The Power of a Qualified Charitable Distribution for Catholics

If you’re 70½ or older, a Qualified Charitable Distribution (QCD) is one of the simplest and most tax‑efficient ways to support your parish or favorite Catholic ministry. A QCD lets you give directly from your IRA to a qualified charity, and the amount is excluded from your taxable income — not deducted later.

Key Facts You Need to Know

• Eligibility: You must be 70½ or older on the date of the transfer.

• Annual limit: Up to $111,000 per person in 2026, indexed for inflation.

• Eligible accounts: Must come from a traditional IRA (not a 401(k) or donor‑advised fund).

• Tax benefit: The gift is excluded from income, which can help reduce Medicare premiums and Social Security taxation.

• RMD friendly: A QCD can satisfy your Required Minimum Distribution for the year.

Why QCDs Matter

Most retirees take the standard deduction, which means traditional charitable deductions may not lower taxes. A QCD avoids that issue entirely: the distribution never becomes taxable income in the first place. And every little bit matters! Consider giving to your parish or school's endowment to make your gift last in perpetuity.

For many Catholics, this makes a QCD the most tax‑efficient way to give. Take the next step: we always recommend you speak with your tax advisor or financial planner about your unique situation.

 

Why this topic? The long-term financial stability of our Catholic organizations was surfaced by interviewees in our 2025 diocesan listening exercise across Southern Minnesota. The Catholic Foundation Board has selected this as our top strategic priority through 2030. Visit our FY27-FY30 strategic plan page to learn more.

References: 

https://www.irs.gov/publications/p590b#en_US_2025_publink100091158

https://www.irs.gov/pub/irs-prior/i1099r--2025.pdf

https://www.irs.gov/newsroom/seniors-can-reduce-their-tax-burden-by-donating-to-charity-through-their-ira