Qualified Charitable Distribution (QCD) Calculator: IRA → Charity Tax-Free
From age 70½, send up to $108K (2025) directly from your IRA to charity. The QCD counts toward your RMD without raising AGI — preserving Medicare IRMAA brackets, Social Security taxability, and AGI-tested credits. For standard-deduction filers especially, the savings are substantial.
Why the QCD is the best charitable-giving tool for IRA-holding retirees
A QCD has two distinct advantages over the alternative of taking your RMD as cash, paying tax on it, and then donating: (1) the QCD doesn't raise your AGI, which preserves every AGI-tested benefit you have, and (2) it counts toward your RMD requirement without being taxable income. For standard-deduction retirees — the vast majority post-TCJA — this is dramatically more efficient than the take-then-donate alternative.
The AGI side is where the multiplier effects pile up. Higher AGI can push you into IRMAA's Medicare premium surcharges (which kick in at $106,000 single / $212,000 MFJ MAGI in 2025), increase how much of your Social Security is taxable (up to 85%), and reduce premium tax credits if you're on an ACA-eligible plan. By routing the donation through the IRA, your AGI stays where it was — every dollar of those AGI-tested benefits is preserved while the same charitable dollars flow to the same charity.
How the math works
- QCD amount = min(this year's RMD, planned donation, $108,000 cap).
- Without QCD strategy: take the full RMD as taxable income (tax = RMD × marginal rate), then donate cash and itemize if possible. Itemizer recovery = donation × marginal rate (capped at 60% of AGI).
- With QCD strategy: the QCD portion isn't taxable income. Tax only on the RMD above the QCD amount.
- Tax saved = net tax without − net tax with. Often equals the full marginal rate × QCD amount for standard-deduction filers.
Sources: IRC §408(d)(8) for the QCD authority, SECURE 2.0 Act 2022 for the annual indexing, IRS Notice 2023-75 for the 2025 $108,000 limit, IRS Pub 590-B on the operational rules.
What this simplifies: doesn't model the AGI-side benefits (Medicare IRMAA, SS taxability, ACA subsidies) — these can be SUBSTANTIALLY larger than the direct tax saved. The full QCD benefit is the headline tax saved here PLUS the preserved AGI-tested benefits. For high-IRMAA-bracket retirees, the IRMAA savings alone can double the QCD's real value.
Math runs locally. Inputs never leave your browser. Source on github.
Where this calculation doesn't apply
- You're under 70½. The QCD authority kicks in at 70½, even though RMDs themselves don't start until 73 (under SECURE 2.0). Between 70½ and 73, you can do QCDs even without an RMD requirement, but the strategy is less compelling without an RMD to satisfy.
- You take the standard deduction AND don't donate much. The strategy works for donations you'd make anyway. It's not a reason to donate more than you'd otherwise plan — that's increased giving disguised as tax savings.
- Heavy itemizer. Itemizers already get nearly the full marginal-rate benefit through the charitable deduction. The QCD's incremental benefit shrinks dramatically — often near zero on direct federal tax.
- QCD-eligible charity only. QCDs must go to qualified 501(c)(3) public charities. Private foundations, donor-advised funds, and supporting organizations are NOT QCD-eligible (one-time $54,000 split-interest exception in 2025 for charitable gift annuities / CRTs).
- Roth IRA holders. QCDs are for traditional IRA holders. Roth distributions are tax-free anyway — no QCD benefit, and Roth IRAs have no lifetime RMDs.
What to actually do
- Contact your IRA custodian early in the calendar year — they need to issue a check directly to the charity (made out to the charity, not to you). A check made out to you and then re-donated does NOT qualify.
- Confirm the charity is a 501(c)(3) public charity — check IRS Pub 78 (the EO Select Check tool) before donating. Private foundations, supporting orgs, and DAFs are NOT QCD-eligible.
- Document everything: the IRA-to-charity check, the charity's acknowledgment letter, and your tax-return reporting (Form 1040 line 4a, with "QCD" annotation on line 4b).
- Coordinate with the year's RMD calc — your QCD counts toward the RMD requirement up to its dollar value. If your RMD is $50k and you QCD $30k, only $20k remains as a regular taxable distribution.
- If you're in the IRMAA-relevant income range, prioritize maximizing the QCD up to the $108k limit. The premium savings can rival the direct federal tax savings.