There are a lot of different ways you can support your charity of choice. When it comes to supporting a nonprofit financially, a Qualified Charitable Distribution (QCD) is a smart way to go. We’ll look at three reasons why you should consider a QCD for your charitable contributions.  

But, before we dive in, what is a QCD? Put simply, a QCD is when you donate money from your Individual Retirement Account (IRA) to a qualified charity, such as Veterans Outreach Center, without having to pay taxes on that money. This makes it a great option if you want to support your favorite charity and benefit from tax advantages!  

Here’s Why QCDs are Beneficial 

You can start using QCDs as soon as you reach 70.5 years old, which is earlier than the age for Required Minimum Distributions (RMDs) at 73. This gives you a great opportunity to make tax-free donations before those mandatory withdrawals start.  Your QCDs won’t count as taxable income for you, which means you can give generously without needing to worry about complicated tax deductions.  

 Here are three ways a QCD helps by keeping donations out of your taxable income: 

1. Protects Your Social Security Benefits: It won’t push your Social Security into a higher tax bracket. 

2. Saves on Medicare Costs: It can help you avoid higher premiums. 

3. Meets Required Minimum Distributions: If you’re 73 or older, it counts towards the money you need to withdraw from your IRA. 

Know Your Limits 

If you’re making these donations as an individual, you can give up to $111,000 a year via QCDs. If you and your spouse both qualify, that total can go up to $222,000! 

Important Changes to Consider 

Some recent tax changes, known as the “One, Big Beautiful Bill” (OBBB), were passed in July 2025. While they didn’t change how QCDs work, they did add new limitations on cash donations starting in 2026. 

1. New Deduction Rules: If you itemize your taxes, you can only deduct charitable donations exceeding 0.5% of your income. For instance, if your income is $200,000, only donations above $1,000 can be deducted. Since QCDs reduce your taxable income directly, you get the full benefit right from the start. 

2. Caps for High Earners: For those in the highest tax bracket, the value of itemized deductions is capped, reducing the tax benefit you would have received from a cash gift. A QCD allows you to avoid this cap, effectively maximizing your tax savings. 

Additionally, the new law has introduced a temporary Senior Tax Deduction, which offers extra deductions for those aged 65 and older, effective through 2028. 

With these changes, many retirees find it harder to benefit from itemizing deductions. This means that using a QCD to donate is often the best option for seniors wanting to support charities and save on taxes. 

Ready to Learn More? 

If you’re considering donating, now is the perfect time to explore a QCD. Speak with your financial advisor to see what option works best for you. And if you have questions, don’t hesitate to reach out to us! 

For more information, contact Joan Brandenburg, Director of Planned Giving and Strategic Partnerships at Veterans Outreach Center, at 585.295.7821 or Joan.Brandenburg@vocroc.org. 

The information contained in this document is for informational purposes only and does not constitute formal tax, legal, or financial advice. Tax rules are complex and subject to change. You should consult a qualified tax professional regarding your specific circumstances before taking any action.