Seniors Taking Required IRA Distributions? Save on Taxes with QCDs!

If you’re age 70½ or older and have an IRA, there’s a smart way to give to charity and save on taxes: the Qualified Charitable Distribution (QCD). Here’s what you need to know for 2025, with the latest updates from the new tax law.

 

What is a QCD?
A QCD lets you transfer money directly from your IRA to a qualified charity. For 2025, you can give up to $108,000 this way. If you’re married and both you and your spouse have IRAs, you can each give up to $108,000, for a total of $216,000.

 

Why use a QCD?
QCDs count toward your Required Minimum Distribution (RMD), which you must take each year based on age. The big benefit: the amount you give through a QCD is not included in your taxable income. This can help lower your Adjusted Gross Income (AGI), which may reduce the taxes you pay on Social Security benefits and could help keep your Medicare premiums lower.

 

How does it work?
The money must go directly from your IRA to the charity—don’t take it out yourself. The charity must be a qualified nonprofit (not a donor-advised fund or private foundation). You can’t get anything in return for your gift.

 

How to report:
Your IRA provider will send you a Form 1099-R.  Your CPA will ask for documentation of the QCD (cancelled check, payment details including charity name from IRA administrator), in order to deduct the QCD from your taxable IRA distribution.  Always get a receipt or written acknowledgement from the charity.

 

Bottom line:
QCDs are a great way to support your favorite causes, meet your RMD, and lower your taxable income—all at once.