Glossary
Qualified Charitable Distribution
A qualified charitable distribution (QCD) is a transfer of money directly from an IRA to a qualified charity, available to IRA owners age 70½ or older, that is excluded from taxable income and can count toward the year's required minimum distribution.
The transfer must go directly from the IRA custodian to the charity — money withdrawn first and then donated does not qualify. An annual per-person limit applies (set in law and now indexed for inflation), and donor-advised funds and private foundations are not eligible recipients.
Why it matters in practice
Since most retirees now take the standard deduction, ordinary charitable gifts often produce no tax benefit. A QCD restores one: the donated amount never enters income at all, which can also lower the AGI-linked thresholds that drive Medicare premium surcharges and taxation of Social Security. For charitably inclined retirees facing RMDs they do not need, it is one of the cleaner tools available — with paperwork details worth confirming with a tax preparer.
Related terms: Required Minimum Distribution · IRA (Individual Retirement Account) · Traditional IRA · Adjusted Gross Income (AGI)