Here’s what HIVE AI had to say about “Are qualified charitable distributions still tax-advantaged in 2025?”:
Qualified Charitable Distributions (QCDs) in 2025
Are QCDs still tax-advantaged?
- Yes. A QCD is a direct transfer from your IRA to a qualifying charity that is excluded from your gross income. The basic QCD rules (age 70½ or older; direct trustee-to-charity transfer; only to section 170(b)(1)(A) organizations—not to donor-advised funds or most supporting organizations) remain in effect for 2025. The exclusion applies only to amounts that would otherwise be taxable and only if the gift would be deductible under section 170 but for percentage limits and itemizing status. 1
2025 dollar limits and inflation adjustments
- Annual limit: Up to $108,000 of QCDs can be excluded from income for 2025 (indexed from $105,000 in 2024). 2
- One-time split-interest election: You may make a single, irrevocable QCD to fund a charitable gift annuity or charitable remainder trust; for 2025, up to $54,000 can be excluded under this election (indexed from $53,000 in 2024). 2
Key tax advantages in 2025
- QCDs keep the distribution out of your adjusted gross income (AGI), which can help with Medicare IRMAA, Social Security taxation, deduction phaseouts tied to AGI, and state tax computations that follow federal AGI. The exclusion is provided by section 408(d)(8). 1
- You don’t also claim a Schedule A charitable deduction for the same QCD, but you must obtain a contemporaneous written acknowledgment from the charity (date, amount, and whether anything of value was received). 3
Important limitations to preserve the tax benefit
- Eligible charities only: The transfer must go to a section 170(b)(1)(A) organization and not to a donor-advised fund or most supporting organizations. 1
- Eligible accounts: A QCD must come from an IRA. Distributions from a SEP or SIMPLE IRA that is currently receiving employer contributions and from employer plans (401(k), 403(b)) are not QCDs. 1
- Age rule: You must be at least 70½ on the date of the distribution. 1
- Anti-abuse offset: If you claimed itemized charitable deductions for IRA-funded gifts after the year you turned 70½, those deductions reduce the amount of your future QCDs that can be excluded from income. IRS worksheets demonstrate how this reduction carries forward year-to-year. 4
One-time split-interest QCD election
- You can make a one-time election to fund a charitable remainder trust, charitable remainder annuity trust, or charitable gift annuity solely with QCD amounts. Publication 526 flags this feature; the indexed 2025 cap is $54,000. 5 2
Practical tips for 2025
- Work directly with your IRA custodian so the distribution is made payable to the charity, not to you, to preserve QCD treatment. 1
- Keep acknowledgment letters from charities; QCDs aren’t deducted on Schedule A, but substantiation is still required. 3
- If you’ve made IRA-funded charitable gifts you deducted after age 70½, use the IRS QCD worksheet to compute your remaining excludable QCD amount for 2025. 4
Sources
1 – IRC § 408(d) 📄 Summarize
2 – Notice 2024-80 📄 Summarize
3 – IRS Newsroom – IR-2023-215 📄 Summarize
4 – IRS – Publication 590-B Distributions from Individual Retirement Arrangements (IRAs) 📄 Summarize
5 – IRS – Publication 526 Charitable Contributions 📄 Summarize
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