A qualified charitable distribution, or QCD, is a direct transfer from an IRA to a qualified charity.

Benefits Include:

• Giving money to a worthy charity of your choice.
• Reducing taxable portion of social security benefits since the QCD amount is excluded from income
• Reducing impact of certain tax credits and deductions by reducing your overall income
• QCDs count toward annual required minimum distributions when made prior to your RMD deadline

Some things to note:

• You must be 70½ or older to be eligible to make a QCD
• When making a QCD, you must receive the same type of acknowledgement of the donation that you would need to claim a deduction for a charitable contribution
• Any amount donated above your RMD does not count toward satisfying a future year’s RMD
• The maximum annual amount that can qualify for a QCD is $100,000. This applies to the sum of QCDs made to one or more charities in a calendar year. (If, however, you file taxes jointly, your spouse can also make a QCD from his or her own IRA within the same tax year for up to $100,000.)
• The amount of the QCD is limited to the amount of the distribution that would otherwise be included in income. If your IRA includes nondeductible contributions, the distribution is first considered to be paid out of otherwise taxable income
• Funds distributed directly to you, the IRA owner, and which you then give to charity do not qualify as a QCD