Using a QCD for charitable giving 

In 2025, the annual limit for qualified charitable distributions (QCDs) from an IRA is $108,000 per individual. This means individuals aged 701/2 or older can directly donate up to this amount from their IRAs to qualified charities without it being counted as taxable income. For married couples, each spouse can make QCDs up to $108,000, potentially totaling $216,000. Additionally, there’s a separate $54,000 limit for a one-time QCD used to fund a charitable gift annuity or charitable remainder trust.  

A QCD counts toward your required minimum distribution (RMD) and reduces the taxable income of your mandatory distribution. Additionally, it can also decrease the amount of Social Security that is subject to tax and potentially lower your Medicare premiums. 

Important considerations: 

• Be careful not to withdraw the funds or deposit the RMD into your personal account. The funds must be made payable directly from the IRA to the charity. 

• You can distribute the QCD to multiple qualified charities. 

• Not every organization or cause qualifies for QCD. It must be a 501(c) (3) to be eligible. 

• For a QCD to count toward your minimum annual IRA distribution, it must meet the same deadline as a normal distribution. (Usually Dec. 31). 

• Be sure to inform your tax preparer that you did a QCD.  

Caution: If you take money out early in the year, that distribution would count toward your RMD. For example, John, who is 75, takes his full RMD in February and deposits the funds into his bank account. In November, he wants to do a QCD. John cannot retroactively deem the February distribution to be a QCD. He must take an additional distribution if he still wishes to do a QCD for the calendar year. This income can be excluded, but it still won’t offset the income from the RMD taken earlier in the year. 

Barry Lisak is an IRS enrolled agent specializing in personal and small business taxes for 30 years. Any questions can be directed to him at 516-829-7283, or mrbarrytax@aol.com.