A QCD is a direct transfer of funds from an IRA to a qualified 501(c)(3) nonprofit organization. These gifts count toward the donor’s required minimum distribution once they reach age 73, but do not count as taxable income — making them a uniquely advantageous way to give.

• Eligibility: Must be age 70½ or older and use a traditional IRA.
• Annual cap: Up to $108,000 per person in 2025 (indexed annually for inflation).
• No itemization required: Even if the donor takes the standard deduction, they can still benefit. QCDs reduce adjusted gross income (AGI) rather than offering a standard charitable deduction—making them valuable even for those who do not itemize.
• IRS requirements: Funds must be transferred directly from the IRA to the nonprofit (not withdrawn first).
• Required Minimum Distribution (RMD) Fulfillment: QCDs count toward the RMD for the year—helping clients meet IRS distribution rules without increasing taxable income.
• Cleaner Tax Return: Since QCDs are excluded from income, the client’s 1040 is simplified and AGI appears lower—potentially qualifying them for more credits or deductions.