QCD can also count toward your required minimum distribution (RMD), the amount the IRS makes you withdraw from retirement accounts each year once you hit the RMD age. There is an annual dollar cap on how much you can give this way, and it adjusts for inflation over time.

01Why it matters

Because a QCD skips your taxable income entirely, it can be worth more than a normal charitable deduction, especially if you take the standard deduction and would get no benefit from giving otherwise. It can also lower income-based costs like Medicare premiums.

02The math, step by step

Say you are 73 and your required minimum distribution for the year is $10,000. Instead of taking that money, paying tax on it, and then donating, you have your IRA send $10,000 directly to your church as a QCD. That $10,000 satisfies your RMD and never appears in your taxable income. If you are in the 22 percent bracket, keeping that $10,000 off your return saves you roughly $2,200 versus a normal withdrawal. For tax year 2026 the most you can exclude this way is $108,000 per person, a figure the IRS adjusts for inflation each year.

03What this is NOT

04Receipts

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