The QCD Move That Turns 401(k) RMDs Into Tax-Free Charitable Gifts at 70

"Age 70½ at the time of transfer. The day of the wire is what counts, so the donor must have already reached 70½ on t"

A retiree making charitable gifts with traditional IRA distributions may receive little or no federal tax benefit when the standard deduction exceeds itemizable expenses. A Qualified Charitable Distribution allows a donor age 70½ or older to direct funds from a traditional IRA directly to a qualified 501(c)(3) up to $111,000 in 2026. The amount transferred does not appear on the tax return as income and is excluded from AGI, which can be more valuable than a deduction. The transfer must go directly from the IRA custodian to the charity, not through the donor’s bank account. The rule applies to traditional IRAs, not 401(k)s, and eligibility depends on reaching age 70½ by the transfer date.

Read at 24/7 Wall St.