As surely as a spring snowstorm in Vermont, tax season has come again. Of all the acronyms you may become familiar with this time of year, there are a few of particular note for those who are interested in community giving. As part of CVHHH’s ongoing partnership with Granite Financial Group, we’re sharing some resources to help our donors maximize their charitable gifts in 2026.
A Required Minimum Distribution – or RMD – is the minimum amount that must be withdrawn from your Individual Retirement (IRA) accounts annually once you reach age 73. One way to satisfy part or all of your RMD is to make a tax-free donation to a qualified charitable organization directly from your IRA. These gifts, known as Qualified Charitable Distributions (QCD), are one way to support nonprofit organizations that are meaningful to you while helping reduce your taxable income.
How do QCDs work?
A QCD differs from a standard cash donation from which you can claim a tax deduction because QCDs reduce your Adjusted Gross Income (AGI). Your AGI is used to determine your Medicare premiums, taxes on Social Security benefits, as well as your ability to claim certain tax credits. Lowering your AGI can help you avoid moving into a higher tax bracket and being taxed at a higher rate.
For example:
- A 75-year-old person is filing their 2025 taxes as a single individual. Their AGI is $100,000. They choose to take their RMD as cash and then make a $10,000 cash donation and claim it as an itemized deduction. Their federal taxable income becomes $90,000.
- If the same person uses their RMD as a $10,000 QCD, the RMD is excluded from their taxable income; their AGI becomes $90,000. They can then take their $15,750 standard deduction for filing as a single individual, and their $6,000 deduction for being over age 65, making their taxable income $68,250.
Which organizations are eligible to receive a QCD?
Tax-exempt organizations, like 501(c)(3)s, nonprofit hospitals and schools, and national and local charities.
Is there a limit to what I can give?
Individuals can make QCDs to multiple qualifying charities up to $111,000 annually. If you file taxes jointly, this increases to $222,000.
When should I donate?
According to LPL Financial[1], QCDs are most advantageous when taken earlier in the year. “Due to the ‘first dollars out’ rule, which says that the first dollars distributed from your RMD, timing is everything,” the group states. “If you take withdrawals from your IRA early in the year, you may use up your RMD before you can make your QCDs.”
Want to learn more?
If you’d like to find out if a QCD makes sense for you, contact Granite Financial Group or another trusted financial advisor. For more information about how your gift supports high quality, medically-necessary home health and hospice care for all Central Vermonters, please contact Emily McKenna, Chief Advancement Officer, at emckenna@cvhhh.org.
[1] Qualified Charitable Distributions. Fidelity Charitable. (2026). www.fidelitycharitable.org/guidance/philanthropy/qualified-charitable-distribution.html.
