Summary
Learn how to take a Qualified Charitable Distribution (QCD) with Vanguard. Discover the process, benefits, and tax advantages of donating from your IRA.
How do I take a qualified charitable distribution (QCD)?
How do I take a qualified charitable distribution (QCD)?
Why do this?
- You may be able to avoid taxes on otherwise taxable distributions if you're drawing from a traditional IRA.
- A qualified charitable distribution (QCD) is not subject to ordinary federal income taxes – the amount is simply excluded from your taxable income. In general, QCDs must be reduced by deductible IRA contributions made for the year you reach age 70½ or later. If you've made deductible IRA contributions for the year you turn 70½ or later, consult a qualified tax advisor prior to taking a QCD to determine the amount by which your QCD must be reduced.
- Your annual Required Minimum Distribution (RMD) may be donated to a qualified charity.
When can you do this?
- You must be at least 70½ at the time of the distribution. A QCD can be made after age 70½ even if you're not subject to RMDs yet (because you're under age 73**).
How can you do this?
- Confirm that the receiving charity is qualified under Internal Revenue Code § 170(b)(1)(A).
- You can take a maximum of $108,000 per year in qualified charitable distributions.
- Print this page and then start your distribution by clicking here and following the instructions listed below.
- Choose an eligible account and select the investment and dollar amount that you would like distributed.
- Select Send me a check payable to a charity from the Where's the money going? drop down.
- Read the QCD considerations.
- Enter the name of the charity.
- Proceed through to the confirmation screen.
About taking a qualified charitable distribution for your RMD
- Your QCD counts towards satisfying your RMD once you reach RMD age.
- Up to a maximum of $108,000 of your RMD can be donated to a qualified charity.
- If you have the RMD service, be sure to factor in these donations to avoid distributing more than your annual RMD.
- Qualified charitable distributions are counted for the tax year in which they're taken.