Qualified Charitable Distributions (QCDs) in 2025: New SECURE 2.0 Rules for Retirees
If you’re retired and looking for a tax-efficient way to give to charity, the SECURE 2.0 Act (passed in 2022) brought major updates that make Qualified Charitable Distributions (QCDs) more powerful than ever.
This guide explains QCD rules for 2025, including limits, eligibility, and step-by-step instructions to help you maximize your charitable giving and reduce taxable income.
What Is a Qualified Charitable Distribution (QCD)?
A Qualified Charitable Distribution (QCD) allows IRA owners age 70½ or older to donate funds directly from their IRA to a qualified charity.
The big advantage?
The amount donated counts toward your Required Minimum Distribution (RMD) but isn’t included in taxable income.
Reducing your Adjusted Gross Income (AGI) can help:
- Lower taxes on Social Security benefits
- Reduce Medicare Part B/D premiums
- Avoid other AGI-based tax surcharges
Unlike taking an RMD and donating cash, QCDs offer automatic tax savings even if you take the standard deduction.
2025 QCD Limits Under the SECURE 2.0 Act
The SECURE 2.0 Act made QCDs a permanent part of the tax code and introduced inflation indexing starting in 2024.
💰 QCD Limits for 2025
- $108,000 per individual
- $216,000 per married couple filing jointly (each spouse must have their own IRA)
Your QCD can fully or partially satisfy your RMD for the year. However, any amount donated beyond your RMD does not carry forward to future years.
New: One-Time QCD to Charitable Trusts or Gift Annuities
Beginning in 2024, retirees can use up to a portion of their annual QCD limit for one-time gifts to certain charitable remainder trusts (CRTs) or charitable gift annuities (CGAs).
For 2025:
You can allocate up to $54,000 (indexed for inflation) of your QCD toward one of these charitable vehicles.
This new provision allows donors to:
- Support a charitable cause
- Create a lifetime income stream for themselves or a spouse
- Combine philanthropy with estate and retirement planning
QCD Eligibility Rules for 2025
To qualify for a tax-free QCD, you must meet these requirements:
👤 Age Requirement
You must be at least 70½ years old at the time of the distribution.
🏦 Eligible Accounts
- Traditional IRAs
- Inherited IRAs
- Inactive SEP or SIMPLE IRAs
❌ Not eligible: 401(k)s or active employer retirement plans (you’ll need to roll those funds into an IRA first).
💝 Eligible Charities
- Must be a 501(c)(3) public charity
- Not allowed: Donor-advised funds or private foundations
How to Make a Qualified Charitable Distribution (Step-by-Step)
Follow these steps to ensure your QCD is processed correctly and counts toward your 2025 taxes:
Step 1: Contact Your IRA Custodian
Request a direct transfer from your IRA to the qualified charity. The funds cannot pass through your personal account.
Step 2: Complete the Transfer by December 31, 2025
QCDs must be completed within the calendar year to count for that year’s RMD.
Step 3: Verify Charity Eligibility
Confirm that the organization is an IRS-qualified 501(c)(3) and accepts direct IRA contributions.
Step 4: Obtain a Written Acknowledgment
The charity must provide a letter stating no goods or services were received in exchange for your donation.
Step 5: Report It Correctly on Your Taxes
- Your IRA custodian will issue Form 1099-R for the full amount.
- On your Form 1040, enter the total IRA distribution on Line 4a, report “$0 taxable” on Line 4b, and write “QCD.”
Why Choose a QCD Over a Regular Donation?
Here’s why QCDs are a smarter charitable giving strategy for retirees:
✅ Reduces taxable income
✅ Satisfies Required Minimum Distributions (RMDs)
✅ Helps manage Medicare and Social Security taxes
✅ Doesn’t require itemizing deductions
✅ Provides a direct and transparent way to support charities
Pro Tip: Consult Your Tax Advisor
If you’ve made deductible IRA contributions after age 70½, or you’re balancing RMDs with other income sources, the timing of your QCDs can affect your tax outcome.
A tax advisor or financial planner can help you:
- Determine whether to make a QCD before or after your RMD
- Confirm charity eligibility
- Optimize your tax and estate planning strategy
The Bottom Line
The SECURE 2.0 Act has made Qualified Charitable Distributions more valuable and accessible for retirees.
With inflation-adjusted limits, expanded options for charitable trusts, and clear IRS rules, QCDs are now one of the most tax-efficient ways to give in 2025.
Make your giving count — and keep more of your retirement income working for you and the causes you care about.
📚 References
- Internal Revenue Service. Publication 590-B: Distributions from IRAs. Updated 2025. https://www.irs.gov/publications/p590b
- Internal Revenue Service. Notice 2024-35: Relief for Inherited IRA RMDs.
- Public Law 116-94, Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019.
- Public Law 117-328, SECURE 2.0 Act of 2022.
- Fidelity Investments. Inherited IRA Rules and the 10-Year Rule Explained.
- Charles Schwab. Understanding Inherited IRA RMDs Under SECURE 2.0.
- IRS. Retirement Topics – Required Minimum Distributions (RMDs).
Connecticut Capital Management Group, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.
