Definition
A donation sent directly from a traditional IRA to a charity, available once the owner reaches the qualifying age (70½ under current law). The amount counts toward any required minimum distribution for the year but is excluded from taxable income entirely.
Why it matters
For retirees who give to charity anyway, a QCD beats donating cash: it satisfies RMDs without raising AGI, which can protect against Medicare premium surcharges and taxes on Social Security. It delivers its full tax benefit even to those taking the standard deduction, when an itemized charitable deduction would do nothing.
Example
A 75-year-old with a $20,000 RMD directs $8,000 of it straight from the IRA to a food bank as a QCD. Only $12,000 lands in taxable income, and the gift required no itemizing to pay off at tax time.
Put it into practice
Related terms
Required minimum distribution (RMD)Individual retirement account (IRA)Standard deductionAdjusted gross income (AGI)
This definition is educational, not financial, legal, or tax advice. U.S. rules and limits change; verify time-sensitive details with official sources. See our disclaimer.