The Discerning Investor by Julie Jason

QCDs Remain Unchanged Amid Other Tax-Related Developments

In 2016, Congress made permanent the QCD or qualified charitable distribution for people at least 70 1/2 years old who wanted to benefit charities. The charity had to be qualified, and there were other requirements to effect the QCD properly, as set out in IRS Publication 590-B.

The QCD allowed charitably inclined IRA owners to direct all or part of their required minimum distribution (RMD) to the charity (up to $100,000) without triggering an income tax on the withdrawal.

From a tax perspective, that’s a big deal. Unlike RMDs, QCDs are nontaxable IRA withdrawals.

Then came 2019 and 2020.

In December 2019, the Setting Every Community Up for Retirement Enhancement (SECURE) Act was signed into law, changing the required starting age for RMDs from 70 1/2 to 72 as of Jan. 1, 2020. (The act did not change the age for QCDs to 72.)

In March 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was enacted. The CARES Act waived RMDs for the year 2020.

How do these two acts affect 2020 QCDs?

Specifically, a reader from Connecticut wants to know: “Before the 2020 RMD requirement was eliminated, my wife and I made some qualified charitable distributions from our IRAs. As we now plan to itemize our 2020 deductions, including charitable contributions, how does the IRS want me to handle the QCD we made?”

Good question, and one that needs to be directed to my reader’s tax preparer. But, let me add that in my research, I found no guidance on this issue from the IRS. (Your tax preparer may have better luck.)

Let’s talk through the logic. There is nothing that I can find that directs any change in how a 2020 QCD is to be handled. That is, if left untouched, the QCD would be treated as any QCD from, say, 2019, for example. If properly set up, the QCD would not be a taxable withdrawal.

The fact that 2020 is a year of RMD waivers should be of no consequence to the QCD.

However, because of the RMD waiver, there is no offsetting tax benefit to be gained. That is, doing a QCD during a year in which an RMD is required eliminates the income tax on the RMD, assuming the two amounts are equal.

For example, if the RMD is $50,000 and the QCD is $50,000, the RMD requirement is met by doing the QCD; there is no income tax due. The RMD would have triggered a tax on $50,000 of income but for the QCD of $50,000.

While the QCD can, according to the IRS, “satisfy” all or part of your RMD, that’s not the governing factor in whether a QCD is valid. The basic requirements for QCDs were established in the Pension Protection Act of 2006 and are located in Section 408 of the Internal Revenue Code ( Additional details on QCDs can be found in IRS Publication 590-B (

You can search organizations to find if they are eligible to receive tax-deductible charitable contributions here:

On another note, if you are interested in learning investment basics, join me for a virtual presentation, “Research Tools,” on Wednesday, Oct. 14, at 10:00 a.m., sponsored by the Greenwich (Connecticut) Library. To register, go to or contact Yang Wang, 203-622-7924,

Julie Jason, JD, LLM, a personal money manager (Jackson, Grant Investment Advisers Inc. of Stamford, Connecticut) and award-winning author, welcomes your questions/comments ( Please visit