RMDs & QCDs – A Perfect Match

By Avery E. Neumark  |  December 5, 2019

RMDs & QCDs – A Perfect Match

Individuals who are at least 701 ⁄2 years old must begin taking a Required Minimum Distribution (RMD) from their IRAs and, in many cases, employer retirement plans as well. Those who don’t want or need the money at the time do not have much of a choice, as there is a 50% excise tax penalty should RMDs not be taken. Thus, it makes sense to plan ahead for these distributions, especially as year-end approaches.

There are several important tax laws to consider when planning for RMDs: the rules regarding required minimum distributions, the Tax Cut and Jobs Act of 2017 (TCJA) and the Protecting Americans from Tax Hikes Act of 2015. The rules regarding RMDs are complex, but in general, as indicated earlier, they require individuals to begin receiving an RMD from their traditional IRAs beginning at age 701 ⁄2. The TCJA increased the standard deduction so that many taxpayers who previously itemized deductions will now benefit from using the standard deduction instead and will no longer deduct charitable contributions. The Protecting Americans from Tax Hikes Act of 2015 made permanent the Qualified Charitable Distribution (QCD) provisions allowing charitable contributions to be made directly from an IRA to a qualifying charity. In doing so, the taxpayer avoids paying income taxes on the RMD and instead makes a QCD directly to the charity with pretax dollars. This strategy can result in a tax savings benefit for the taxpayer.


  • For individuals who do not itemize, donating to charity via QCD can provide the taxpayer with a tangible tax benefit from the charitable donation.
  • IRA distributions add to a taxpayer’s gross income, and higher income for retirees can disadvantage them in several ways—from higher taxation of Social Security benefits to reducing the deductibility of Schedule A deductions. A QCD is not included in the taxpayer’s income and is not deductible on the taxpayer’s return, which can lower a taxpayer’s adjusted gross income (AGI) and prevent these disadvantages.


  • The QCD is allowed for IRA owners. The owner must actually be age 701⁄2 or older in order to be eligible for the QCD.
  • Owners of inherited IRAs will also qualify if they are over 70 1⁄2.
  • The QCD is not available from company plans


  • A QCD must be made directly from the IRA to the charitable organization. This includes any qualified charity but does not include donor-advised funds, a supporting organization, a private foundation or a split-interest charitable trust.
  • There must be a direct transfer from the IRA account to the charity. If the custodian makes the check payable to the charity but sends the check to the IRA holder to pass on, it is still considered a good QCD.
  • If one received gifts or other benefits in return, the distribution would not be considered a QCD.
  • The QCD must have acknowledgment in writing from the charity reflecting the date and amount of the contribution.


  • The QCD will count toward the IRA owner’s RMD from his IRA. Of course, the QCD can exceed the RMD, up to the permissible limits.
  • The exclusion from gross income is limited to no more than $100,000 per year. Husband and wife are treated separately, and each spouse can contribute up to the $100,000 limit from their respective accounts.
  • If the IRA includes nondeductible contributions, the distribution is first considered to be paid out of otherwise taxable income.


To the extent that an IRA owner makes charitable deductions, and to the extent that it is administratively feasible, charitable contributions should come from the IRA. For those who are approaching age 701 ⁄2 or who are already there, employing the right tax strategy can make a significant difference. To take advantage of this tax strategy for 2019, the QCD must be completed by December 31, 2019. To determine if QCDs should be included in your individual tax strategy, we encourage you to consult with your tax advisor.


This article was written before the SECURE ACT was signed into law.

The SECURE ACT changed the age for beginning RMDs from 70 ½ to 72. Thus, an individual who attains 70 ½ after December 31, 2019, need not withdraw from their IRA until age 72.

However, the QCD rules have not changed. QCDs can still be made at age 70 ½ even though RMDs may be delayed to age 72.

About Avery E. Neumark

Avery E. Neumark Linkedin Icon

Avery E. Neumark, CPA, JD, LL.M, is a Partner in the Tax Group at Marks Paneth LLP. Mr. Neumark is an attorney with more than 35 years’ experience specializing in employee benefits and executive compensation, as well as ERISA, retirement and health and welfare planning, and compensation consulting. He has particular expertise in both for-profit and nonprofit sectors, and in serving high-net-worth individuals. His prior experience in professional services firms includes various leadership and management... READ MORE +

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