Qualified Charitable Deduction requirements

Qualified Charitable Deduction requirements

Take advantage of the Qualified Charitable Deduction (QCD) with your Required Minimum Distribution (RMD). The requirements for the Qualified Charitable deduction are as follows:

  1. The IRA owner must be at least age 70 ½
  2. The maximum dollar amount is limited to $100,000
  3. Only distributions from an individual IRA (including a rollover IRA) are eligible
  4. The distribution must go directly by check made specifically to a public charity.
  5. It cannot go to a private foundation, nor may it go to a charitable supporting organization or a donor advised fund
  6. The distribution must be one that otherwise would have been eligible for a full charitable deduction under IRC Section 170
  7. Satisfies the RMD for the taxpayer

There is a benefit of doing a QCD. The distribution comes out of the IRA without any of the tax consequences and excluded from income altogether.

Notably, there is no charitable deduction for making the QCD contribution to the charity. The reason for this is because it was already entirely pre-tax. (meaning having come directly from a pre-tax IRA).