The IRS is reminding IRA owners aged 70½ and older that they can now donate up to $105,000 tax-free in 2024 through qualified charitable distributions (QCDs), an increase from the previous $100,000 limit. For married couples, each meeting the qualifications and with separate IRAs, the combined limit rises to $210,000. Starting in 2024, the QCD limit will also adjust annually for inflation, increasing to $108,000 in 2025.
QCDs offer a tax-free way to make charitable contributions directly from an IRA, provided the donation is sent directly to a qualified charity by the IRA trustee. This makes QCDs especially appealing since they don’t require itemizing deductions.
For those aged 73 or older, QCDs can also satisfy the year’s required minimum distribution (RMD). Since regular IRA distributions are typically taxable, this provision provides a valuable opportunity to fulfill both RMD requirements and philanthropic goals.
Reporting QCDs on Your Tax Return
QCDs made in 2024 will need to be reported on your 2024 tax return. IRA trustees will issue Form 1099-R in early 2025 to document any distributions. The total amount of all IRA distributions should be entered on Line 4a of Form 1040 or 1040-SR. If the entire amount qualifies as a QCD, enter “0” on Line 4b and mark it as a QCD.
Make sure to obtain written acknowledgment from the charity that includes the donation date, amount, and confirmation that no goods or services were received in return.
For additional guidance, refer to Publication 526 (Charitable Contributions) and Publication 590-B (Distributions from IRAs) on the IRS website.
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