Required minimum distributions are one of retirement's least popular rules.
Once you hit 73, the IRS forces you to pull money out of traditional IRAs and 401(k)s whether you need it or not, and that withdrawal lands on your tax return as ordinary income.
For retirees who don't need the cash, it can feel like a penalty for saving well.
There's a workaround that stays underused: the qualified charitable distribution, or QCD.
It lets IRA owners age 70½ and older send money straight from their IRA to a charity.
The transfer counts toward that year's required minimum distribution, but it never shows up as taxable income.
The money must move directly from the IRA custodian to the charity — if it hits your checking account first, the IRS treats it as a normal withdrawal and you lose the benefit.
You also can't double dip by claiming a charitable deduction for the same dollars.
The annual cap is $105,000 per person in 2025, a figure that rises with inflation.
Married couples with separate IRAs can each give that much.
One quirk worth knowing: a QCD can satisfy your RMD even if you make the gift earlier in the year, before you've taken any other distribution.
A retiree in the 22% bracket who sends $10,000 to charity through a QCD avoids roughly $2,200 in federal tax, plus possible state savings.
Someone who doesn't itemize — which describes most retirees since the standard deduction jumped — gets no tax benefit at all from writing a check to a charity.
The QCD works regardless of whether you itemize.
There are limits on where the money can go.
The charity must be a qualified 501(c)(3), and the gift can't go to a donor-advised fund, a private foundation, or a supporting organization.
Gifts to political groups or individuals never qualify.
Instead of giving $5,000 a year for several years, a retiree might direct a large QCD in a single year to cover multiple years of intended giving.
That can clear out IRA money at a lower effective tax cost and shrink the balance that future RMDs are calculated from.
Another angle involves the standard deduction.
Since the 2017 tax law roughly doubled it, many retirees get no write-off for charitable gifts.
The QCD sidesteps that problem entirely because it reduces adjusted gross income rather than relying on a deduction.
Lower AGI can also mean smaller Medicare premium surcharges, since those are tied to income thresholds.
Custodians often need two to three weeks to process requests, especially in December when volume spikes, so paperwork filed on the 28th may not clear in time.
Ask for a written confirmation that the transfer went through and keep it with your tax records.
If you're 70½ or older and charitably inclined, this is one of the few moves that lowers your tax bill without changing your lifestyle.
Final Thoughts
The catch is that it takes a phone call and some planning, which is probably why so many eligible retirees never use it.