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Home  >  Get Involved & Give Now  >  Qualified Charitable Distribution

What Is a Qualified Charitable Distribution?

QCD is a direct transfer of funds from an Individual Retirement Account (IRA) to a qualified 501(c)(3) nonprofit organization.

When done correctly:

  • The distribution is excluded from your taxable income
  • It can count toward your Required Minimum Distribution (RMD), if applicable
  • You do not need to itemize deductions to receive the tax benefit

Who Is Eligible to Make a QCD?

You may be eligible if:

  • You are age 70½ or older at the time of the distribution
  • The funds come from a Traditional IRA
  • The gift is made directly from the IRA to the charity

How Much Can I Give Using a QCD?

  • 2026 limit: Up to $111,000 per individual, indexed annually for inflation
  • Married couples may each give up to the full limit from their own IRAs

Why Donors Use QCDs

Many donors choose QCDs because they:

  • Reduce adjusted gross income (AGI) rather than relying on a deduction
  • May lower taxes on Social Security benefits and Medicare premiums
  • Satisfy RMD requirements in a tax efficient way
  • Provide a benefit even if the donor does not itemize deductions

Because the income is excluded entirely, the tax benefit can be more valuable than a charitable deduction.

How to Make a QCD to Lutheran Family Services Rocky Mountains

  1. Contact your IRA custodian and request a Qualified Charitable Distribution
  2. Instruct them to issue the payment directly to the charity
    • The check must be payable to Lutheran Social Services of Colorado
    • If your IRA custodian sends the check directly LFSRM, please ensure your name is listed on the memo line of the check so we know it’s from you .
      • Sometimes the IRA custodian overlooks including the donors name on the check or the included paperwork. Please ensure your QCD is properly acknowledged by sending us an email that notifies us of the amount, the name of the IRA custodian and any specific program designation for your gift, so we can ensure your gift does what you want.
  3. Ensure the distribution is completed by December 31 of the tax year
  4. Keep your acknowledgment letter for your records

Important: Funds may be mailed to you so you can deliver them (or mail them) to LFSRM yourself, but the check must still be made payable to the charity—not to you.

QCDs and Taxes: What to Know

  • QCDs are not claimed as charitable deductions
  • The distribution is reported on IRS Form 1099 R
  • You must still properly reflect the QCD on your federal tax return

We recommend working with your tax or financial advisor to ensure correct reporting.

If you are considering a Qualified Charitable Distribution or would like help making a gift to LFSRM, please contact: 

 

We are happy to work with you and your advisor.

This information is provided for educational purposes only and is not intended as legal, tax, or financial advice. Please consult your professional advisor to determine what is appropriate for your individual situation.