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

Many retirees give to their church each year and receive no tax break at all. But a little-known IRS rule can let certain IRA owners avoid that problem by skipping the deduction route entirely.

If you are 70½ or older and own an IRA, a qualified charitable distribution, or QCD, can make a difference. Your IRA custodian sends the donation directly to the charity, the amount counts toward your required minimum distribution, and it does not show up in taxable income.

Why Her Church Donations Get No Tax Benefit Now

Consider a single 74-year-old filer. A standard deduction applies, along with an additional amount for being 65 or older and a separate senior deduction that begins to phase out once modified adjusted gross income crosses a set threshold. Itemizing only helps if total deductions exceed the standard amount.

For most retirees, the standard deduction is higher. People who do not itemize can deduct cash gifts, but only up to a limited amount. Those who do itemize can deduct only the portion of their giving that exceeds a small percentage of adjusted gross income.

What the Tax Code Allows an IRA to Do

Under federal tax law, the IRA trustee must send the money directly to the charity, and the donor must be at least age 70½ when the transfer occurs. Most public charities, including churches, qualify. Donor-advised funds and supporting organizations are excluded, and most private foundations do not qualify. Traditional and inherited IRAs can be used. Ongoing SEP and SIMPLE IRAs do not qualify, and money from a 401(k) must first be moved into an IRA.

The annual cap began at $100,000 and has been adjusted for inflation since 2023. For 2025, it was $108,000 per person. For 2026, it rises again with inflation to $111,000. The IRS also says a QCD counts toward the required minimum distribution, the amount retirees must withdraw each year.

People born from 1951 through 1958 must begin RMDs at age 73, and SECURE 2.0 later moves the starting age to 75. QCDs become available years earlier, which matters because RMD rules are only one of several tax traps that can quietly pull money from retirement accounts.

Why Excluding the Gift From Income Matters More Than a Deduction

Adjusted gross income affects several other costs. Social Security benefits become taxable once half of those benefits plus other income exceeds certain thresholds. Medicare premiums also rise at higher income levels. Medical expenses are deductible only above a percentage of AGI. A deduction does not change AGI, but an exclusion does.

Assume she is single, does not itemize, and is in the 22% tax bracket. If she withdraws $10,000 and then writes the church a check, the full $10,000 enters AGI, and only part of it comes back through a deduction. That leaves more taxable income and nearly $2,000 in added federal tax. If the same gift is made as a QCD, it adds nothing to AGI.

Mistakes That Can Make It Taxable

• Taking the cash first. If the money is received and then donated, it is treated as an ordinary taxable withdrawal.
• Bad timing. Money already withdrawn during the year cannot later be reclassified as a QCD. If the full RMD was already taken earlier, a later QCD may still qualify as a charitable gift, but the earlier withdrawal remains taxable.
• Receiving something in return. The full distribution must qualify as a charitable gift. A meal, tickets, or other benefit can disqualify it. The church must also provide the written acknowledgment required for a deductible gift.
• Sending it to the wrong recipient. Donor-advised funds do not qualify.
• Reporting it incorrectly. Form 1099-R shows the full distribution. On the tax return, the total is reported, the taxable amount is entered as zero, and the appropriate box is checked. The same gift cannot also be claimed as a charitable deduction.

Two Newer Rules to Keep in Mind

SECURE 2.0 created a one-time option to direct a QCD to a charitable remainder trust or a charitable gift annuity funded only by QCDs. The base limit is $50,000, indexed for inflation. That amount counts toward the annual QCD cap, and a gift annuity must begin paying at least 5% within a year. Any deductible IRA contributions made after age 70½ reduce the QCD exclusion dollar for dollar.

Contact the Custodian Before the Year-End Deadline

She should contact her IRA custodian, request its QCD paperwork, and provide the church’s legal name, address, and tax identification number. The check should be made payable to the church. It is best to arrange the transfer early in the year, before any other withdrawal, so the gift can satisfy the RMD first. She should also ask for the custodian’s year-end processing deadline, since the money must leave the account by December 31 to count for the year.