At 74, She Can Give $10,000 From Her IRA Directly to Church and Have It Count Toward Her RMD Without Raising Taxable Income

Quick Read

• A qualified charitable distribution, or QCD, allows IRA owners age 70½ or older to send money straight to charity, satisfy part of their required minimum distribution, and keep the gift out of taxable income.

• A $10,000 QCD can save about $1,980 in federal tax compared with withdrawing the money first and donating it separately, because the exclusion reduces adjusted gross income, not just taxable income.

• Taking the money personally first, missing the year-end deadline, or directing it to a donor-advised fund can all prevent the transfer from qualifying as a QCD.

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Many retirees give to their church every year and receive no tax break for it. For anyone age 70½ or older who owns an IRA, a qualified charitable distribution can change that. The IRA custodian sends the money directly to the charity, the amount counts toward the required minimum distribution, and none of it is included in taxable income.

Why a Church Gift May Not Create a Tax Deduction

Consider a single 74-year-old taxpayer. In the relevant tax year, the standard deduction is $16,100. She also qualifies for an extra $2,050 because she is at least 65, along with a separate senior deduction of up to $6,000 that phases down once modified adjusted gross income rises above $75,000. Itemizing means adding up deductions one by one, and it only helps when that total is higher than the standard deduction.

For most retirees, the standard deduction is larger. People who do not itemize can also deduct cash donations, but only up to $1,000, or $2,000 for married couples filing jointly. Those who do itemize can deduct only the portion of charitable giving that exceeds 0.5% of adjusted gross income.

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What the Tax Code Allows an IRA to Do

Under 26 U.S.C. § 408(d)(8), the IRA trustee must send the money directly to the charity, and the account owner must be at least 70½ when the distribution is made. Most public charities, including churches, qualify. Donor-advised funds and supporting organizations are excluded by law, as are most private foundations. Traditional and inherited IRAs qualify. Ongoing SEP and SIMPLE IRAs do not, and money must first be moved from a 401(k) into an IRA.

The annual cap began at $100,000 and has been indexed to inflation since 2023. For 2025, it was $108,000 per person. For 2026, the limit rises again with inflation to $111,000. The IRS confirms that a QCD can count toward the required minimum distribution, or RMD, that must be withdrawn each year.

Anyone born between 1951 and 1958 must begin RMDs at age 73, and SECURE 2.0 later increases the starting age to 75. QCDs can be used years before that, which matters because the RMD rule is only one of several IRS pitfalls that can quietly force money out of retirement accounts.

Why Excluding It From Income Matters More Than Taking a Deduction

Adjusted gross income, or AGI, affects several other costs. Social Security benefits become taxable once half of those benefits plus other income exceeds $25,000 for single filers or $32,000 for joint filers. Medicare's Part B premium for 2026 is $202.90 a month. For income above $109,000, or $218,000 for joint filers, that premium rises to $284.10. Social Security bases the surcharge on the most recent federal tax return it receives from the IRS, generally the return from two years earlier, and each spouse pays the surcharge on their own Medicare premium. Medical expenses are deductible only to the extent they exceed 7.5% of AGI. A deduction does not change those figures. Only an exclusion lowers AGI.

If she is single, does not itemize, and is in the 22% tax bracket, the difference is meaningful. If she withdraws $10,000 and then writes the church a check, the full $10,000 enters AGI, and only $1,000 is recoverable as a deduction. That leaves $9,000 of additional taxable income and about $1,980 in extra federal tax. If the same amount is sent as a QCD, it adds nothing to AGI.

Mistakes That Can Make the Gift Taxable

Two Additional Rules to Keep in Mind

SECURE 2.0 created a one-time option to send a QCD to a charitable remainder trust or to a charitable gift annuity funded entirely by QCDs. The base limit is $50,000, indexed for inflation. The 2025 amount was $54,000, and the 2026 amount is adjusted again for inflation. That total counts against the annual QCD cap, and a charitable gift annuity must begin paying at least 5% within one year. In addition, any deductible IRA contributions made after age 70½ reduce the available QCD exclusion dollar for dollar.

Contact the Custodian Before the Year-End Deadline

She should call her IRA custodian, ask for its QCD form, and provide the church's legal name, address, and tax identification number. The check should be made payable to the church. Ideally, she should arrange the transfer early in the year, before making any other withdrawal, so the gift can satisfy the RMD first. With only a limited amount of time left in the year, she should also ask for the custodian's December processing deadline, because the money must leave the account by year-end to count for that tax year.

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