Here at Oklahoma Financial Center, we're processing increasingly more QCDs. We've found them to be a powerful tool for our clients who are charitably inclined, as it also allows them to reduce their tax exposure while meeting required minimum distributions (RMDs), if applicable.
How Do QCDs Work?
A QCD is a tax-efficient way for individuals aged 70½ or older--that’s right, you don’t have to already be subject to RMDs--to donate directly from their IRA to an eligible 501(c)(3) public charity. The distribution, which is up to $108,000 per taxpayer for 2025, is excluded from Adjusted Gross Income (AGI) but still counts toward the individual’s RMD. Married couples with separate IRAs can each contribute up to $108,000, effectively doubling the potential exclusion!
In short, QCDs allow retirees to support causes they care about while reducing their taxable income, which is usually more beneficial than a charitable deduction. This is particularly beneficial for taxpayers who take the standard deduction, since they can still reap the tax benefits of giving: it effectively functions as a tax reduction without itemizing.
As QCDs help lower overall tax liability, they can potentially prevent IRMAA surcharges on Medicare premiums or taxation of Social Security benefits that might otherwise result. In some cases, QCDs can also preserve deductions and credits that are subject to AGI phaseouts.
The Fine Print
To qualify, the donor must be at least 70½ years old at the time of the distribution (not merely by year-end). QCDs can only come from traditional, rollover or inherited IRAs, and inactive SEP or SIMPLE IRAs. Donations must go to organizations eligible under IRS rules--that means no donor-advised funds, private foundations, or supporting organizations. And finally, the funds must be transferred directly from the IRA custodian (that’s where we come in!) to the charity.
We Love QCDs!
We at Oklahoma Financial Center enjoy helping you reach your charitable goals! Here, Jacob Wellman-Cooper, one of our Client Service Administrators, outlines what our clients can expect after they decide to give via a QCD:
Since joining Oklahoma Financial Center in March 2024, I’ve had the privilege of connecting with many of our clients. If you choose to process a QCD from your account, you’ll likely work with me directly!
QCDs are one of my favorite parts of what I do. They’re rewarding not only from a financial and tax-planning perspective, but also because of the personal connections and community impact these gifts create.
When a client decides to give through a QCD, I start by gathering their list of charities and gift amounts. The donor can choose whether to remain anonymous, but I always reach out to verify the charity’s details—confirming addresses, payee details, and making sure they’re aware a gift is on the way. This helps ensure every donation is received smoothly, especially for smaller organizations that may not get these checks often.
Once details are confirmed, I guide the donor through the paperwork process, keeping things as easy and efficient as possible. After the checks are issued, I follow up to confirm receipt with each charity, and early in the new year, I coordinate with the donor’s CPA to make sure the tax reporting is handled correctly.
What I enjoy most is the enthusiasm from the charities themselves—their appreciation is genuine and contagious. It’s equally inspiring to see how excited our clients are to give back, and I love being part of that ongoing cycle of generosity that strengthens our community.
Bottom Line
For clients who are charitably inclined and especially those who are subject to RMDs, QCDs remain one of the most tax-efficient giving mechanisms available. We would love to work with you to enact this powerful giving strategy! Please let us know if you have any questions or would like to discuss this option further.