Definition
What is a qualified charitable distribution (QCD)?
A qualified charitable distribution is a direct transfer from an IRA to a qualified charity, available to account owners age 70½ and older. The amount given counts toward your required minimum distribution but is excluded from your taxable income, which can be more tax-efficient than donating cash.
Because the distribution never appears in your adjusted gross income, a QCD can help keep you below thresholds that trigger higher Medicare premiums or additional taxes.
QCDs are a favored tool for charitably inclined retirees who must take RMDs but do not need the full amount for living expenses.
This definition is for educational purposes only and does not constitute investment, tax, or legal advice. Rules and thresholds change; consult a qualified professional about your situation.