QCD Giving: Support the ABF with Your Retirement Accounts
If you are over 70 ½ years old, a qualified charitable distribution (QCD) allows you to directly support the ABF using your taxable IRA accounts.
What is a Qualified Charitable Distribution (QCD)?
A Qualified Charitable Distribution (QCD) is a gift made directly from a taxable IRA to a charitable organization. The distribution is made directly to the organization of your choice and never passes through your hands.
Your QCD gift makes an immediate impact on the ABF while unlocking unique potential benefits for you:
• Lower your taxable income: Depending on your financial situation, a QCD can make it possible to avoid paying taxes in a higher income bracket, prevent the phaseout of certain tax deductions, lower Medicare premiums, and decrease the amount of your Social Security that is subject to tax, among other potential benefits.
• Make your Required Minimum Distribution: After age seventy-three, you must take a required minimum distribution (RMD) from your taxable retirement accounts each year. Making a QCD before taking your RMD for the year can fulfill this requirement.
• Reduce your RMDs: RMDs are calculated as a percentage of the balance of your retirement account. Your gift can lower future RMDs by decreasing the value of your account.
• Give more: QCDs are not counted toward AGI-based limits on the value of charitable gifts that can be deducted from your income.
• See your impact: When you give through a QCD, you can see the impact you’re making at the ABF immediately. As a Fellow of the ABF, your QCD giving is counted toward your total giving and contributes to your giving society level.
How can I make a Qualified Charitable Distribution to the ABF?
The process of making a QCD to the ABF is relatively simple. You should consult with a professional, such as a tax advisor or financial advisor, to make your QCD. To get a sense of what the process might look like for you, read below.
Step one: Request your QCD from your IRA administrator. You can request a QCD be made through a letter to your IRA administrator. Below, you can view a sample letter that can be used to request your IRA administrator make your QCD to the ABF. It may also be possible to make your QCD online through your IRA administrator’s website.
Step two: Let us know it’s on the way. Notifying the ABF of your QCD contribution helps us provide the required IRS acknowledgement and ensures we follow any designations you attach to your gift, which are not always shared by IRA administrators. The ABF can recieve notification of QCD contributions through the form linked below.
To receive benefits in this tax year, your distribution must be completed by December 31.
If you have questions about QCDs and how they support the ABF, read more below, or contact Natalie Shoop, Senior Director of the Fellows, at 312-988-6533 or nshoop@abfn.org.
Frequently Asked Questions
- If you are at least 59 ½ years old, you can take a distribution from your IRA without penalty and use those funds to make a gift. You can then take a charitable deduction for the amount of your gift. Unlike a QCD, this distribution may be considered income for tax purposes.
- At any age, you can name the ABF as a beneficiary of your retirement accounts, including any IRAs in your name. Those who name the ABF as a beneficiary of their retirement accounts or life insurance policies are honored in the ABF Legacy Society. You can learn more about the Legacy Society and make the ABF a part of your legacy planning here.
- If you have questions about making a legacy gift, please contact Erla Teli, Director of Major Gifts and Grants, at 312-988-6511 or eteli@abfn.org
- No, you must be 70 ½ years old at the time you make your QCD.
- A QCD can only be made from a taxable IRA. Traditional, rollover, and inherited IRAs are eligible, as well as inactive SEP and SIMPLE IRAs. Roth IRAs are not eligible.
- You may be able to make a QCD using assets held in another kind of account, such as a 401(k) or 403(b), by rolling over those assets into an IRA. Speak with your financial advisor or plan administrator to learn more.
- QCDs are capped at $111,000 for the 2026 tax year.
- Yes, you can make QCDs to different organizations in the same tax year. The only limitation is that the total you give to all organizations using QCDs must be under the dollar limit set by the IRS.
- You and your spouse can both make QCDs in the same year, so long as you are both over 70 ½ years old. The annual dollar amount limit set by the IRS applies to each of you separately.
- Using a QCD allows you to satisfy the requirement to take distributions from your taxable retirement accounts after age seventy-three without increasing your taxable income. To use a QCD to satisfy your RMD, your QCD must be processed before taking any other distributions from your taxable retirement accounts for the year.
- If you make a QCD after taking a distribution from your taxable retirement accounts earlier in the year, the QCD does not offset the RMD, and the RMD may still be considered taxable income. This is known as the “first dollar out” rule.
- A financial advisor or tax advisor can help you plan the timing of your QCDs and RMDs.
- No, a QCD can only be made directly between your taxable retirement account and the organization of your choice. Any other withdrawals cannot be considered a QCD and may be considered taxable income.
This information is not intended as legal, accounting, or other professional advice.