If you’ve reached age 70 1/2, you can make cash donations to IRS-approved charities—such as your church—directly out of your IRA.

With the One Big Beautiful Bill Act (OBBBA), these so-called qualified charitable distributions (QCDs) can be a very tax-smart way to satisfy your charitable inclinations.

Here’s what you need to know.

QCD Basics

You can arrange to have QCDs taken out of your traditional IRA(s) free of any federal income tax hit.1

In contrast, other traditional IRA withdrawals are taxable—wholly or partially, depending on whether you’ve made any non-deductible contributions over the years.

Unlike with garden-variety charitable donations, you can’t claim any itemized deductions for QCDs, and that’s okay. That’s better than okay! Why? The tax-free treatment of QCDs equates to a 100 percent deduction—because you’ll never be taxed on those amounts. And you don’t have to worry about tax-law restrictions that apply to itemized charitable write-offs.

Also, as explained later in this article, you can use the QCD to minimize and even avoid some new, unfavorable federal income tax provisions that OBBBA added.

To be a QCD, an IRA distribution to your charity must meet all the following requirements:2

It cannot occur before you, as the IRA owner or beneficiary, are age 70 1/2.

It must be transferred by your IRA trustee directly to an IRS-approved charity. The funds cannot pass through your hands or any other person’s hands in any fashion (for example, by being deposited in an account other than one belonging to the charity).

It must meet the normal tax-law requirements for a 100 percent deductible charitable donation. If you receive any benefits that would be subtracted from a donation under the normal charitable deduction rules (such as free tickets to an event), the distribution cannot be a QCD. Beware of this rule in particular! ... Log in to view full article.