What’s RMD? RMD is Required Minimum Distribution. Owners of traditional IRAs, 401(k)s and similar plans must withdraw a specified amount annually beginning at age 73. RMDs are taxable.
What’s QCD? QCD is Qualified Charitable Distribution. Generally, QCDs allow those age 70½ or older to make a tax-free donation from an IRA to a qualified charity.
How are QCDs and RMDs related? A QCD counts toward satisfying your RMD for the year but is not included in taxable income. If you’re subject to RMDs, you can use a QCD to partially or fully satisfy your RMD for the year.
IRS rule: to count toward an RMD, a QCD must be made first. You can’t apply a QCD to an RMD retroactively.
Talk to your financial advisor about taking some of the sting out of taxes by supporting Care Net. Learn about other planned giving options.