Donate Your RMD Tax-Free to Charity in 2016
A donation counts as your required minimum distribution, but doesn’t increase your adjusted gross income.
- (opens in new tab)
- (opens in new tab)
- (opens in new tab)
- Newsletter sign up Newsletter

I’m 72, and I’d like to donate money from my IRA to charity to support my favorite cause and also so I don’t have to pay as much in taxes on my required minimum distribution. Can I make the donation now, and what steps do I need to take?
In the past, Congress generally waited until December every year to extend the law that allows people to make a tax-free donation of up to $100,000 from their IRA, leaving some to scramble to make the contribution before the RMD deadline. But Congress made the law permanent last year, so if you’re 70½ or older, you can transfer your 2016 RMD to charity at any time. The donation counts as your required minimum distribution but doesn’t increase your adjusted gross income, which can be particularly helpful if you don’t itemize and can’t deduct charitable contributions. Also, keeping some or all of your RMD out of your adjusted gross income could help you avoid the Medicare high-income surcharge or help make less of your Social Security benefits taxable. (You can't double-dip tax breaks and deduct the charitable contribution if you make the tax-free transfer to charity.)
The money needs to be transferred directly from the IRA to the charity in order to be tax-free. If you withdraw it from the IRA first and then give it to the charity, you can deduct the gift as a charitable contribution (if you itemize), but the withdrawal will be included in your adjusted gross income.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Because the law is now permanent, IRA administrators are starting to simplify the process. Fidelity, for example, plans to introduce a new form in the next few weeks that makes it easy to transfer the money and make your wishes clear to the charity. You may also have the option of signing up for check-writing privileges from your IRA so that you can write the check directly from your account to the charity. That way, the charity will see who the contribution is from, and you can include specific directions as to which fund within the charity you’d like to support. Otherwise, the IRA administrator will cut a check and send it directly to the charity, but the charity won’t necessarily be given clear information about whose account it is from or what the money is meant to support, says Jane Wilton, general counsel for the New York Community Trust.
If your IRA administrator doesn’t offer check writing and instead transfers the money directly to the charity, Wilton recommends calling the charity in advance and giving them a heads up that it will be getting a check from your IRA. In addition to knowing who the donation is from, the charity can get your contact information to send you an acknowledgement for your tax records, and you can give the charity special instructions about which fund or program you’re supporting. (Keep in mind that you can make the tax-free transfer from the IRA to a charity but not to a donor-advised fund.)
As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.
-
-
Stock Market Today: Stock Market Struggles While Alibaba Shines
Tech and communication services stocks were two of the worst performers today as Treasury yields rose.
By Karee Venema • Published
-
Study Reveals the Most Trusted Banks
A recent study reveals the top 15 most trusted banks, with one bank ranking as the most trusted for the third consecutive year.
By Erin Bendig • Published
-
Getting Out of an RMD Penalty
retirement When your brokerage firm miscalculates your required minimum distributions, you have recourse.
By Kimberly Lankford • Published
-
Borrowers Get More Time to Repay 401(k) Loans
retirement If you leave your job while you have an outstanding 401(k) loan, Uncle Sam now gives you extra time to repay it -- thanks to the new tax law.
By Kimberly Lankford • Published
-
It’s Not Too Late to Boost Retirement Savings for 2018
retirement Some retirement accounts will accept contributions for 2018 up until the April tax deadline.
By Kimberly Lankford • Published
-
How Your HSA Can Reimburse You for Medicare Premiums Paid
Medicare Even if your Medicare premiums are automatically deducted from your Social Security check, you can take tax-free withdrawals from a health savings account to reimburse yourself for them.
By Kimberly Lankford • Last updated
-
How to Correct a Mistake on Your RMDs from IRAs
retirement If you didn't take out the correct required minimum distribution because your brokerage firm made a mistake, the IRS may show some leniency.
By Kimberly Lankford • Published
-
Ways to Spend Your Flexible Spending Account Money by March 15 Deadline
spending Many workers will be hitting the drugstore in the next few days to use up leftover flexible spending account money from 2018 so they don’t lose it.
By Kimberly Lankford • Published
-
Making the Most of a Health Savings Account Once You Turn Age 65
Making Your Money Last You’ll face a stiff penalty and taxes if you tap your health savings account for non-medical expenses before the age of 65. After that, the rules change.
By Kimberly Lankford • Published
-
Reporting Charitable IRA Distributions on Tax Returns Can Be Confusing
IRAs Taxpayers need to be careful when reporting charitable gifts from their IRA on their tax returns, or they may end up overpaying Uncle Sam.
By Kimberly Lankford • Published