What Is a Qualified Charitable Distribution?

A Qualified Charitable Distribution (QCD) is a direct transfer of funds from a traditional IRA to an eligible nonprofit that counts toward your required minimum distribution (RMD) but is excluded from your taxable income. You must be at least 70½ to make a QCD, and the annual limit is $105,000 per person in 2024 (indexed for inflation). Because the QCD goes directly from your IRA to the charity and never passes through your hands, you pay no income tax on it — even though it satisfies your RMD requirement for the year. This makes QCDs more tax-efficient than taking an RMD, paying tax on it, and then donating the after-tax cash to charity, especially for people who take the standard deduction and can't itemize charitable contributions anyway. QCDs also reduce your adjusted gross income, which can help lower Medicare Part B and D premiums and reduce the portion of Social Security benefits subject to tax.