How to Make a Charitable Gift From Your IRA

Each year, you can make a tax-free charitable gift from your IRA or certain other pre-tax retirement account. This is known as a qualified charitable distribution (QCD). These distributions allow you to meet your annual required minimum distribution without paying taxes on that amount. To do so, you must transfer the assets from your IRA to the charity directly. The amount you can give each year is capped, with a $108,000 limit in 2025. This is what you need to know.

A financial advisor can help you find tax-efficient ways to support favorite causes.

What Is a Qualified Charitable Distribution?

For individuals age 70 ½ or older, the IRS allows qualified charitable distributions, a form of charitable giving.

This gift is a transfer from a pre-tax retirement account that you own, such as an IRA or a 401(k), to the IRS-approved charity of your choice. Eligible gifts are then treated as tax-free transfers, meaning the value of this gift is not included in your annual taxable income.

Eligible gifts also apply toward your required minimum distributions (RMDs) for the year. If you do not need your mandatory withdrawal, you can use qualified charitable distributions to satisfy your RMD requirement tax-free.

To make a QCD, you must use a tax-advantaged retirement account. These typically include pre-tax accounts, with all forms of pre-tax IRAs allowing this type of giving.

Under some circumstances, you can also use a Roth IRA, but this is unusual. You must meet the age requirements for QCDs, and the recipient must be a qualified charity by law. Additionally, your assets must be transferred directly from the IRA to the charity in question, as the IRS will not consider this an eligible distribution if you transfer the assets to yourself and then gift them to the charity.

A QCD applies to your taxes in the tax year that the gift is received. Given that you are required to make a direct transfer, giving and receiving should be contemporaneous in most cases.

There are multiple ways to transfer funds for a QCD, including cash, securities and direct electronic transfers. You may also write checks made payable to the charity, as long as it draws directly from your IRA account.

The charity must then provide you with a receipt or other written confirmation of the gift. To be eligible, you cannot receive anything in return, such as tickets to a charity event.

For 2025, individuals age 70 ½ or older can make up to $108,000 in qualified charitable distributions that are excluded from taxable income. These distributions must be made directly from an IRA to one or more eligible 501(c)(3) charities.

Married couples filing jointly have a higher limit. The IRS allows each partner to make QCDs from separate IRAs for a combined total of $216,000. The transfer must be completed by December 31, 2025, and funds must move directly from the IRA custodian to the charity. QCDs cannot be made to donor-advised funds or private foundations, nor any supporting organizations.

How QCDs Affect Your Taxes and Estate Plan

A woman looking up the requirements for making a qualified charitable distribution (QCD).

QCDs offer more than just a way to give to charity. They can also serve as an important tax management tool for retirees who are required to take required minimum distributions from their IRAs.

Because a QCD transfers money directly from a pre-tax retirement account to a qualified charity, the amount donated is excluded from taxable income for that year. This can lower overall income, reduce the effective tax rate and keep the donor from moving into a higher tax bracket. For individuals with significant retirement assets, charitable giving can be a tax-efficient way to manage IRS income requirements.

Another advantage of QCDs is that they reduce adjusted gross income (AGI) rather than simply providing a deduction. This distinction matters because many tax thresholds, such as those determining how much of your Social Security income is taxable or the cost of Medicare premiums, are based on adjusted gross income.

By keeping income lower through a QCD, retirees may reduce or avoid additional taxes and surcharges tied to these programs. Unlike traditional charitable deductions, which must be itemized on your tax return, QCDs offer a benefit even to taxpayers claiming the standard deduction.

QCDs also help retirees meet their required minimum distributions without adding to their taxable income. After age 73, the IRS requires annual withdrawals from pre-tax retirement accounts. For many retirees who do not need the money for living expenses, these withdrawals can unnecessarily increase taxes.

Making a QCD allows the retiree to satisfy that annual requirement in full or in part while avoiding tax on the distribution. For example, if a retiree has a $15,000 RMD and makes a $15,000 QCD, the entire required distribution is fulfilled without increasing taxable income.

From an estate planning perspective, QCDs can help reduce the size of a taxable estate. Every dollar donated directly from an IRA removes that amount from the account before it can grow further, reducing both future RMDs and potential estate value.

This can help lower the eventual tax burden on heirs, who would otherwise be subject to ordinary income taxes on inherited IRA withdrawals. For larger estates, strategic annual QCDs can complement other lifetime giving strategies, such as annual exclusion gifts or charitable trusts, while still maintaining the donor’s philanthropic objectives.

Married couples can take advantage of QCDs by each making their own tax-free transfers from separate IRAs, effectively doubling annual charitable limits. Through QCDs, donors can see the impact of their gifts during their lifetime, rather than waiting to pass assets through a will or trust.

By integrating qualified charitable distributions into both tax planning and estate planning, retirees can support meaningful causes while reducing their income taxes and creating a more efficient transfer of wealth to future generations.

Reasons Why You May Want to Make a QCD

One reason to make a qualified charitable distribution is that it lets you donate directly from your IRA without creating taxable income. The money goes straight from your account to the charity, which keeps it from being counted as part of your annual income. This makes it a clean and efficient way to give, since the transfer is handled by your IRA custodian and requires minimal paperwork. For retirees who already support nonprofits, this approach can simplify annual giving while maintaining a clear tax record.

Another benefit of QCDs is that they help you meet your required minimum distribution without increasing your tax bill. Once you reach the age for your RMDs, you must withdraw a certain amount from your retirement accounts each year. If you do not need that money for living expenses, a QCD allows you to direct it to a qualified charity instead. This allows you to satisfy your RMD while supporting a cause you care about at the same time.

With QCDs, you can use your retirement savings for philanthropy without affecting your cash flow. Instead of writing checks or liquidating other investments, you can allocate funds from pre-tax accounts that might otherwise trigger future tax liability. This enables you to give larger gifts in a financially sustainable manner while ensuring your after-tax savings remain available for personal needs or your emergency fund.

Finally, QCDs can be part of your long-term legacy plan. Making direct charitable gifts from your IRA allows you to see the results of your giving during your lifetime while reducing the amount left in taxable accounts for heirs. For retirees who want to blend charitable goals with financial planning, QCDs are a simple and effective way to satisfy both priorities.

Bottom Line

A woman making a qualified charitable distribution (QCD) to a charity approved by the IRS.

Qualified charitable deductions are a way to give money tax-free from your pre-tax retirement account. As long as you follow the rules, you can give away up to $108,000 to eligible charities without increasing your taxable income.

Tips for Charitable Tax Deductions

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While giving cash is a straightforward way of making a donation, other assets are donatable as well. Consider donating real estate if you’re strapped but still want to make a difference.