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 $100,000 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 $100,000 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.
*Beginning in 2023, a QCD may be taken to fund a Charitable Remainder UniTrust, Charitable Remainder Annuity Trust, or Charitable Gift Annuity up to a maximum one-time amount of $50,000. The $50,000 amount for the Charitable Remander UniTrust, etc. is indexed for inflation starting in 2024. The $100,000 QCD amount is indexed for inflation starting in 2024 as well.
**Due to changes to federal law that took effect on January 1, 2023, the age at which you must begin taking RMDs differs depending on when you were born. If you reached age 72 on or before December 31, 2022, you were already required to take your RMD and must continue satisfying that requirement. However, if you had not yet reached age 72 by December 31, 2022, you must take your first RMD from your traditional IRA by April 1 of the year after you reached age 73.